In its landmark judgment of 22 June 2022 in Case C-267/20 – Volvo and DAF Trucks, the CJEU confirmed that the five-year limitation period under the EU Directive on antitrust damages applies to all cartel damages claims which at the time of the transposition of the Directive into national law were not yet time barred. Equally, the Court stresses that neither the burden nor the standard of proof for the quantification of competition damages must be too high, and that national courts can estimate the amount of cartel damages where the action was brought after 26 December 2014. The judgment provides much awaited legal certainty for many cases in which the temporal application of the new limitation period and the quantification of damages under the Directive is at the heart of the debate.
Facts and procedure
By decision of 19 July 2016, the European Commission (‘Commission’) fined several truck manufacturers for participating in an EEA-wide cartel between 17 January 1997 and 18 January 2011 (‘LKW-Kartell’). A press release on the adoption of the Commission decision was issued on 19 July 2016. The non-confidential version of the decision and its multilingual summary were published on 6 April 2017.
Having purchased trucks in 2006 and 2007, the Spanish company RM brought a legal action for damages resulting from the cartel against Volvo and DAF before the Commercial Court of León, Spain, on 1 April 2018. The Commercial Court upheld RM’s action in part and ordered the defendants to pay a compensation of 15% of the purchase price of the trucks plus interest. It rejected the defendants’ plea of limitation on the ground that the five-year limitation period provided for under Article 74 of Law 15/2007, as amended by Royal Decree-Law 9/2017 which transposes Article 10(3) of the EU Damages Directive (‘Directive’), was in force when the action was brought, and was therefore applicable. On appeal Volvo and DAF argued that the Damages Directive was not applicable in the present case because it was not in force at the time when the infringement was committed.
The Provincial Court of Leon referred several questions to the Court of Justice of the European Union (‘CJEU’) for a preliminary ruling. They concern the temporal application of Article 10 and Article 17(1) and (2) of the Directive and the rules implementing them into Spanish law. In essence, the Provincial Court León seeks to clarify whether these rules, which foresee (i) a five-year limitation period (in contrast to the old Spanish limitation period of one year), (ii) the national courts’ power to estimate the damage caused by an infringement of Article 101 TFEU, and (iii) the presumption that cartels caused harm, are applicable to an action for damages which, while relating to a cartel that ceased before the Directive entered into force on 26 December 2014, was filed after the entry into force of the provisions transposing them into Spanish law.
Judgment of the CJEU
Substantive v procedural provisions
The CJEU, firstly, recalls its case law according to which a new rule of law applies from the entry into force of the act introducing it. But while it “does not apply to legal situations that have arisen and become definitive under the old law, it does apply to the future effects of a situation which arose under the old law and to new legal situations too” (para. 32).
Secondly, the Court stresses that the temporal application of the provisions of the Directive in general follows the distinction made in its Article 22 between substantive and procedural provisions. The Directive’s substantive provisions do not apply retroactively (Article 22(1)) while its procedural provisions apply to actions brought after the entry into force of the Directive on 26 December 2014 (Article 22(2)). The Court makes clear that the question as to which provision is substantive or procedural must be “assessed in the light of EU law and not in the light of the applicable national law” (para 39.).
New five-year limitation period is substantive, and applicable when claims for damages are not yet time-barred at the time of the transposition of the Directive
Following AG Rantos’ Opinion from 28 October 2021, the CJEU ruled that Article 10 of the Directive on the five-year limitation period must be considered a substantive provision (paras. 46-47). Importantly, the CJEU recalls that national legislation establishing the date at which the limitation period starts “must be adapted to the specificities of competition law” und “not undermine completely the full effectiveness of Article 101 TFEU” according to its judgment in the Cogeco case (para. 53). The Court requires that “the bringing of actions for damages on account of infringements of EU competition law requires, in principle, a complex factual and economic analysis” (para. 54). Against this background, the existing “information asymmetry to the detriment of the injured party (…) which makes it more difficult for the latter to obtain the information necessary to bring an action for damages” (para. 55) has to be taken into account. Importantly, the CJEU held that limitation periods applicable for actions for damages resulting from competition law infringements, in general, “cannot begin to run before the infringement has ceased and the injured party knows, or can reasonably be expected to know the information necessary to bring” an action for damages (para. 56 and 61). Otherwise, the limitation period would not comply with the principle of effectiveness.
In other words, a limitation period can only start to run, provided “the existence of an infringement of competition law, the existence of harm, the causal link between that harm and that infringement and the identity of the perpetrator of the infringement are among the necessary elements which the injured party must have in order to bring an action for damages” (para. 60). The CJEU agrees with AG Rantos and concludes that the starting point of the limitation period, in the Trucks cartel case, shall be the publication of the summary of the Decision on 6 April 2017 (para. 71).
The CJEU concludes that the new five-year limitation period is applicable from an inter-temporal law perspective, as Article 10 of the Directive is a substantive provision. The five-year limitation period is applicable even though the infringement occurred before the entry into force of the Directive, in so far as the damage claims were not time barred according to the old Spanish rule before the transposition period of the Directive expired (para. 79).
Courts’ power to estimate damages is procedural, and applicable to all legal actions brought after 26 December 2014
In addition, the CJEU concludes that Art. 17(1) pursuant to which (i) neither the burden nor the standard of proof for the quantification of competition damages must render the claims enforcement practically difficult or excessively difficult, and (ii) national judges are empowered to estimate the amount of harm is procedural in nature. In contrast, Article 17(2) on the presumption of harm is to be considered as substantial (para 105).
With regard to Article 17(1) of the Directive, the Court stresses that “the objective of that provision is to relax the standard of proof required for the purposes of determining the amount of harm suffered and to remedy the information asymmetry existing to the detriment” of the damaged party (para. 82).
The judgment of the CJEU contains important and long-awaited clarifications for the private enforcement of competition law in Europe, in particular in Members States with short limitation periods pre-Directive such as Spain. The Court decided that the five-year limitation period pursuant to Article 10 of the Directive applies to an action for damages, even if the cartel infringement occurred before the entry into force of the Directive. As a matter of fact, in the absence of clear rule in the Directive, the CJEU formulates a transitory rule according to which the new five-year limitation period applies as far as the damage claims at hand are not yet time-barred under the old national law rules before the transposition period of the Directive expired.
It has to be welcomed that the Court, while further developing its case law in Manfredi und Cogeco, recalls that national rules on the date at which limitation period start to run must be adapted to the specificities of competition law and not undermine the full effectiveness of Article 101 TFEU. Central in this respect is the CJEU’s clear statement that limitation periods applicable for actions for damages resulting from competition law infringements, in general, cannot begin to run before the infringement has ceased and the injured party knows or can reasonably be expected to know the information necessary to bring an action for damages. Otherwise, the limitation period would conflict with the EU principle of effectiveness. A limitation period under national law that does not depend on knowledge of the injured party in cartel cases is therefore inapplicable.
By Juraj Siska and Martin Seegers