Consumer Rights Act 2015 comes into force

The Consumer Rights Act 2015 gives extensive new powers to the UK’s specialist competition court, the Competition Appeal Tribunal (CAT).

A new fast track procedure is intended to encourage smaller businesses to bring cases against large companies or groups abusing their market power.

From today, companies will be able to bring quicker, cheaper cases and can ask the specialist tribunal to put a stop to anti-competitive behaviour which is damaging their business, as well as award redress.

As well as ensuring a business does not itself break the law, heightened awareness of competition law may also identify whether a company has been overcharged by suppliers or otherwise lost out due to collusion by others.

Catriona Munro, a partner in the EU competition and regulatory team at Maclay Murray & Spens (MMS) said: “Most companies know that anti-competitive agreements and abuse of dominant market positions are illegal, but it is possible to fall foul of the law through seemingly innocuous agreements made casually with competitors.

“It is, therefore, essential that managers also take a thorough overview of the situation and that suitable due-diligence is carried out across commercial operations.

“Raising awareness of competition law is often regarded as a necessary evil, to keep sales staff on the right side of the legal line and reduce the company’s exposure to fines.

“What is less often appreciated is that awareness of competition law can also identify breaches of the law by suppliers or customers, which may have operated to the company’s detriment. If this is the case, today’s changes to the law may make it easier to seek redress.”

Up until today, private actions for breach of competition law have been the domain of the big players who have been able to take significant financial risk in embarking on an expensive litigation to require cartelists to pay back the overcharge on goods and services supplied.

Under the Consumer Rights Act 2015, cases brought by small or medium sized enterprises (SMEs) will be considered for a fast track procedure, designed to make it cheaper and quicker for SMEs to seek redress.

The CAT may place a cap on costs and can also restrict the amount of evidence and number of expert witnesses that can be presented in a case.

The new act also introduces a mechanism for infringing companies to propose voluntary redress schemes to provide compensation to victims, which may be approved by the Competition and Markets Authority.