Antitrust Law Daily Wrap Up, ANTITRUST NEWS: ABA sections comment on CMA’s draft guidance on voluntary redress, (Apr 20, 2015)

By Linda O’Brien, J.D., LL.M.

The Antitrust Law and International Law Sections of the American Bar Association on April 13 have jointly submitted comments to the U.K. Competition and Marketing Authority on its draft guidance on voluntary redress scheme authorized by the Consumer Rights Act of 2015. The comments commended the CMA for its leadership in crafting a comprehensive, transparent, and potentially used program to promote voluntary redress as an alternative to private litigation in the courts.

Program features. The ABA has long encouraged the development of alternative dispute resolution processes that can achieve a resolution more expeditiously and efficiently than litigation with coverage with coverage that would include injured consumers as well as businesses. The proposed scheme aligns well with related approaches used internationally, the Sections noted.

The draft guidance contains several innovative features designed to meet its goal of providing an efficient and low cost means of achieving redress, while safeguarding the interests of those harmed, according to the ABA. The features include: (1) a compensated independent board including a competition attorney, economist, consumer representative, and industry/ market expert with access to the defendant's records, documents, and employees to determine total damages to be awarded and calculate payouts on claims and (2) a detailed redress program including the category of persons eligible for compensation, and the terms and conditions of the scheme, based on the board’s determinations. The Sections also recognize the importance of allowing for flexibility within the proposed scheme and appreciate certain choices allowed within the draft guidance.

Recommendations. While the ABA recognizes the CMA for this initiative, based on the broad experience of their members, the Sections suggested certain refinements that the CMA may wish to consider to its draft guidance. The suggested refinements focus on: (1) refining incentives for defendants to participate in voluntary redress schemes and addressing the interface of these schemes with the collective action litigation flowing from the Consumer Rights Bill of 2015; (2) addressing potential confidentiality interest and due process issues; (3) considering additional avenues for notifying potentially injured victims such as Internet advertising and social media campaigns to extend the reach of the notice; and (4) addressing certain process issues involving transparency, public comment, and conflicts of interests among claimants.

Finally, while the CMA mandates that the chair of the board appoint a board representative for the claimants, the comments recommended that the chair be required to appoint a representative for each group of claimants to avoid potential conflicts of interests where a global fund is concerned.

News: Antitrust