Collective Redress in Cartel Damages Actions in Europe: Light on the Horizon—Or Storm Brewing?

Vol. 43 No. 1

By

Ines Bodenstein, Alexander Fritzsche, Christian Steinle, and Stephan Wilske are antitrust and dispute resolution lawyers in the Brussels, Frankfurt, and Stuttgart offices of Gleiss Lutz.

In recent years, follow-on cartel damages claims (that is, private claims following public proceedings) have attracted increasing interest from both potential plaintiffs and former cartelists among businesses in Europe. This, of course, includes U.S. businesses active in Europe. The process of cleaning up whole industry sectors—in some cases on a worldwide basis—spurred by the competition authorities’ leniency policies promoting disclosure in return for full or partial immunity, has produced heterogeneous groups of victims and alleged wrongdoers. Indeed, sometimes the same persons, companies, or groups can be both alleged victims and wrongdoers at the same time for different products.

As a consequence, boards are faced with difficult decisions as to whether it is in their interests and those of their shareholders to seek redress from (former) business partners. At the same time, the general climate for competition litigation in Europe has changed considerably since the European Commission began actively promoting civil actions as a means of complementing competition law enforcement in the wake of a major 2004 reform. This development was facilitated by several judgments of the EU Court of Justice making it clear that anyone who sustains harm from competition law violations must be granted effective redress mechanisms under the national law of the member states.

A major issue concerning competition litigation is how to deal with mass harm situations; that is, situations in which many potential claimants have been harmed by the same unlawful conduct. Effective redress is particularly difficult where the amount of harm suffered in each individual case is too small to justify the risks of litigation because the risks are out of proportion to the expected benefits. For almost a decade, the European Commission has advocated collective redress mechanisms as part of its efforts to foster competition litigation. Only now is the sky above collective competition litigation beginning to clear or, depending on one’s perspective, to darken.

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