By John Oxenham, Michael-James Currie and Charl van der Merwe
South Africa’s law governing follow-on damages for competition law violations remains largely undeveloped and plaintiffs as well as our civil courts are likely to encounter a number of legal and practical challenges in pursuing damages claims against those defendants who have been found to have engaged in prohibited anti-competitive conduct.
On 8 August 2016 and 15 February 2017, the South Gauteng High Court awarded damages to Nationwide Airlines and Comair Airways (the “Plaintiffs”) respectively, following the Competition Tribunal’s decision that South African Airways had abused its dominant position in the market by inducing travel agents not to deal with competitors (the “Airline cases”).
The High Court’s decisions, however, left open a number of questions as to the precise nature of the basis for liability and particularly, whether civil liability may only be imposed once a plaintiff has proved all the elements of a common law delict or whether civil liability is statutorily based.
This paper assesses whether the High Court’s decisions in the Airline cases are in fact the ‘landmark’ decisions many initially thought would be the case and whether a sufficient framework now exists in terms of which civil damages claims may be brought and assessed. Furthermore, this paper explores what the impact may be (in relation to certain competition law infringements) if a plaintiff is required to satisfy all the common law elements of a delict before civil liability may be imposed, and whether an assessment in terms of the traditional common law of delict provides an appropriate balance between enabling victims of anti-competitive conduct to pursue their claims for compensation, whilst simultaneously ensuring that defendants do not face undue hardships in fending-off indeterminate liability. This is particularly relevant in relation to claims instituted by ‘indirect purchasers’ and the policy considerations in respect of claims for pure economic loss.
In light of the per se nature of cartel conduct and the principle of ‘joint and several’ liability, there is also a risk that defendants may be held liable for damages which it did not in fact cause. The paper evaluates whether, and in what circumstances, such a scenario may arise and whether a defendant will be unduly or ‘unjustifiably’ burdened by this proposition.
The paper also briefly discusses additional practical and legal considerations which plaintiffs should be cognisant of when considering whether, and when, to institute a civil damages claim, particularly in relation to prescription arguments and the availability of evidence.
Read the full publication here.