Help for small firms hit by unfair business practices
The Government has announced new proposals to make it easier for consumers and small firms to take action against unfair business practices.
The new measures were announced by the Competition Minister Jo Swinson who said: “Actions like price-fixing or imposing unfair trading terms can really harm businesses, particularly small businesses, and restrict their ability to grow; and that is why we will create a fast-track system in the courts for businesses to restore justice as quickly as possible.”
The Government says the measures are needed because at present, consumers and small enterprises can find it difficult and too costly to take action against unfair practices by larger businesses.
The changes include:
• making the Competition Appeal Tribunal (CAT) the main court for competition actions in the UK, including a fast track regime;
• introducing a new opt-out collective actions regime, with protections, for competition law; and
• promoting Alternative Dispute Resolution (ADR), to make sure that wherever possible any disputes are resolved without resorting to courts.
A Government statement gives the following example of how the new system could be used to help a small business: “If a medium-sized car garage suffered losses because of a supplier abusing its position by withholding spare parts to drive up prices, the car garage could put the case to the CAT. If it appeared that prolonging the situation would bankrupt the garage, the CAT could act quickly and fast-track the case to provide an injunction, resulting in the supplier having to restart their supply.”
The statement continues: “Under the new opt-out collective regime, appropriate representative bodies will be able to take a group or collective action in court, and groups of consumers or businesses will automatically be included in the action. If they don’t want to be part of the claim they will have to opt-out.
“Businesses accused of anti-competitive behaviour will have several safeguards to make sure that the results are fair for them as well, including making sure that if they lose the case they only pay back what was lost by the consumer or other business and don’t face excessive costs.
“The changes will ensure that ADR is promoted and used wherever possible, saving time and money for those involved by avoiding lengthy cases and legal fees. As part of this, businesses that have had claims made against them will be able to propose collective settlements to the CAT, allowing them to nip the issue in the bud quickly and with reduced costs.”
Please contact Deborah Rupping if you would like more information about the issues raised in this article or any legal matter relating to protecting your business.