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Competition Litigation in Mexico

Availability of civil claims

Scope for civil claims in Mexico

Stand-alone and follow-on claims are available in Mexico.

Civil claims can be brought under the general provisions of the Federal Civil Code and the Federal Civil Proceedings Code, before federal courts specialized in competition, broadcasting and telecommunications matters against any “undertaking” (defined as a natural or legal person carrying on any economic activity) by a party who has suffered loss as a result of a monopolistic practice, the abuse of a dominant position, an illegal cartel or an unauthorized merger.

According to Article 134 of the Mexican Competition Law 2014, a prior finding of infringement by the Federal Economic Competition Commission (“Cofece”) is a precondition to bringing such an action. Findings issued by other national competition authorities cannot be relied upon in order to support any civil claim under this provision.

Any potential claimant should therefore file a complaint before Cofece and obtain a final administrative finding that an infringement has occurred (if no such finding has otherwise been made) before initiating a civil action intended to recover damages. Any indication of a potential violation of the Mexican Competition Law is sufficient to file a complaint and for Cofece to initiate an investigation. Cofece is also empowered to initiate an investigation of such infringements in its own right.

Depending on the complexity of the case, an administrative proceeding before Cofece might take between 18 months and four years. The investigation stage can take between six months and two years while the administrative procedure of formulating a decision can take between one and three years. Furthermore, a final ruling could be challenged by means of a constitutional trial (amparo) before the abovementioned specialized courts. In practice, this judicial stage might take up to 18 months to be resolved and, depending on the complexity of the case, sometimes even longer.

It is worth mentioning that any person can file a complaint about any monopolistic practices or illegal concentrations.

Applicable limitation periods

The general limitation period for bringing a civil action for damages is two years from the date that Cofece’s administrative ruling becomes final (once the amparo trial is resolved or if no amparo trial is filed, within the 15 working days after the final ruling is notified to the affected party). However, in the case of class actions (see section 4 below), the limitation period is three years and six months.

Additionally, since a final ruling declaring an infringement of competition law is a precondition to any civil action for damages being brought, it is important to mention that Cofece is not empowered to investigate activities that ceased more than 10 years before.

However, it should be noted that Cofece is able to make a finding regarding activities that began more than 10 years previously, where the activities complained of are continuing.

Appeals

Cofece decisions may be challenged only by way of a constitutional bi-instance trial (amparo indirecto) before federal courts specialized in competition, broadcasting and telecommunications on a matter of law (e.g., violation of any fundamental constitutional rights of the parties).

Judgments of specialized courts referred to above, which would rule on any action for damages at first instance, can be challenged before a single judge circuit tribunal. The resolution rendered in the appeal may in turn be challenged through a constitutional single instance trial (amparo directo) on grounds that fundamental rights of the parties have been breached.

The appeal might take between six months and one year and the further amparo appeal might take between six months and three years.

Availability of class actions for infringement of competition law and/or damages in Mexico

Class actions (collective actions) were introduced to Mexican law by amendments to the Federal Civil Proceedings Code (enacted in August 2011 and in force at the end of February 2012). This statute allows Cofece and/or any representative of a group comprising at least 30 members to file a collective action for damages in circumstances where a group of end consumers have been harmed by an anti-competitive practice. As with individual actions, a prior finding of infringement by Cofece is a precondition to bringing a collective action for damages.

In order to qualify as a group representative, the relevant individual/undertaking must have the characteristics of the affected class and meet the requirements of the Civil Proceedings Code (i.e., to act diligently, professionally and in good faith, without conflict of interests or history of having filed frivolous actions). The class representative need not advertise the action and consumers who do not seek to join the action are not bound by any final judgment.

It is worth noting that two or more undertakings are able to file a single complaint before Cofece to initiate the corresponding administrative investigation.

Conduct of proceedings and costs

Burden of proof

A private claimant seeking damages may rely on Cofece’s finding of infringement to establish the defendant’s liability, but must prove beyond reasonable doubt that a causal link exists between the infringement and the loss suffered, as well as the extent of the loss itself.

Any evidence relevant to proving loss (i.e., a detriment suffered by the claimant) is admissible, such as accounts showing a decrease in income. However, losses resulting from infringements of competition law are often very difficult to quantify. Specialized federal courts are entitled to ask Cofece for an opinion to estimate the loss caused by the infringement. 1 However, the specialized federal courts are not obliged to ask for the estimate nor are they bound to accept it if provided by Cofece.

Joint and several liability of cartel participants

There is no specific law or rule on joint and several liability for damages in respect of private competition litigation in Mexico. When there are several persons deemed responsible for a breach of competition (e.g., in a cartel case), a claimant may sue one, several or all members at once. In such cases, applying tortious principles, the court is required to distribute liability to pay damages proportionally between the defendants according to the degree of responsibility the court considers that the defendants share in the infringement.

There is no rule allowing for the joinder of defendants to an action where only one cartelist is sued. However, in theory, a claim for contribution as between defendants may be possible.

Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege

US-style discovery is not available in Mexico. Each party must produce evidence in support of its case and is not obliged to share any information with its counterparties. It is possible to apply for an order from the court requiring a party to disclose specific information. However, such applications must be targeted and must specifically identify the information sought.

It is important to mention that, during the investigation stage of the proceedings, neither the claimant nor the defendant has access to the investigation file. However, the parties may obtain non-confidential copies of the investigation file after the investigation stage of the proceedings has been concluded. Also, once the administrative procedure is concluded, any person may obtain a non-confidential copy of the infringement decision from Cofece. Where civil proceedings have been initiated before specialized federal courts, courts may (and usually do) request the entire non-confidential administrative file from Cofece.

In proceedings before Cofece, in addition to the evidence filed by the claimant, Cofece may, during the investigation stage of the proceedings, request any information and documents it deems relevant to the investigation from the parties. Dawn raids may be conducted at the premises of the undertakings under investigation. Cofece may also order any third party to provide witness evidence in respect of its investigation. Cofece is not empowered to compel production of such information prior to initiating an investigation formally.

Pre-action disclosure

Pre-action disclosure is not available in Mexico. However, where a potential claimant can prove that there is a substantial risk that a person might abscond or a document might be destroyed or modified, and that evidence is essential to resolve the potential claim, the specialized federal court may order the person to give evidence or that the document be produced.

Average length of time from issue of claim to judgment in Mexico

A private enforcement claim might take between nine months and two years (or more) to be resolved at first instance. An appeal against the first instance decision and the amparo trial against the appellate court decision might take an additional nine months to three years.

The time frame for the proceedings suggested is only an estimate which is based on typical cases tried in the past. It is important to bear in mind that each case is different and its duration would depend on many factors, including the workload of the courts, the legal strategy followed and the procedural nuances of each case. In addition, it is worth mentioning that no action has been brought since the Mexican Competition Law 2014 came into force, given the specialized federal courts competence to resolve private damage actions resulting from competition violations.

Average cost from issue of claim to judgment in Mexico

There are no court fees to be paid for litigation in Mexico. Legal representation costs and professional fees vary widely depending on the complexity and the quantum of damages claimed in the case.

In ordinary civil and commercial cases, the courts may order that the losing party pay the winner’s costs. The rules to determine the amount of legal fees payable by the losing party vary depending on the procedural rules applicable to each case (but is rarely the full amount actually incurred).

In class action cases, each party must bear its own legal costs regardless of the outcome. It is open to the class to determine how costs are split between them.

Third-party/alternative funding

There is no rule preventing alternative funding of litigation in Mexico. In practice, it is common to provide for a contingency fee payable if the claim is successful and a regular fee payable regardless of the outcome so as to cover the basic costs of representation.

Alternative methods of dispute resolution

Arbitration is only possible in Mexico where the parties have entered into an arbitration agreement that includes resolution of the issues in dispute or if the parties conclude an arbitration agreement after the dispute has arisen. In both cases, the agreement must be in writing.

Determination of whether a competition infringement has occurred is considered a matter of public interest and so is the preserve of Cofece. Accordingly, an arbitration may only address the question of resulting damages if the award is to be enforceable in Mexico.

Arbitration is only possible in Mexico where the parties have entered into an arbitration agreement that includes resolution of the issues in dispute or if the parties conclude an arbitration agreement after the dispute has arisen. In both cases, the agreement must be in writing.

Determination of whether a competition infringement has occurred is considered a matter of public interest and so is the preserve of Cofece. Accordingly, an arbitration may only address the question of resulting damages if the award is to be enforceable in Mexico.

Arbitration is only possible in Mexico where the parties have entered into an arbitration agreement that includes resolution of the issues in dispute or if the parties conclude an arbitration agreement after the dispute has arisen. In both cases, the agreement must be in writing.

Determination of whether a competition infringement has occurred is considered a matter of public interest and so is the preserve of Cofece. Accordingly, an arbitration may only address the question of resulting damages if the award is to be enforceable in Mexico.

Relief

Availability of damages and quantification

Damages resulting from a breach of competition law may be awarded in accordance with the general rules of civil law. Under Article 2108 of the Federal Civil Code, these can be defined as any loss or detriment to the undertaking patrimony and may include loss of profits.

Under Mexican law, the defendant will be considered liable only in relation to those losses that are the immediate and direct consequence of its conduct. As such, while the “passing-on defense” has not yet been formally recognized in Mexico, in theory, it might be raised since the claimant can only be indemnified for the damage that it has actually suffered.

To date, there have been no final judgments awarding damages to a claimant in a private competition law case and so there is not yet an established practice in Mexico of quantifying damages in such cases. Generally, damages are quantified by federal courts upon the motion of the claimant. Additionally, the court may appoint experts to advise on the method of calculation and the exact amount of damages. While the parties do not have any input to this appointment, it is open to them to appoint their own experts during trial in order to comment on these issues.

Punitive and exemplary damages

Punitive or exemplary damages are not available under Mexican law.

Availability of interim or final injunctions in respect of an alleged competition law infringement

Under Article 135 of the Mexican Competition Law 2014, in cases where the harm to the competition process might be irreversible, Cofece is empowered to issue precautionary measures so as to order an undertaking potentially guilty of an infringement 2 to cease the conduct that might be deemed anti-competitive until a final ruling has been passed. These precautionary measures do not prejudice the outcome of the final ruling.

Such measures are at the discretion of the Cofece and may not be formally requested by the affected party.

Other types of relief

Other types of relief are not available under Mexican law.

Emerging Trends

No civil damage claims have been publicly reported as issued in Mexico. The lack of claims is likely to be a result of a finding of infringement by Cofece being a precondition to filing a damages claim in Mexico. Notwithstanding this, given the recent strengthening of Cofece powers with the New Competition Law, such claims may become more common in the near future.

1 Cofece makes this opinion using all the information contained in the administrative file, which includes market information for the involved parties provided by the claimant or by the investigated undertakings.

2 After the investigation stage of the proceedings, if there are enough elements to presume an infringement, Cofece issues a preliminary resolution of alleged responsibility (dictamen de probable responsabilidad) against the parties under investigation to initiate the administrative procedure.