Optimal Contract Reformation as a New Approach to Private Antitrust Damages in Cartel Cases

This article proposes an incentive-based method to facilitate private antitrust enforcement in the European Union. Focusing exclusively on cartels, the article first explains why antitrust enforcement benefits from being both public and private. It goes on to suggest that through an improved co-ordination of leniency and fining policies, sufficient deterrence can be achieved through public enforcement alone, without the need to add further deterrence with private actions. As a consequence, private enforcement could be re-focused solely on compensation and thus avoid the complications implied in the pursuit of deterrence. Furthermore, an incentive-based bargaining scheme, namely an optimal contract reformation model based on contract law, is proposed, which would facilitate the judge’s task in establishing damages and seeks to encourage parties to settle. The scheme attempts to address the inherent lack of access to evidence experienced by claimants in private antitrust litigation. If the scheme can have a positive impact for follow-on actions, stand-alone actions may still need to rely on instruments such as court disclosure orders. Finally, the article attempts to establish a theoretical background for the proposed optimal reformation model on the basis of contract law