Cartel damages 2.0 in Germany – the draft bill has arrived


After the implementation of the new EU Directive on antitrust damages actions into German law it will be much easier for cartel victims to pursue their claims. The position of indirect customers of cartelized products or services will be strengthened, the limitation period will be extended and most of all the German legal system will see the implementation of a German version of disclosure. The Federal Ministry of the Economic Affairs and Energy has recently published the awaited draft legislation. It remains to be seen whether these rules will make their way into the final wording of the law or whether they will be subject to further changes. The implementation deadline is 27 December 2016. We will keep you updated on this blog. The most significant change is the introduction of a German disclosure system. It enables the parties to collect important evidence from documents in possession of the opponent. While this tool is already well familiar to English and American courts it is unknown to German civil procedure. Existing versions of a "right to information" suffer from high requirements under German law. This has resulted in judges being very cautious with this issue. Hence in most cases this did not make life easier for claimants in particular. The draft bill even goes beyond the requirements of the Directive; the following aspects are particularly relevant:

  • Right to disclosure: Both claimants and defendants have a right to disclosure in relation to necessary evidence and information. Cartel victims can bring such a claim even before the main damages proceedings, which increases the pressure to settle in advance. The draft bill emphasizes this aspect in particular.
  • Rule/Exception: Disclosure of evidence and information is excluded where it is considered to be disproportionate. The draft legislation thereby seems to consider the proportionality of disclosure the rule and the disproportionality the exception.
  • Sanctions: According to the draft legislation a claim for damages will be available against a party who does not comply with its duty of disclosure.
  • Costs of disclosure: The party under the duty of disclosure will be able to claim any necessary expenses incurred in preparing the disclosure from the party requesting disclosure.
With that said one thing is already for certain: from now on it will be easier to bring cartel damages claims in Germany. This makes German courts even more attractive to claimants. But defendants will also benefit from the new disclosure system especially in preparing their pass-on defence. They can also request documents from claimants to check their damage calculation. Presumption of damage, Pass-On and more The draft bill in particular also covers the following requirements of the Directive:
  • Presumption of harm: There is now an explicit presumption that a cartel has caused harm.
  • Pass-On: The draft bill provides that in certain cases there will be a presumption in favor of indirect customers that they have incurred harm. This enables those indirect consumers to claim damages more easily.
  • Limitation Period: The new limitation period is five years. It is suspended for the duration of proceedings of the competition authorities. The explanatory notes to the draft bill clarify that this includes the duration of any appeal against the authorities' decision. This enables claimants to await the final decision of the competition authorities before bringing their claims.
  • Joint and several liability: Cartelists will be jointly and severally liable meaning that each cartel participant will be liable for the full extent of damages if the infringement was carried out collectively. Small and medium-sized enterprises (SME) as well as immunity recipients might be exempt from this rule in some cases. As a first step they are only liable for damages of their own direct and indirect customers. Contribution claims will be calculated according to relative responsibility of each cartel participant. The explanatory notes to the bill set out that objective and subjective contributions as well as market share can be taken into account.
Absent any transitional provisions parties will also have to check whether these changes may affect ongoing proceedings.

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