This country-specific Q&A provides an overview to competition litigation laws and regulations that may occur in Colombia.
This Q&A is part of the global guide to Competition Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/competition-litigation/
What types of conduct and causes of action can be relied upon as the basis of a competition damages claim?
Colombian law does not have a specific regulation applicable to competition damages claims. Therefore, the damages that arise from breaches to the competition regime shall be indemnified as any damage caused to any person or group under civil law. For this purpose, there are two types of actions:
a. Individual actions: Under Colombian law, any person that suffers a damage has one of two civil liability actions depending on the source of the damage:
i. Contractual liability: These actions can be undertaken by any part of a prior legal bond (mainly contracts), as a consequence of a breach of any duty derived from such bond, meaning a contractual breach.
ii. Non-contractual liability or tort: In this case, the parties do not have a prior legal bond before the damage is caused.
Notwithstanding the aforementioned, a Competition damages claim normally undertakes the procedure of a tort considering that it is supported on a generic duty that is the protection and maintenance of the Competition in the markets, and this generic duty does not commonly arise from a prior legal bond but from the Colombian constitution and law.
b. Collective actions: Law 472 of 1998 regulates two specific actions that can be undertaken in order to protect a collective interest or the interests of a specific group:
i. Popular Action (“Acción Propular”): This action is designed to protect collective rights and interests. Competition is recognized as a collective right and interest on article 4 of Law 472.
This action has per purpose to prevent a contingent damage, eliminate a danger, hazard, violation or grievance to collective right and interests, or restore conditions to its prior state, if possible. It can be promoted by an individual or a group of persons. Considering that it protects a collective interest, the claim filled by a single individual will, in any case, benefit all the beneficiaries of such interest.
ii. Class Action (“Acción de Grupo”): This action shall be promoted by a group or an individual in representation of a group of people that have uniform conditions regarding a same cause from which several individual damages arise. This action has as exclusive purpose the recognition and payment of a compensation for the damages caused.
Considering the compensatory nature of the class action, it is the action more used to submit a competition damages claim. Also, collective actions are preferred against individual actions considering they have a preferential procedure and are decided in a shorter term.
The Colombian precedent on competition damages claims has arisen from a few class actions promoted by consumers or consumer’s leagues (or different organizations representing consumers and/or consumers’ interests) as a consequence of a decision issued by the Superintendence of Industry and Commerce, as competition authority in Colombia,
Please consider that for all the purposes of this questionnaire, we will differentiate between individual actions (considering mainly a tort action) and collective actions (considering mainly a class action).
What is required (e.g. in terms of procedural formalities and standard of pleading) in order to commence a competition damages claim?
a. Individual Actions: Prior to the filing of the lawsuit, the plaintiff shall try to conciliate the controversy, except for several specific cases in which the conciliation is not needed. Once the settlement has not been possible, the plaintiff may file the pleading which shall have:
i. The identification of the judge that shall decide the case.
ii. The name and domicile of the plaintiff and the defendant.
iii. The name of the attorney.
iv. The facts that support the pleading, dully determined, classified and numbered.
v. The evidence that the plaintiff wants to be considered in the trial and the one that it wants to request.
vi. A declaration under oath of the quantified value of the damages claimed.
vii. The rule of law.
viii. The amount of the lawsuit (Colombian law distinguish between three amounts: (i) minimum amount (below USD$11,042 approximately), (ii) minor amount (between USD$11,042 and USD$41,405 approximately) and (iii) major amount (above USD$41,405 approximately). The process value determines the competent judge and the procedure and length it will take.
ix. The address and email in which the parties will receive notices.
x. The mention that the damage was caused by a practice that is restrictive of the competition according to Colombian law (Decree 2153 de 1993).
b. Collective Actions
i. Popular Actions: These actions do not have procedural formalities. The pleading shall have:
- The mention of the collective right or interest that is being threatened or damaged.
- The facts, acts, actions and omissions in which the claim it is motivated.
- The claims (the petition).
- The identification of the individual, legal entity or public authority that is allegedly accountable for the damage or threat, if possible.
- The evidence that the plaintiff wants to be considered in the trial and the one that it wants to request.
- The address in which the parties will receive notices.
- The name and identification of the claimant.
ii. Class Actions: These actions do not have procedural formalities. The pleading shall have:
- The name of the attorney and the Power of Attorney.
- The identification of the grantors of the PoA including their names, identification number and domicile.
- An estimation of the damages’ value.
- If it is not possible to provide the name of all the individuals of the plaintiff group, provide the criteria for their identification and define the group.
- The individual, legal entity or public authority that is allegedly accountable for the damage, if possible.
- The facts, acts, actions and omission in which it is motivated.
- The claims (the petition).
- The evidence that the plaintiff wants to be considered in the trial and the one that it wants to request.
- The address in which the parties will receive notices.
What remedies are available to claimants in competition damages claims?
a. Individual Actions: As compensation for the damage caused, the plaintiff might request:
i. The cessation of the conduct.
ii. The order for the defendant to refrain from perform the conduct again.
iii. The order for the defendant to undertake rectifying conducts on the market.
iv. The compensation of damages which will include predominantly the patrimonial without excluding the extra-patrimonial damages.
b. Collective Actions:
i. For popular actions, the claimant might request the judge to:
- provide an order to do something or refrain from doing something,
- pay a compensation of the damages caused; and/or
- provide an order to undertake any action needed to restore conditions to its prior state, before the breach of the collective right or interest.
ii. For class actions, the only remedy to be requested is the compensation of the damages (which might include patrimonial and extra patrimonial damages).
What is the measure of damages? To what extent is joint and several liability recognised in competition damages claims? Are there any exceptions (e.g. for leniency applicants)?
For both individual and collective actions, the measure of the damages requires the application of a principle called “comprehensive reparation”, which entails that the proved damage shall be compensated as long as such damage is certain and direct. Therefore, it shall be a standard of proof of almost 100%. Additionally, the damage shall only be compensated by the individual or entity that directly performed the conduct that caused the damage.
If there are several accountable individuals or entities (meaning that there are several individuals or entities that directly performed the conduct(s) that caused the damage), they will have a joint and several liability according to law, and there are no exceptions to this rule.
What are the relevant limitation periods for competition damages claims? How can they be suspended or interrupted?
a. Individual Actions: The lawsuit shall be filled in the 10 years following the occurrence of the event that gives rise to the damage.
This term can be interrupted if (i) the debtor of the obligation (in this case, the individual or entity that caused the damage) acknowledges such obligation to compensate the damage; or (ii) when the lawsuit has been filled. Additionally, this term is suspended for any certain individuals under special protection such as the minors, the incapable, deaf-mute, or any individual under guardianship, until such protection has ended.
b. Collective Actions: For class actions, the lawsuit shall be filled in the 2 years following the occurrence of the event that gives rise to the damage or from the moment in which the event that cause the damage has stopped (on-going damage). This term cannot be suspended but only interrupted with the filling of the claim.
Regarding popular actions, the lawsuit can only be filled as long ad the threat or danger to the collective right or interests exists.
Which local courts and/or tribunals deal with competition damages claims?
a. Individual Actions: The lawsuit shall be filled against the administrative judges if the damage was caused by and act, decision or omission of a public entity. Otherwise, the competent judge will be the civil judge. The determination of the local judge for a competition damage claim depends on the following criteria:
- Territory: According to Colombian law, the competent judge will be one of the following:
- If the defendant is the Nation, the judge of the plaintiff’s domicile;
- If the defendant is a territorial public entity, the judge of the domicile of such entity;
- If the defendant is a legal entity, the judge of the domicile of the entity; or
- Otherwise, the judge of the place in which the harmful act took place;
If there are several defendants including the Nation, the competent judge will be the one of the plaintiff’s domicile. If there are several defendants including the a territorial entity (but not including the Nation, the competent judge will be the one of the domicile of such entity.
- Value of the claim:
- Minimum value: A civil or administrative judge (juez civil municipal o juez adminsitrativo) and the process will have a decision that cannot be appealed.
- Minor value: A local civil or administrative judge (juez civil del circuito o juez adminsitrativo). The tribunal will be competent to decide on the appeal.
- Major value: A district civil or administrative judge (juez civil del circuito o juez adminsitrativo). The tribunal will be competent to decide on the appeal.
b. Collective Actions: The lawsuit shall be filled against the administrative judges if the damage was caused by and act, decision or omission of a public entity. Otherwise, the competent judge will be the district civil judge (juez civil del circuito). The plaintiff can choose between the judge of the place in which the event took place, the domicile of the plaintiff or the domicile of the defendant.
The judge will be competent in a first instance while the tribunal will be competent to decide on the appeal.
How does the court determine whether it has jurisdiction over a competition damages claim?
Please see the answer to question 6 above.
How does the court determine what law will apply to the competition damages claim? What is the applicable standard of proof?
In both individual and collective actions, the applicable law will be the law of the place in which the damaging events took place.
The standard of proof to be applied by the judge is “clear and convincing evidence” according to which the judge shall apply a “reasoned judgment” (Sana Crítica) and conclude that the plaintiff demonstrated the highly probability of the truth of its allegations.
To what extent are local courts bound by the infringement decisions of (domestic or foreign) competition authorities?
Colombian judges are not bounded by the decisions issued by foreign competition authorities, unless such authorities are judges and their decisions undertake an exequatur procedure before the Colombian Supreme Court of Justice, for them to be enforceable in Colombia.
In principle, no administrative decision, even if it is issued by the Colombian competition authority bounds a judge that is in charge of deciding a competition claim.
In Colombia, the Superintendence of Industry and Commerce (the competition authority) has administrative faculties to investigate and impose sanctions to companies and persons that incur in anti-competitive activities. The sanctions imposed include fines that will be received by the Nation and that do not have as a purpose to compensate any damage caused.
As they serve different purposes, administrative decisions are not require for the judge to issue a sentence on a competition claim, and considering that the judge will have to make his own analysis of the conducts to determine if the conduct can be typified as an anti-competitive conduct and if it has caused a damage, in principle, it is possible that the judge and the competition authority provide decisions that might be contradictory.
To what extent can a private damages action proceed while related public enforcement action is pending? Is there a procedure permitting enforcers to stay a private action while the public enforcement action is pending?
As mentioned above, in principle, the judge can decide a competition claim without being necessary a prior decision of the competition authority or to wait for such decision if there is already an investigation on course.
What, if any, mechanisms are available to aggregate competition damages claims (e.g. class actions, assignment/claims vehicles, or consolidation)? What, if any, threshold criteria have to be met?
a. Individual Actions: According to article 148 of the General Procedural Code, the aggregation of claims can be made by the judge ex officio or by request of the plaintiffs in the following cases:
- When the claims could have been made in the same action.
- When the claims are related, and the parties are reciprocating plaintiffs and defendants.
- When the defendant is the same in all the claims and the defences proposed are supported on the same facts.
The aggregation can be made as long as the judge has not scheduled the initial trial.
b. Collective Actions: For its nature, the collective actions are designed to protect a group of people. Regarding a class action, any person that considers that has the same uniform condition as the other members of the group can request its aggregation to the claim before the start of the probationary period of the process. After that moment, any individual can be aggregate but cannot claim extraordinary damages seeking a higher compensation, nor can be benefited by the costs to be paid by the defeated defendant of the case.
Regarding popular actions, the sentence will have a sentence in genere and the interested parties shall undertake a small procedure for the determination of the sentence in particular determining the compensation.
Are there any defences (e.g. pass on) which are unique to competition damages cases? Which party bears the burden of proof?
For both individual and collective actions, there are no specific defences that are unique to competition damages cases, beside the precedent of prior decisions. The Colombian regulation includes an efficiency defense that is only applicable to administrative investigations undertaken by the competition authority and according to which, if there is a conduct that despite producing anti-competitive effects, it has more efficiencies on the market and pro-competitive effects, it will not give rise to any sanction.
Furthermore, regarding the burden of proof, for both actions any judge will apply the rule of probable cause. Under this rule, the plaintiff shall demonstrate all the elements of the liability including the damaging event, the damage, the liability attribution factor and the cause.
Is expert evidence permitted in competition litigation, and, if so, how is it used? Is the expert appointed by the court or the parties and what duties do they owe?
Regarding both individual and collective actions, as any other claim, it can be supported on expert evidence. As a general rule, the expert is appointed by the interested party which will submit a report of such expert with its claim or response. The other party has two different mechanisms to oppose to such report: (i) it can submit a different expert report or (ii) it can request the expert interrogation. In the second case, the expert might be interrogated not only by the party who request the interrogation but also by the judge.
Additionally, and exceptionally, the judge can, ex officio, order the expert evidence in which case, the expert will be chosen by the judge from a list designed for such purpose.
Regarding expert evidence submitted by the parties, each party will choose the expert guarantying its adequacy (or expertise on the matter) and its impartiality. In principle, the costs that arise from the expert evidence shall be covered by the party who request it, notwithstanding his right to include such cost as part of the expenses that the defeated party shall pay.
Describe the trial process. Who is the decision-maker at trial? How is evidence dealt with? Is it written or oral, and what are the rules on cross-examination?
a. Individual Actions: The length and phases of the procedure depends on the value of the claim as mentioned in answer to question 6 above. Nevertheless, in general all the procedures have two phases:
- Written Phase: This phase including the filling of the claim, and the response of the defendant as well as the request and order of evidence. This phase ends with the decision of the judge to start the probationary period.
- Oral Phase: This phase comprehends at least one trial (depending on the length of the process) in which all the evidence will be received, including the practice of examination to the parties, witnesses or experts (as explained above).
If the claim has a minor or major value, they will have a second instance.
b. Collective actions
- The popular action has a mixed nature as explained below:
(i) the process has a written phase in which the claim is filled and responded;
(ii) the judge will organize a hearing in which the parties will discuss a plan to prevent the contingent damage, eliminate the danger, hazard, violation or grievance to the collective right and interests, or restore conditions to its prior state, as applicable.
(iii) If there is not agreement on this plan, the judge will move forward with the analysis of the evidence, will receive the written final allegations of the parties and will take its decision. All the abovementioned is made through written means, notwithstanding the possibility to undertake examinations, testimonies, visits, etc.
For both individual and collective actions it is possible for the parties to request the other party examination. In this case, the party that request it can make up to 20 questions (only 10 for claims of a minimum value). There is no contra examination in these cases.
Nevertheless, the Colombian law also provides that the judge shall thoroughly examine each party as part of the initial trial in order to determine the subject of the dispute.
How long does it typically take from commencing proceedings to get to trial? Is there an appeal process? How many levels of appeal are possible?
a. Individual Actions: According to law, the judge has one year from the admission of the lawsuit to decide. This term can be prorogated for 6 more months. Nevertheless, as a consequence of the courts’ delays, this term is not being fulfilled and the judge is commonly taking between 3 years to decide, in a first instance. The first trial or hearing will take place in the year or year and a half following the admission of the lawsuit (approximately).
The decision of the appeal, according to law, shall take 6 months. This terms is not respected neither and the decision of second instance will probably take one year (approximately).
b. Collective Actions: The popular actions shall have, as provided by law, a priority for the judge except for specific exceptions, nevertheless, considering the interests involved and the complexity of the case, these actions, as well as class actions, can take up to 10 year to be solved (without including the time that an appeal might take).
Do leniency recipients receive any benefit in the damages litigation context?
Neither in individual or collective actions, leniency recipients receive any benefit. These actions have a compensatory purpose and, according to Colombian law, the victims right for compensation cannot be negotiated or affected by the leniency of the liable entity.
The leniency policy in Colombia, only applies for the administrative investigations before the Superintendence of Industry and Commerce as competition authority in Colombia.
How does the court approach the assessment of loss in competition damages cases? Are “umbrella effects” recognised? Is any particular economic methodology favoured by the court? How is interest calculated?
For both individual and collective actions, the judge usually requires an expert to assist on the loss calculation. By its part, the experts in Colombia use different methodologies for these calculations considering the cause of damage and the market in which such damage took place. None of those methodologies are preferred but it depends of the expert report.
There is no precedent of umbrella effects being recognized in Colombia, until this date.
Regarding the interests, law provide that during the trial and procedure, there will not be interests, nevertheless, between the harmful event and the sentence, the interests will be equal to a yearly 6%.
Please consider that if the subject of the claim is a future damage, the compensation will be reduced in the 6% aforementioned.
Once the sentence has been issued and if the defendant does not pay the compensation, there will be default interest at 1.5 times the current bank interest (interés bancario corriente).
Can a defendant seek contribution or indemnity from other defendants? On what basis is liability allocated between defendants?
For both individual and collective actions, there are two mechanisms to seek indemnity or contribution from third parties:
- Impleader (Llamamiento en garantía): It allows the defendant to joint to the claim procedure a third party that might be liable for the compensation of the damage caused.
- Cross claim (Demanda de coparte): It allows a member of a joinder to submit a claim against other members of such joinder for the contribution or indemnity for the damages claim.
In both events, the judge of the initial claim will solve the additional claim once it concludes that the defendant is liable and shall indemnify the plaintiff.
As mentioned above, the defendants will only be liable if there is evidence that they were direct and certainly accountable of the damages. In several cases, there might be a joint and several liability between the parties, such as when the damage was caused by an anti-competitive agreement, in which case all the parties of the agreement are usually considered accountable and therefore, they will be jointly liable for the compensation.
In what circumstances, if any, can a competition damages claim be disposed of (in whole or in part) without a full trial?
In both individual and collective actions, a damages claim can be disposed through one of the following mechanisms:
- Settlement: The parties of a claim can settle the dispute at any time before the sentence. The settlement can be reached during the procedure (before the judge), or directly.
- Withdrawal: The plaintiff might withdraw the claim at any time before the sentence. This withdrawal is (i) unilateral, (ii) unconditional, (iii) entails the withdrawal to all the claims of the lawsuit, and (iv) the decision that declares the withdrawal is comparable to an acquittal.
What, if any, mechanism is available for the collective settlement of competition damages claims? Can such settlements include parties outside of the jurisdiction?
As a general rule, each entity or individual accountable for the damage needs to settle with each victim, notwithstanding the possibility to reach a joint settlement approved by all the parties. A settlement reached by one victim or one defendant, will not be binding for other victims or defendants.
Nevertheless, if the defendants are part of a joinder (litisconsorcio), which might happen if they are jointly and severable liable, the settlement reach by one of them will benefit the others. This rule does not apply if the joinder is voluntarily formed.
What procedures, if any, are available to protect confidential or proprietary information disclosed during the court process? What are the rules for disclosure of documents (including documents from the competition authority file or from other third parties)? Are there any exceptions (e.g. on grounds of privilege or confidentiality, or in respect of leniency or settlement materials)?
In principle, the parties shall provide the information needed for the case and the files of any trial in Colombia are public information and as such, they can be accessed by any interested party. Nevertheless, the law provides several rules that established that certain information is confidential or reserved, such as the information related to intellectual property, personal information or information that might affect the right of intimacy, and business secrecy.
In these events, the party can argue that the information is reserved and provide the rule of law that supports such reserve, in order to not be forced to disclose it. The judge will decide if the information is indeed reserved or if it shall be submitted.
In any case, the party might request that if the information to be submitted is kept in a reserved file that could not be accessed by any third party.
Can litigation costs (e.g. legal, expert and court fees) be recovered from the other party? If so, how are costs calculated, and are there any circumstances in which costs recovery can be limited?
In both individual and collective actions, the defeated party will need to pay the costs of the process, which are calculated by the judge considering the duration of the process, the evidence required and the complexity of the case. Please consider that any legal fee will not be included in such costs but are part of a different payment concept, which does not correspond to the legal fees actually paid but are already fixed by the competent authority, depending on the procedure.
Are third parties permitted to fund competition litigation? If so, are there any restrictions on this, and can third party funders be made liable for the other party’s costs? Are lawyers permitted to act on a contingency or conditional fee basis?
Neither in individual or collective actions is permitted to receive any kind of fund.
Yes, the legal fees can be partially calculated based on contingencies or the fulfillment of certain conditions, nevertheless the Colombian authorities have provided that the fees cannot be fully determined on this basis, otherwise it could end in abuse by the lawyers to its clients. Therefore, it is common to include a fixed fee and additional conditional fees that depend of, for example, a favorable decision.
What, in your opinion, are the main obstacles to litigating competition damages claims?
Considering the lack of precedent on this matter we have identified to main obstacles regarding litigating competition damages claims:
- There are no clear rules applicable to the determination of the damages caused. The general rules regarding proof of damages can be excessive considering that competition claims normally entail the compensation of damages caused to a group.
- Considering that there is no regulation regarding the binding nature for the judge of the decisions issued by the competition authority, there might be contradictory decisions between them.
What, in your opinion, are likely to be the most significant developments affecting competition litigation in the next five years?
There have been discussions and more cases regarding these matters that might entail developments on the mechanisms for the determination of methodology for the damages’ estimation.
Additionally, the precedent on competition litigation and damages claims in general, might help in the application of a compensatory damage principle according with the damage can be compensated through the restitution of the benefit received by the accountable entity.
Finally, we expect that via regulation and precedent, we will have development on punitive damages.