A. Strict Liability for Anticompetitive Harm

Although the European Court of Justice (ECJ) declared that individuals enjoy EC rights directly effective before national courts,Footnote ⁶ especially those under the then articles 85/86 EC,Footnote ⁷ English courts took the view that these provisions conferred on individuals the right to damages arising from antitrust conduct. In the UK, compensation for antitrust harms has traditionally been pleaded through the generic tort of breach of statutory duty,Footnote ⁸ rather than through novel causes of action (whether dubbed “undue restriction of competition”, “abuse of dominance within the common market”Footnote ⁹ or “Euro-Torts”).Footnote ¹⁰ In Garden Cottage Foods Ltd. v. Milk Marketing Board,Footnote ¹¹ Lord Diplock and a majority of the House of Lords acknowledged the applicant's right to an injunction and damages stemming from the defendant's abuse of dominance in violation of article 86 EC (by forcing the applicant to deal with its competitors who charged higher prices). At first, it was only Lord Diplock's intimation that these remedies should be pursued via the tort of breach of statutory duty,Footnote ¹² but this opinion was confirmed by the Court of Appeal two years later.Footnote ¹³

Three features of the tort of breach of statutory duty deserve attention. First, unless the statute expressly bestows on individuals a tort-right to sue other private parties for the injury they occasion by violating such legislation, in principle the breach of a statutory duty does not entail tort liability.Footnote ¹⁴ Whether the silent statute intended to confer a civil remedy is usually a knotty policy question,Footnote ¹⁵ with an unpredictable answer. While Lord Denning M.R. recognised a tort action whenever the defendant interfered with the claimant's business by perpetrating a statutory crime against a third party,Footnote ¹⁶ for Lord Diplock a civil remedy entirely depended on the statutory interpretation,Footnote ¹⁷ which is the accepted opinion.Footnote ¹⁸ Thus, courts must examine the text of the statute, the surrounding circumstances and the precedents. A mere causal link between the defendant's breach and the claimant's harm is no indication of that parliamentary intent. Liability can arise if: the statute intends to safeguard through a civil action the relevant class of persons and for the type of injury corresponding to the claimant; the defendant infringes the statutory duty owed to the claimant; and the latter is thereby harmed.Footnote ¹⁹ Nowadays, however, it is no longer questionable that victims of anticompetitive practices can claim economic losses. In the UK, The Competition Act 1998 confers on any person injured by antitrust acts the right to compensation for damages before the CAT, once the EC Commission or the OFT has found the infringement.Footnote ²⁰ Further, under this statute the claimant need not prove that the defendant owed her a duty for the kind of loss suffered.Footnote ²¹ Similarly, in the EU individuals must compensate for losses ensuing from the violation of the directly applicable articles 81/82 EC. A civil action for damages is deemed vital to enforce the principle of effectiveness that these provisions represent.Footnote ²² Moreover, in Courage v. Crehan Footnote ²³ the ECJ reaffirmed that any person injured by anticompetitive conduct could recover damages even though these treaty articles do not grant such a right. The court acknowledged the standing of the party in the weaker economic position to an anticompetitive agreement within the UK market to sue the other party responsible for harm following the breach of article 81 EC, which arguably also applies to article 82 EC and/or Chapters I/II of the Competition Act 1998. The defence in pari delicto could only succeed against a party bearing significant responsibility in the distortion of competition, considering her bargaining power and the economic-legal background of the contract.Footnote ²⁴

Secondly, the tort of breach of statutory duty rests on the infringement of rules that impose “an absolute obligation to perform or forbear from performing a specified activity” and not a duty “to take reasonable care to avoid injuring another”.Footnote ²⁵ Thus, prominent scholars as BuckleyFootnote ²⁶ and Stanton,Footnote ²⁷ alongside courts,Footnote ²⁸ categorise this tort as strict liability. So, anticompetitive injury is taken as recoverable independently of the defendant's negligence or intention.Footnote ²⁹ Analogously, the ECJ has rooted antitrust tort liability exclusively in the breach of competition laws, damage and causation.Footnote ³⁰ It is argued that since antitrust law imposes unequivocal prohibitions to be respected in absolute terms, irrespectively of the defendant's fault, antitrust tort liability should be considered as strict, whether or not it is alleged through the tort of breach of statutory duty. Nonetheless, this article will controvert such conception and instead postulate that intentional conduct has to be taken as the underlying foundation of the competition torts, in the same vein as the economic torts.

Thirdly, the tort of breach of statutory duty was deemed inadequate to establish whether the claimant had been injured by the defendant's infringement or by the claimant's own fall in productivity, or failure to react to market conditions, amongst other causes.Footnote ³¹ Thus, claimants might find it less complicated to show the causal connection between antitrust conduct and damage if the breach has already been declared by the competition authority, which is how the competition torts will probably be sued. However, as this article will argue, proof of causation is a relentless problem with antitrust tort liability whatever the form of action chosen.

B. Intentional Conduct Underpinning Antitrust Tort Liability

Whether anticompetitive behaviour ought to attract strict liability or intention-based liability in tort is debated. The hard proof of a mental element in the defendant is a reason for preferring strict liability. However, in this author's view, the very gist of competition (i.e., a non-dangerous activity from which some of its participants win while others lose), and the supplementary role that tort law is to perform in the enforcement of antitrust law, are solid reasons to define this species of liability as founded on intentional conduct.

Broadly conceived, strict liability is justified by a notion that tortfeasors must assume the undesirable effects of their activities.Footnote ³² Specifically in the competition setting, the difficulty of showing the defendant's intention to harm a particular rival offers a practical argument for strict liability. Whish notes that even the objective intention to drive competitors out of the business is hard to prove despite using market analysis.Footnote ³³ Yet, as Thompson and O'Flaherty suggest, fault liability might deter anticompetitive conduct more efficiently than strict liability even though fault is inferred from the breach of statute.Footnote ³⁴ Wrongdoers have an incentive to be careful if the costs of preventing harm are lower than the magnitude of damage multiplied by its probability.Footnote ³⁵ This “Learned Hand formula” is implicit in the evaluation of the likelihood of causing, the seriousness and the cost of preventing harm carried out by UK courts.Footnote ³⁶ The point is that fault liability would encourage potential tortfeasors and victims to achieve the optimal standard of precaution as regards non-dangerous activities. Conversely, strict liability appears a good candidate for controlling the level of abnormally hazardous conduct by fully compensating victims regardless of defendants' blameworthiness.Footnote ³⁷ While fault liability might be extended to dangerous activities on the basis that the materialisation of the risk posed by them reveals negligence,Footnote ³⁸ it does not seem equally reasonable to impose strict liability for risks created reciprocally by the participants in non-hazardous activities. Strict liability is a justifiable aid to victims exposed to risks higher in degree and different in kind from those they impose on wrongdoers.Footnote ³⁹ But it is unprincipled where the risk can only be prevented by prohibiting victims from acting altogether.Footnote ⁴⁰

However, liability for merely injuring trade adversaries would render commercial life impossible. First, competition is not a dangerous activity but produces social benefit regardless of inexorably leaving individual losers. Secondly, strict liability is coherent with the law's commitment to vindicating victims' personal security over defendants' liberty to act;Footnote ⁴¹ yet with rivals the problem is precisely one of balancing their clashing freedoms to compete. Thirdly, business competitors naturally harm one another, so claimants are not necessarily passive sufferers. The proposition that, in corrective justice, the defendant should be strictly liable for the injury inflicted on the claimant whenever she would have had to bear the loss had she harmed herselfFootnote ⁴² does not work where the harm flows from the interaction between tortfeasors and victims.Footnote ⁴³ Likewise, rivals do not owe any duty not to carelessly injure each other. Commercial competition would become inoperative if traders were liable for the losses caused simply because, as any reasonable person, they could foresee them as a likely consequence of their acting.Footnote ⁴⁴ Thus, the requirement of an intentional element diminishes the impact of endless liability and litigation.Footnote ⁴⁵

In this author's view, the competition torts have to be considered as involving strict liability for results due to their overriding compensatory role. As Cane points out, outcome-based liability is partly explained in that tortfeasors must bear the losses inflicted on others just as they profit from their activities and partly to facilitate compensation by releasing claimants from showing that the defendant intended to harm them.Footnote ⁴⁶ Nonetheless, it is here submitted that antitrust tort liability rests on the deliberate act of preventing, restricting or distorting competition, through which the defendant intends to injure identifiable opponents alongside targeting indeterminate consumers. This intention is presumed from the infringement which has already been punished by the competition authority. As Jones suggests, to demand evidence of a specific intention in antitrust tort litigation seems excessive. Claimants are heavily burdened with proof that antitrust conduct affected them independently of consumers, which in itself restrains liability. Likewise, in the UK antitrust tort claims are still too meagre to be further complicated with such a requirement.Footnote ⁴⁷

The act of intentionally inflicting harm incorporated into the economic and competition torts can be presumed from the fact that the defendant incurred negative or negligible costs to avoid causing harm.Footnote ⁴⁸ To expend considerably more in injuring the victim than in preventing damage, or even going into debt as to impair the victim, unmasks malice.Footnote ⁴⁹ Yet, the rational attempt to profit at another's expense too discloses interested malice,Footnote ⁵⁰ in which case (as this article proposes) exemplary damages might be awarded.Footnote ⁵¹ In the primary form of abuse of dominant position, the predator's intention to annihilate identifiable competitors or to prevent future rivals is inferred from the fact that the infringer stopped profiting and started selling at a loss.Footnote ⁵² Moreover, the foreseeable effect of predatory pricing is that one or a few known adversaries are expelled from the market to the dominant firm's benefit.Footnote ⁵³ The difficulty is to prove that the defendant sought to eliminate a particular rival.Footnote ⁵⁴ This is partly because unilaterally cutting prices is legitimate competitionFootnote ⁵⁵ and partly because striving for efficiency (and consumer welfare) involves a desire to defeat rival traders.

Instead of searching for (or guessing) a psychological mental state, what must be shown is the objectively negative market impact of the abusive practice. Hence McGee hailed the denial of liability in Mogul Steamship Co. Ltd. v. McGregor, Gow & Co.,Footnote ⁵⁶ since the defendants had caused no social loss and ceased to act before litigation concluded. The defendants had not gained market power in an irrational or expensive way as predatory pricing does.Footnote ⁵⁷ Conversely, in Tuttle v. Buck Footnote ⁵⁸ the defendant, a rich banker, was held liable for setting up a barbershop and using his personal influence to attract the claimant's clients merely to ruin her. Moreover, the defendant had intended to retire once he achieved this aim. Although for Epstein the defendant had legitimately defeated the claimant,Footnote ⁵⁹Tuttle is conventionally treated as the most legendary illustration of the prima facie tort theory (i.e., that there should be liability for intentionally inflicted harm unless that harm is justified) and as the epitome of malicious unfair competition, which uncovers antitrust conduct.Footnote ⁶⁰ This behaviour is quite opposed to diverting competitors' customers by offering better or cheaper products. Likewise, as Perlman demonstrated, the defendant's intention to harm the claimant can be inferred both from the anticompetitive activity and the defendant's attempt to retire from the market after securing a monopoly.Footnote ⁶¹ Along these lines, the ECJ has reasoned that the abuse of dominance is implicit in the act of selling products at a loss, below the average variable costs (“AVC”). Such conduct implies a desire to eject rivals from the market.Footnote ⁶² Similarly, the CAT has held that the longer a super dominant firm sells its products below the reasonably anticipated AVC the easier is to surmise the defendant's intention to injure her competitor.Footnote ⁶³ As distinguished experts argue, predatory pricing is unlawful per se.Footnote ⁶⁴ Thus the defendant's ability to recoup the losses incurred need not be proved directly: it is inferred from the predator's market power.Footnote ⁶⁵

The point to stress here is that antitrust conduct cannot be perpetrated with simple negligence but involves the agent's intention to injure identifiable competitors. However, in the arguably normal case of tort claims brought after the competition authority has established the antitrust conduct and its effect, litigation will be circumscribed to the issues of damage and causation. The intention to harm, which may not be blatant in other infringements, like hard-core cartels, should be discovered through economic evidence rather than relying on mere judicial intuition. It is a matter of attesting the adverse impact of the abusive practice on the market, where the defendant generated more costs than benefits to consumers and competitors.

C. The Interplay with the Economic Torts

The economic torts can be employed as an alternative to the competition torts although subject to proof of an intentional ingredient. In particular, at a time when the competition torts lacked statutory recognition, the economic torts were valued both as a remedy and as an instrument for keeping liability within manageable boundaries, thus rejecting compensation for harm that is a side-effect of legitimate battle.Footnote ⁶⁶ As Weir has said, the economic torts mainly serve to prevent and compensate for damage arising from unfair practices.Footnote ⁶⁷ Nonetheless, the economic torts are just subsidiary remedies for antitrust harm. In effect, once the competition authority punishes the infringer, claimants would rarely frame their actions on the economic torts since the latter not only demand evidence of the component of intention but also of the very antitrust activity. In turn, the competition torts have the advantage of releasing claimants from proving complex mental states. For instance, the claimant who brings an action for lawful means conspiracy must show a predominant intention to injure on the part of the defendants, while the claimant seeking compensation for damages arising from a cartel already declared by the competition authority need not prove such state of mind.

Interestingly, the prospective claims brought under the heading of an economic tort might still be structured around anticompetitive practices. In particular, antitrust conduct can give rise to the tort of unlawful interference with trade. As Brealey and Hoskins illustrate, this is the case “where a company in a dominant position is engaged in a campaign of predatory pricing, with the specific intention of driving a competitor out of the market or of dissuading a potential competitor from entering that market” or “a supplier gave instructions to his distributors not to supply a particular company which wished to undertake parallel imports of the good concerned”.Footnote ⁶⁸ Thus, the person using unlawful means to interfere with the contract between a business and a supplier is guilty of anticompetitive conduct but also perpetrates the unlawful interference tort. However, as Jones rightly points out, under this economic tort the breach of competition law must “directly interfere with a known (or foreseeable) firm's business affairs”.Footnote ⁶⁹ Although the requirement of proof of the intention to injure certainly limits the impact of this remedy on competition law enforcement, antitrust practices nonetheless do conform to the stringent standards of the three-party unlawful interference tort (and especially to the strict notion of wrongfulness) delineated in OBG.Footnote ⁷⁰ In effect, such anticompetitive activities are independently actionable, as statutory competition torts, by the direct victim (unless she is unharmed) against the infringer; they affect the third party's liberty to deal with the claimant; and they are committed with the intention to harm the claimant, by expelling her from the market or preventing her from joining it. Further, antitrust infringement too could serve as ground of the unlawful means conspiracy tort in which wrongfulness is conceived in wide terms.Footnote ⁷¹ In turn, although the Lumley-tort has traditionally been limited to inducing breach of contract, there is judicial support for extending liability to the procurement of the breach of statutory duty provided that the breach is actionable (as a tort) by the claimant.Footnote ⁷² This might include inducing the infringement of competition laws. In fact, the High Court has granted injunctive relief to prevent the abuse by the defendant of her right to terminate a contract aimed at inducing the breach of EC competition law by requiring the claimant to conclude an anticompetitive agreement.Footnote ⁷³ But even if the inducer of a breach of statutory duty was not liable under Lumley he would nonetheless be liable as a joint-tortfeasor.Footnote ⁷⁴ And if the main wrong is the competition tort, the inducer is genuinely a joint-tortfeasor, as opposed to the inducer of another's breach of contract.

That said, it is noteworthy that the strongest resemblance is between the competition torts and the tort of passing-off. First, passing-off equally triggers strict liability for results. Thus, the defendant is liable inasmuch as she has created the likelihood of confusion amongst the claimants' customers. Whether she intended this effect, was reckless or careless is irrelevant; and it is no defence the fact that she had acted in good faith without intending to deceive her competitors' consumers.Footnote ⁷⁵ A second (and for present purposes more important) similarity with the competition torts is that passing-off normally involves the defendant's intention to injure her rivals, by drawing away their customers to the defendant's benefit. Although it is technically possible to supply inadvertently the wrong product having been asked for the claimant's, it does not seem likely to pass one's goods as though they were one's competitors (as classically defined)Footnote ⁷⁶ acting with mere negligence. Indeed, it is a basic principle of marketing that firms should examine their competitors' products carefully before launching their own. The significant point here is that the defendant's intention to harm the claimant is presumed from the very act of purporting that what the defendant sells is his adversary's product, in the same way as that mental element is deduced from antitrust conduct. Thirdly, the fact that the competition torts and passing-off entail strict liability for results unlike the remaining economic torts manifests an uneven protection of business interests within tort law. Intangible property in goodwill is safeguarded through passing-off regardless of any intentional ingredient; interference with contractual rights is tortious provided that the claimant shows that the defendant intended to procure the breach of the claimant's contract; and liability for unlawful interference with another's trade interests is subject to proof of the defendant's intention to injure the claimant. Yet, the fact that neither passing-off nor the competition torts require evidence of this intention does not signify that such intention is absent. It means that proving intention is unnecessary on the pragmatic grounds underpinning outcome-based strict liability, which Cane has authoritatively promoted in support of his conceptualisation of passing-off,Footnote ⁷⁷ and which, as argued in this article, too render strict liability for results a sensible explanation of the competition torts. In both categories of wrongs the defendant's intention to harm the claimant is likely to be assumed given that proof of it is often complicated and given that these torts involve the infliction of harm upon competitors in an indirect, roundabout fashion – in passing-off by deceiving rivals' customers,Footnote ⁷⁸ and in the competition torts, by undermining consumers.

All in all, although the economic torts differ from the competition torts in origin and rationales, both categories can be focused on business practices and compensable damage.Footnote ⁷⁹ More significantly, courts are prone to interpret the competition torts with the same prudence with which they handle the economic torts.Footnote ⁸⁰ As Cane explains, the competition torts form a legislative redress of financial harm for antitrust conduct, whereas the economic torts reflect judicial hesitancy about curtailing the liberty to compete: liability being constrained through intention and generally wrongful means.Footnote ⁸¹ However, it is worth reinforcing the fact that economic-competition tort liability has a marginal role to play in the control of business rivalry. This is because the infliction of harm is an intrinsic hallmark of competition. Thus, just like antitrust law forbids and punishes only certain types of anticompetitive conduct, tort law serves exclusively to remedy illegitimate commercial harm, as demarcated from the losses produced by effective competition.

D. Common Intention

The harm flowing from commercial battle is recoverable exclusively through the economic and competition torts. Beyond these specific civil wrongs the maxim damnum sine iniuria governs.Footnote ⁸² Several implications ensue. First, in this terrain compensation for carelessly occasioned pure economic loss is discarded.Footnote ⁸³ There is no duty of care incumbent upon rivals, who can only expect their opponents will refrain from intentionally and wrongfully invading their businesses.Footnote ⁸⁴ Undeniably, the requirement of intention responds to the judicial fear for the risk of endless liability and uncontrollable litigation which prompts a policy against negligence. Precisely, a cogent reason for excluding negligence liability in competition is that financial loss is a foreseeable and incidental consequence of the licit exploitation of self-interest.Footnote ⁸⁵

Secondly, entrepreneurs are at liberty to drive their contenders out of the market, even intentionally, except when they act unlawfully. Whether business rivals are endowed with a “liberty-privilege” to compete – but not with a “claim-right” – Footnote ⁸⁶ or a “liberty-right” to trade, commercial freedom is qualified by discrete obligations not to compete wrongfully. These obligations are ingrained in the particular economic (and competition) torts rather than in a general canon of liability for intentionally caused damage,Footnote ⁸⁷ such as the aforesaid prima facie tort theory.Footnote ⁸⁸ The intention to harm a competitor, or to procure the breach of contract, is necessary though insufficient to restrain liability. Wrongful means are an essential precondition partly because traders seldom act solely or primarily to hurt competitors (i.e., maliciously) but they often aim at expelling rivals from the market with a view to profit, that is to say, intending to injure them as a means to another end.Footnote ⁸⁹ In fact, even the pioneers of the prima facie tort theory praised the unlawful means imposed in Allen v. Flood Footnote ⁹⁰ as a pragmatic way of adjusting the balance between the litigants' conflicting interests, thereby enforcing liability in line with competitive freedom.Footnote ⁹¹ Conversely, motives simply matter to justify wrongful conduct or to rebut justifications.Footnote ⁹² Thus, deliberately caused harm is defensible in policy and social advantage. It is worth paying the costs in order to obtain the benefits generated by competition.Footnote ⁹³ Intentionally caused injury is treated as endemic to trade competition, hence justified in the advancement of one's own economic expectations; unless it is found to have been inspired by “disinterested” (pure) malice or as a means to self-enrichment through unfair or unlawful methods.Footnote ⁹⁴ Fair competition involves a struggle for superiority to increase customers and trade, leaving winners and losers:Footnote ⁹⁵ “the philosophy of the market place presumes that it is lawful to gain profit by causing others economic loss”.Footnote ⁹⁶ Antitrust law reflects this orientation fundamentally by defending consumers against anticompetitive practices.Footnote ⁹⁷ That some rivals must abandon the business or diminish their market-share is commended as a sign of a healthy economy, rewarding the most efficient or innovative enterprises, if consumers can acquire goods of higher quality at lower prices.Footnote ⁹⁸ For this reason Bork criticised American decisions which, by shielding minor businesses from competitors, prejudiced consumers.Footnote ⁹⁹ Consumer welfare is also protected from “exploitative abuses”, whereby a dominant undertaking imposes excessive pricing and reaps monopoly profits to maintain or increase its market-position instead of naturally responding to the economic conditions. Only secondarily are businesses safeguarded against “exclusionary abuses”, such as refusals to supply goods/services, since successful competitors secure monopolistic positions which accrue to consumers' welfare.Footnote ¹⁰⁰ Therefore, the breaking point is at abusive and wrongful conduct, like predatory pricing targeted at eliminating competitors.

Thirdly, tort law does not mimic ethics completely: neither bad motives render lawful an otherwise wrongful conduct, nor do good motives justify tortious acts.Footnote ¹⁰¹ However, the economic and competition torts partly mirror the moral division between intended consequences and side-effect characteristic of the Doctrine of Double Effect (“DDE”): “Nothing hinders one act from having two effects, only one of which is intended while the other is beside the intention … moral acts take their species according to what is intended, and not according to what is beside the intention, since this is accidental”.Footnote ¹⁰² The DDE imputes moral culpability for the results intended as ends or as means to other goals, including self-enrichment, because they are the agent's choice and give motives for acting. Merely foreseen, unintended, even though inevitable outcomes neither provide such reasons nor contribute to achieve one's purpose: they are side-effects.Footnote ¹⁰³ Intended consequences are directly and deliberately sought by the agent, who utilises the victim to attain a certain aim; hence, those effects are causally closer to the defendant's conduct.Footnote ¹⁰⁴ Thus, to foresee that adversaries will be injured as an inexorable by-product of competition is ethically tolerable; to strive for their ruin is not.Footnote ¹⁰⁵ Similarly, competitors normally foresee their rivals being harmed as a collateral effect of legitimate struggle. Yet, to inflict damage as an end or as a means to another end is socially inefficient and, as confirmed in OBG, tortious. The intention in the Lumley–tort and in the three-party unlawful-interference tort is identified with the result sought as an end or as a means to another end: the breach of another's contract or the claimant's harm, respectively. It therefore suffices that the claimant is undermined as a result of the defendant advancing his own economic interest:Footnote ¹⁰⁶ “The injury which [the defendant] inflicted on [the claimant] in order to achieve the end of keeping up his sales was simply the other side of the same coin … the means of attaining [the] desired end and not merely a foreseeable consequence of having done so”.Footnote ¹⁰⁷ Moreover, the harm recklessly caused also meets the intentional element of the unlawful-interference tort,Footnote ¹⁰⁸ just like in the tort of misfeasance in public office.Footnote ¹⁰⁹ The line is blurred between recklessly caused harm and injury done as a means to profit at the claimant's cost. Inexplicably, however, recklessly inflicted damage has been ruled out of the Lumley-tort.Footnote ¹¹⁰ Even so, merely foreseen harm or breach of contract is not enough in either tort. Thus, the intentionally breaking of a contract anticipating that the contractor would breach its agreement with the claimants is not tortious without the intention to harm coupled with unlawful means.Footnote ¹¹¹

Fourthly, Carty has argued for defining the intention of the unlawful-interference tort as the harm “aimed at the claimant”. Her concern is based on the fact that in OBG Lord Hoffmann rejected an “artificially narrow meaning of intention” reduced to “targeting”. For Lord Hoffmann, the mental element of this tort consists of the defendant's intention to harm the claimant as an end or as means to another end.Footnote ¹¹² Yet, in Carty's view, this notion would make even more diffuse the line between the damage intended as a means and the harm which is a merely foreseen, incidental effect of the wrongful conduct. Courts might thus end up imposing liability for unintended injury suffered as the inevitable consequence of unlawful, deliberate and positive acts, which lack the intention to harm.Footnote ¹¹³ The expansive liability Carty fears was proposed well before OBG, in Beaudesert Shire v. Smith.Footnote ¹¹⁴ However, commentators rapidly condemned this anomalous decision, which had imposed strict liability without a statute conferring a civil action on victims.Footnote ¹¹⁵ Eventually, the Beaudesert Shire judgment was overruled and liability subjected to the defendant's unlawful acts directed at the claimant or at her legitimate activity.Footnote ¹¹⁶ The intention to harm and wrongful means prevent the undue extension of the tort of breach of statutory duty.Footnote ¹¹⁷ Analogously to Carty's formulation, Deakin and Randall have also redefined the mental state of the unlawful-interference tort as “targeting the claimant's economic interests by directly interfering with them”. Thus conceived, they contend, the intentional ingredient can be proved objectively, through market assessment, and hence more easily than if the mental element is associated with the consequences pursued as ends or as means to further goals.Footnote ¹¹⁸

In this author's opinion, however, “aiming/directing/targeting” at the claimant in her trade interests and “harm being intended as an end or as a means to another end” are synonymous or alternative linguistic forms of describing the same theme. This is conspicuously patent in the judgments delivered by the Court of Appeal and the House of Lords in OBG. So, although Lord Hoffmann disliked the term “targeting”,Footnote ¹¹⁹ he understood that “intended” squares with “aiming at”.Footnote ¹²⁰ Lord Hoffmann stretched the mental element of the Lumley-tort and the intention of the unlawful-interference tort to the breach of contract and the claimant's damage caused as a means to another end, respectively. He nonetheless left out the breach of contract or the claimant's harm which is a merely foreseen consequence of the defendant's act.Footnote ¹²¹ His position is thus reminiscent of a jurisprudential school that equates the harm done instrumentally with the injury inflicted intrinsically.Footnote ¹²² Yet, the real difficulty lies in disentangling the nuance between deliberately caused harm and the damage that is an unintended, foreseeable and inescapable side-effect of legitimate competition. This boundary is obscure, to a large extent, because rivals cannot succeed without injuring their competitors.Footnote ¹²³

Moreover, a shared concept of intention is no guarantee of agreement on whether the concrete defendant acted with the requisite mental element. Consider Douglas v. Hello. Here Michael Douglas and Catherine Zeta-Jones granted OK! magazine the exclusive right to publish pictures of their wedding, prohibiting all other photography. Hello! magazine published pictures in the UK knowing they had been taken clandestinely by an unauthorised photographer. OK! sued Hello!, among others, for unlawful interference with its business. The House of Lords reasoned that Hello! had not interfered by independently wrongful means with the Douglases' liberty to deal with OK! and to perform the obligations under their contract. Hello! owed a duty of confidence towards the Douglases, not to OK! Likewise, the paparazzo, not Hello!, had invaded the Douglases' equitable right to confidentiality. However, whereas the Court of Appeal dismissed this claim because Hello! did not intend to injure (or “aimed at”) OK!,Footnote ¹²⁴ Lord Hoffmann estimated that Hello! had acted with such intention as a means of protecting its publication in the UK market.Footnote ¹²⁵ The fact that these judges defined intention in the same mode did not prevent them from advancing divergent opinions on whether that intention lacked or existed in the instant case. Similarly, while Carty argues that Hello! did not target at OK! but sought to profit from the curiosity of the public,Footnote ¹²⁶ Deakin and Randall endorse Lord Hoffmann's finding that Hello! aimed at OK! because the defendant's gain corresponded to the claimant's loss.Footnote ¹²⁷

Nor does the alignment of recklessness with intention in the unlawful-interference tort solve the ends-means conundrum either. Indeed, the overt acts are generally identical whether their consequences are intended or unintended.Footnote ¹²⁸ Proof of intention can be remarkably byzantine: “the thought of man is not triable, for the devil himself knoweth not the thought of man”.Footnote ¹²⁹ Moreover, OBG severely abridged the principle that “people are presumed to intend the reasonable consequences of their acts”.Footnote ¹³⁰ The intention to harm the claimant and that of procuring the breach of contract can no longer be inferred from the fact that the defendant anticipated either result as a likely or natural effect of his conduct.Footnote ¹³¹ Conversely, in some crimes as murder the prohibited result has been deemed to be intended if the defendant foresaw it as a probable or natural aftermath of the wrongful actFootnote ¹³² or as a consequence almost certain to occur.Footnote ¹³³

Which is then the actual importance of intention in economic-competition tort liability? Howarth has argued for abandoning the intentional torts altogether. The touchstone of liability, he notes, is wrongfulness, whether the tortfeasor acts negligently or intentionally. On the one hand, there are no compelling moral or economic reasons to deny compensation for carelessly inflicted financial losses. On the other hand, courts can limit liability through a prudent assessment of the costs and benefits of competition.Footnote ¹³⁴ Subsequently, Howarth has proposed to confine the Lumley-tort to specific fact-situations involving contracts for personal services (as Ms Wagner's herself) and to enhance the scope of justifications by applying the principle of “fair, just and reasonable”, which is widely accepted in negligence.Footnote ¹³⁵ Likewise, Weir said that courts could recognise duties of care between competitors and the tort of negligence might displace intentional torts such as malicious falsehood.Footnote ¹³⁶

However, not only has OBG ratified the centrality of intention to make traders liable in tort but it defined intention in terms altogether analogous to morally objectionable conduct. In the law's eyes this act is certainly more obnoxious than simple negligence. First, as an irrational form of competition, deliberately inflicted harm is worth compensating. Secondly, the difficulty to prove intention does help to constrain liability consistently with competitive freedom. Thus, the economic and competition torts remain a valuable part of the spectrum of tort liability. Surely, the requirement of intention can be challenged from other angles. For example, if the unlawful-interference tort is justified in that the claimant suffers a loss which is not too remote a consequence of the defendant's act (although the wrong is done to a third party) a fortiori a negligent interference should give rise to liability.Footnote ¹³⁷ Yet, the argument advanced here is that carelessly beating rivals is an inevitable side-effect of competition, which is socially justified in the benefits that this activity conveys to consumers. In contrast, deliberately targeting adversaries, whether as the ultimate or immediate purpose of the agent's act, does disclose unfair or antitrust practices.

A. Subsidiary Contribution

The fact that the competition torts involve intentional wrongs immediately discards negligence and strict liability as possible ways of dealing with the harm following anticompetitive conduct. The width of tort liability is therefore very tight. In addition, as will now be argued, the influence of tort on competition law enforcement is and should remain modest. Tort law only secondarily promotes compliance with antitrust legislation. In effect, whereas competition policy concentrates on deterring and punishing breaches, tort law is limited by intention and used basically for compensatory purposes. The implementation of antitrust law is entrusted to the competition authorities, their task being to prosecute, prevent and punish anticompetitive practices through penalties, imprisonment and directors' disqualification.Footnote ¹³⁸ Tort law simply assists those bodies by dissuading potential infringements via injunctions and by compensating identifiable traders for their losses. But its influence can be significant. For instance, the “Georgetown Private Antitrust Litigation Project”, which reviewed over 2,000 tort actions filed in US district-courts between 1973 and 1983, concluded that the threat to initiate tort proceedings and to seek injunctions or compensation served to deter anticompetitive practices.Footnote ¹³⁹

It is submitted that tort law is not an adequate vehicle for identifying and judging anticompetitive conduct. Proving the latter is highly complex, even for the competition authorities. Whether an enterprise behaved independently of its competitors, excluded them from the business and exploited consumers, demands an evaluation of the share of the dominant firm as well as of its rivals in the relevant market, the entry barriers or costs and the impact of the abuse on that market. Whether the dominant company committed predatory pricing, or efficiently reduced prices to attract consumers, is often contentious.Footnote ¹⁴⁰ The inquiry is further complicated with anticompetitive agreements, particularly those concerning persons situated at the same level in the production or supply chain, aimed at fixing prices, restricting outputs or allocating markets. Cartels entail the most pernicious effects for consumers,Footnote ¹⁴¹ so the ECJ regards them as intrinsically unlawful and almost irrefutably presumes that they encumber competition.Footnote ¹⁴² Likewise, under section 1 of the Sherman Act 1890 cartels are per se illegal, and case law considers them as unreasonable and unlawful regardless of the specific damage they bring about.Footnote ¹⁴³ This somehow reflects the principle that intended outcomes are more likely to occur than merely foreseen ones.Footnote ¹⁴⁴ There is no need for claimants to prove that the agreement distorted competition: this consequence is inferred from the very purpose of the agreement. Nonetheless, where the objective of the arrangement is unclear, a market becomes crucial to demonstrate that the agreement did hamper competition.Footnote ¹⁴⁵ In virtue of the “rule of reason”, courts have to balance the positive and negative economic consequences of the covenant againstFootnote ¹⁴⁶ and they must also evaluate each party's market power along with the structure of the market.Footnote ¹⁴⁷ To avoid this troublesome proof of antitrust effects through market assessment, Odudu suggests that the object of the agreement is presumed from the parties' subjective intention, which in turn is inferred from external circumstances.Footnote ¹⁴⁸ This procedure has actually enabled US courts to predict the anticompetitive impact of cartels.Footnote ¹⁴⁹

Directly connected with the preceding issue is the fact that tort disputes normally follow the assertion of anticompetitive conduct by the competition authorities.Footnote ¹⁵⁰ Just as the verdicts in US federal antitrust investigations are prima facie evidence in tort proceedings,Footnote ¹⁵¹ UK claimants can also rely on the binding force of the declaration of infringement by the OFT or the CAT.Footnote ¹⁵² Waiting to sue until after the breach is established allows tort claimants to concentrate on showing damage and causation, and this can drastically diminish the cost and uncertainty of litigation.Footnote ¹⁵³ Claimants can thus make use of the evidence gathered by the competition authorities, who possess wide inspection and correctional faculties, frequently exercised by “dawn raids”. In addition, the competition authorities have the ability to appraise the economic impact of antitrust conduct through market evaluation. Nothing of this is easily attainable in adversarial tort proceedings. However, political and budgetary concerns direct public prosecutions at the most serious offences, and thereby reduce the volume and intensity of private enforcement.Footnote ¹⁵⁴ Of course, litigants can sue for damages stemming from trivial infringements with minimal public impact.Footnote ¹⁵⁵ Yet, stand-alone claimants not only must discharge the always hard burden of proving causation and harm but too have to show antitrust conduct afresh in the first place, often through sophisticated market assessments, with little prospect of succeeding. For instance, an allegation of predatory pricing was dismissed because the claimant failed to prove that the defendant had intended to expel her from business and the claimant could not mitigate its own losses by leaving the market or seeking injunctive relief.Footnote ¹⁵⁶ Problems of this kind can be prevented if tort proceedings are stayed until the ongoing antitrust investigation finishes. So, stand-alone lawsuits are useful merely as defences or counterclaims against actions for breach of anticompetitive agreements.Footnote ¹⁵⁷ Thus, it seems improbable that tort liability develops beyond the infringements prosecuted by the competition authorities.

In fact, the paucity of antitrust tort actions is also due to the absence of adequate incentives. While in the aggressive American litigation culture tort claimants lead the enforcement of competition law and are called “private attorney-general”,Footnote ¹⁵⁸ antitrust tort litigation remains sparse in Europe, revealing a state-dependent mentality on the part of competitors.Footnote ¹⁵⁹ In the last four decades until 2008 there were no more than fifteen final judgments entered in the UK, the claimant succeeding on only one occasion.Footnote ¹⁶⁰ Cases are often settled out-of-court on confidential terms, probably because private parties are averse to initiating litigation with uncertain prospects.Footnote ¹⁶¹ Claimants cannot recover “treble damages” (i.e., the triple in damages plus litigation costs and reasonable lawyers' fees),Footnote ¹⁶² whose punitive component is two-thirds of the award.Footnote ¹⁶³ Likewise, the loser-pays rule,Footnote ¹⁶⁴ however efficacious for impeding the abuse of tort actions to which the claimant-never-pay-costs rule drives,Footnote ¹⁶⁵ can inhibit from suing at all.Footnote ¹⁶⁶ Similarly, the prohibition on “contingency fees agreements” may be justified to prevent bad-faith litigious behaviour and lawyers from giving partisan advice;Footnote ¹⁶⁷ but it dissuades prospective claimants even if their lawyers are offered “conditional fees agreements”.Footnote ¹⁶⁸

B. Limiting Tort Liability through Harm and Causation

As stated above, the intentional constituent of the competition torts has to be presumed from the fact that the infringement injured a particular victim. In the normal case of tort actions being brought after antitrust conduct is found, litigation will revolve around causation and damage. However, the need for proving both conditions fulfils other material functions. First, it retains liability within strict bounds and thereby lessens the risk of tort claims being abused by irresponsible litigants. Secondly, it reduces legal standing to those able to show that they were personally impaired by the anticompetitive practice at stake. A narrow range of claimants can make private enforcement more efficient. Further, in the absence of class actions, the limited standing rules make tort law not the best form of redressing consumers as a whole. Compensation for antitrust harm is thus likely to be claimed between competitors alone. Lastly, the prospect of succeeding largely depends on proof of causation and damage, which is difficult though not necessarily more complex than showing pure economic loss in other contexts. These aspects are briefly commented.

First, although the abuse of tort claims does not seem to be a real problem in the UK, at least currently, it is a potential danger. There is persuasive evidence in the US about the difficulty in identifying antitrust behaviour and about the malleability of competition laws. More often than not, unmeritorious tort lawsuits are brought against minor offences, with the intent to secure monopolistic positions at the expense of legitimate competitors. Tort actions are repeatedly employed as a business strategy to intimidate and force risk-averse rivals to conclude confidential settlements in exchange for claimants not modifying their own antitrust methods.Footnote ¹⁶⁹ The results of these practices include: lengthy, costly and convoluted trials, particularly for measuring, tracing and apportioning damages; multiple payments diluted among numerous claimants; and inconsistent or erroneous decisions.

Secondly, through procedural and substantive techniques locus standi can be limited to those who are in the position of proving that their losses directly flowed from the antitrust conduct. In America, claimants must show that they belonged to the class of persons or the economic sector that the legislator intended to protect.Footnote ¹⁷⁰ Standing is hence reserved for those straightforwardly experiencing financial losses, namely: direct purchasersFootnote ¹⁷¹ and competitors.Footnote ¹⁷² Direct purchasers can prove antitrust injury because they are permanently and closely related to wrongdoers, as opposed to indirect purchasers.Footnote ¹⁷³ As Crane demonstrates, identifying and compensating indirect purchasers (in particular downstream consumers) is usually unfeasible. In turn, competitors can often recover their economic losses because these are not too remote a consequence of the infringement.Footnote ¹⁷⁴ And because indirect purchasers lack standing antitrust infringers cannot allege the “passing-on defence” against direct purchasers: defendants cannot plead a reduction in damages proportional to the overcharges that claimants paid to them and then transferred to indirect purchasers.Footnote ¹⁷⁵ Likewise, it is argued that a circumscribed standing can help to prevent antitrust conduct at optimal level. Direct purchasers have the incentive to decrease (rather than relocate) the higher costs incurred, so indirect purchasers would end up paying lower prices.Footnote ¹⁷⁶

However, the principle of direct effect upheld in Courage and Manfredi favours wider standing and the passing-on defence which discourages claimants from enriching themselves by transferring losses to indirect purchasers.Footnote ¹⁷⁷ Nonetheless, the passing-on defence is difficult to implement in overall terms as the calculation of the losses passed by direct purchasers on indirect purchasers is often extremely arduous, except for very specific cases which have little or nothing to do with antitrust actions, for instance, where the defendant sued by the Revenue and Customs Commissioners pleads that the sums claimed are decreased in proportion to the overpaid taxes that the claimant then transferred to the defendant's customers.Footnote ¹⁷⁸ Consequently, it is submitted that indirect victims suffer damage too unimportant and harsh to prove to be worth suing over, at least individually. Courts may prefer avoiding highly sophisticated litigation, the costs of which usually exceed the damages that indirect purchasers would plausibly receive.Footnote ¹⁷⁹ Furthermore, a broader standing and the passing-on defence can demoralise direct purchasers from suing at all, infringements ending up under-deterred.Footnote ¹⁸⁰ Coincidently, the CAT limits standing to direct purchasers.Footnote ¹⁸¹ Therefore, it seems that the passing-on defence would be workable if indirect purchasers could bring class actions or, as Petrucci argues, if they were allowed to recover overcharges in the same proceedings commenced (and using the evidence gathered) by direct purchasers.Footnote ¹⁸²

Thirdly, proof of causation and damage is amongst the hardest technical and policy issues. Tort disputes entangle a complex evaluation of positive versus negative externalities of antitrust conduct and the hypothetical inquiry whether the claimant would have made a profit had she not been wronged. This is not mere speculation. It has to be based on facts.Footnote ¹⁸³ Still, the cumbersome proof of causation and actionable damage is not peculiar to the competition torts. To a great extent pure economic loss (i.e., the sort of injury competitors inflict to one another) is unrecoverable because it derives from the harm suffered by a person other than the claimant out of interconnected relations that generate chain reactions spreading widely.Footnote ¹⁸⁴ This is why standing is limited to direct victims.Footnote ¹⁸⁵ Similarly, antitrust tort claimants must show that they were directly affected by the infringement. Moreover, as American case law elucidates, the causal link between breach and harm must be established with a high degree of precision. In contrast, the quantification of damages consists of a reasonable estimation as compared against the profit that the claimant would otherwise have gained. Defendants should not be given the opportunity to capitalise on their wrongs on the pretext that claimants failed to show their losses with accuracy.Footnote ¹⁸⁶ Indeed, the CAT recently dismissed the first follow-on action for anticompetitive damage because the claimant could not demonstrate that its alleged loss of chance was caused by the defendant's abuse of dominant position (previously established by the competition authority) under the “but for” test.Footnote ¹⁸⁷ This inaugural judgment confirms that the greatest adversity that claimants will need to overcome is to prove that their economic harm resulted from the antitrust infringement. Yet, this decision also corroborates two significant facts. First, the intention to exclude a competitor from the relevant market must be shown as a cardinal element of the antitrust conduct. Secondly, the intention to injure a particular rival need not be proved again in the ensuing tort trial because it is implicit in the anticompetitive practice irrefutably found by the competition authority. That is to say, the intention to harm the claimant, which is inherent to the competition torts, can plainly be equated to and inferred from the mental ingredient of anticompetitive infringement.Footnote ¹⁸⁸

C. Beyond Compensation

Tort law fulfils corrective justice as between victim and wrongdoer via compensation. Thus, victims are left not better off but as if they had not been injured.Footnote ¹⁸⁹ However, it is this writer's belief that economic-competition tort liability ought also to perform preventive and punitive roles via exemplary damages. In effect, through the economic torts (and not less through the competition torts) the defendant unambiguously aims to profit illicitly at her victims' expense.Footnote ¹⁹⁰ Moreover, for this author such mental element neatly matches “the intention to harm the claimant as a means to another end” so firmly embedded in the leading case law.Footnote ¹⁹¹ Here only a concise explanation can be offered.

Legal scholarship asks both what the law does and what it should do.Footnote ¹⁹² Tort law is conventionally portrayed as a mechanism of personal redress that establishes standards of right and wrongful conduct.Footnote ¹⁹³ It governs the relationship tortfeasor-victim by imposing liability for harm.Footnote ¹⁹⁴ It purports to achieve corrective justice, whether this means a formal notion,Footnote ¹⁹⁵ a social practice that attributes the duty to compensate damage flowing from the unjustifiable invasion of rights or legitimate interests,Footnote ¹⁹⁶ or the restoration of distributive justice by shifting wrongful losses from victims to defendants.Footnote ¹⁹⁷ The economic torts themselves have recently been conceptualised as wrongful interferences with another's primary right. On this analysis, a tort action vindicates such a right and provides compensation based on corrective justice.Footnote ¹⁹⁸

It is persuasively claimed that tort law does or should attain distributional aims, like increasing safety or maximising welfare, whereas reparation of individual injury might better be covered through insurance.Footnote ¹⁹⁹ Nonetheless, the identification of private law with corrective justice and the monopolisation of deterrence and retribution by public law are robustly defended.Footnote ²⁰⁰ Punitive damages are polemical across tort law and the introduction of this remedy in antitrust tort proceedings is firmly resisted in the EU.Footnote ²⁰¹ Moreover, punitive damages can undermine public prosecution and private competition enforcement. Punitive damages too might instigate irresponsible litigants or discourage infringers from denouncing infringements.Footnote ²⁰² Victims of antitrust conduct could also be dissuaded from avoiding or mitigating harm given the prospect of recovering treble damages.Footnote ²⁰³

Not only punitive damages can generate inefficiencies but the simultaneous realisation of so often contradictory targets as compensation, deterrence and retribution can be impracticable.Footnote ²⁰⁴ Punitive damages are an imperfect means of attaining these goals. They serve to prevent antitrust conduct where the awards are commensurate with the litigants' wealth or with the magnitude of the harm.Footnote ²⁰⁵ But if this remedy is to be really retributive, as the US Supreme Court has proclaimed,Footnote ²⁰⁶ the awards should be grounded exclusively in the reprehensibility of the infringement.Footnote ²⁰⁷ In particular, the continuous debate about the real impact of punitive damages on the prevention and punishment of antitrust conduct illustrates the trouble of using tort remedies to achieve public goals as those which infuse competition law. Ultimately, it is for the regulator to determine the level of optimal punishment, not for courts in tort proceedings.Footnote ²⁰⁸ The basic premise is that the lower the chance of detecting and punishing misbehaviour the higher the penalty must be, if the offence is to be prevented and sanctioned effectively.Footnote ²⁰⁹ In principle, optimal deterrence can be attained if the wrongdoer internalises ex ante the social costs of the infringement less the likelihood of being punished.Footnote ²¹⁰ But the problem is with determining an adequate amount of punitive damages to deter antitrust practices without repressing efficient activities.Footnote ²¹¹ For the American authors Landes and Posner, treble damages increase private enforcement and the probability of antitrust conduct being detected above the optimal level.Footnote ²¹² In turn, according to Polinsky and Shavell, optimal deterrence of anticompetitive infringement requires that the award represents the claimant's loss as well as the likelihood of the defendant escaping liability.Footnote ²¹³ However, Hylton recommends a fix minimum award proportional to the chance of liability being imposed. Exemplary damages would perform a punitive function where the defendant's profit exceeded the claimant's loss and the defendant has to internalise such loss. But exemplary damages can inhibit wrongdoers from acting if their illicit gain is equal or smaller than the victim's harm.Footnote ²¹⁴

Nevertheless, there is a limited place for exemplary damages being awarded as a means of preventing and also punishing the economic and competition torts, at least from a policy viewpoint. In effect, compensation is the typical, neither the exclusive nor the necessary aim of tort law. Prevention, retribution, rights-vindication, distribution, extra-compensation and restitution too are within tort law's remit.Footnote ²¹⁵ Specifically, exemplary damages discourage and castigate the commission or repetition of outrageous conduct aimed at injuring others, either maliciously or by exploiting victims as a means to making illicit profits.Footnote ²¹⁶ This form of retribution belongs to private law; hence, for instance, punitive damages are insurable risks.Footnote ²¹⁷ Further, insofar as exemplary damages are not awarded as a means of punishing egregious acts on behalf of the state, there is no need for according tortfeasors the sort of safeguards which protect the accused in criminal procedure.Footnote ²¹⁸ Nor is corrective justice impaired if, as is customary in England, punitive damages are rarely granted, to teach wrongdoers that tort does not pay and to affirm the strength of the law.Footnote ²¹⁹ In Rookes v. Barnard Footnote ²²⁰ Lord Devlin restricted exemplary damages to three narrow categories, their awards being subject to several conditions. First, compensatory damages must be inadequate to deter and punish misconduct. Secondly, the claimant has to prove that she is the indistinguishable victim of the defendant's act, which prevents windfalls. Thirdly, the award should not exceed the amount of criminal penalties nor outweigh litigants' resources. Fourthly, when alleging exemplary damages under the second category, the claimant must show that the defendant calculated to profit from his act, i.e., that he actually compared the risk of injuring the claimant with the probability of escaping liability.Footnote ²²¹ An eminent a proponent of corrective justice, Weinrib, has applauded the fact that, so tightened, the second category helps to neutralise unjust enrichment.Footnote ²²² In contrast, American juries have made unlimited use of punitive damages to protect a wide range of interests,Footnote ²²³ for example, granting huge sums against who merely frustrated the claimant's prospective agreement to merge with a third party after offering the latter a better deal.Footnote ²²⁴ But, in this author's view, even assuming that exemplary damages are awarded for reasonable amounts in particular cases, it is at any rate arguable that they might enrich already fully compensated victims, exacerbate vindictiveness, obstruct meritorious behaviour or undermine punitive goals.Footnote ²²⁵

Currently, English courts reject exemplary damages if the defendant has been penalised for anticompetitive acts, which is the most likely scenario as tort litigation normally follows the public antitrust enforcement. In Devenish Nutrition v. Sanofi-Aventis Footnote ²²⁶ the claimant was denied punitive damages despite the fact that the defendants' cartel clearly fitted Lord Devlin's second category. Lewison J. avoided the difficulty of assessing punitive damages and sought to prevent double jeopardy. He reasoned that the EC Commission had already punished the cartel and that exemplary damages discouraged infringers from denouncing serious anticompetitive acts. In fact, the defendants had been released from the fine under the leniency program (as whistle-blowers). Furthermore, Lewison J. noted that, since the cartel had impact on the whole EC market, punitive damages posed the risk of multiple claims being brought.Footnote ²²⁷ The Court of Appeal affirmed this decision but too rejected disgorgement damages as compensatory damages imparted sufficient relief.Footnote ²²⁸ However, some scholars have argued that private competition enforcement can be strengthened if infringers are deprived of their illicit profits. Compensatory damages are hard to calculate and inadequate where the defendant's gains surpassed the claimant's loss or the claimant has transferred to her customers the overcharges flowing from the infringement.Footnote ²²⁹ Conversely, as Lewison J. said, restitutionary damages do not entail the harsh proof of lost profits that often precludes compensation altogether.Footnote ²³⁰ Yet, after the Court of Appeal's ruling, restitution will probably have to be claimed through an action for unjust enrichment, as in Kleinwort.Footnote ²³¹

Although punitive damages are “a very blunt instrument of disgorgement”,Footnote ²³² as Weinrib argued, the second category is entirely germane to the economic and the competition torts by which the defendant seeks to profit unlawfully at her rival's expense. Exemplary damages do serve to counteract the abuse of market-powerFootnote ²³³ and undo the unjust enrichment pursued through antitrust conduct.Footnote ²³⁴ It is proposed, therefore, that exemplary damages are awarded whenever the defendant attempts to profit from her wrong, as a means of discouraging such behaviour. If the defendant was successful, punitive damages can also divest her of the gains intentionally and unlawfully obtained. Although this is not the place to measure empirically the effectiveness of exemplary damages as a deterrent, it is worth insisting that they differ from the penalties imposed by the competition authorities. Exemplary damages help to repress intentionally caused harm, especially as a means of self-enrichment. As Galanter and Luban have shown,Footnote ²³⁵ this remedy threatens the pocket, not the liberty, of economically powerful wrongdoers who have not been sufficiently punished by public law.