{"id":10598,"date":"2025-01-31T10:37:58","date_gmt":"2025-01-31T09:37:58","guid":{"rendered":"https:\/\/carteldamageclaims.com\/?p=10598"},"modified":"2025-01-31T10:47:09","modified_gmt":"2025-01-31T09:47:09","slug":"cjeu-confirms-the-assignment-model","status":"publish","type":"post","link":"https:\/\/carteldamageclaims.com\/de\/2025\/01\/31\/cjeu-confirms-the-assignment-model\/","title":{"rendered":"CJEU confirms the assignment model as an effective means to enforce claims for antitrust damages (ASG 2)"},"content":{"rendered":"
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<\/p>\n

In its much anticipated ruling of 28 January 2025 in Case C-253\/23, ASG 2<\/i><\/a>, the Grand Chamber of the Court of Justice of the European Union (\u2018CJEU\u2019) confirmed that it is generally possible for victims of infringements of EU competition law to transfer their claims for damages to a commercial plaintiff for the purpose of their joint enforcement.<\/p>\n

Facts of the case<\/h1>\n

<\/p>\n

32 sawmills from Germany, Belgium and Luxembourg that purchased roundwood from or via the German Land<\/em> of North Rhine-Westphalia (\u2018NRW\u2019) are of the opinion that they paid excessive prices because NRW is alleged to have harmonised the roundwood prices for itself and other owners of woodland in breach of the EU ban on cartels (Article 101 TFEU). The Federal Cartel Office adopted a commitment decision in this regard.\u00a0<\/p>\n

Each sawmill contractually assigned its right to compensation for the harm caused by the alleged cartel to ASG 2, a private company and provider of legal services duly authorised for debt collection services under the German Legal Services Act (Rechtsdienstleistungsgesetz<\/i>, \u2018RDG\u2019). Thus, before the German Regional Court of Dortmund, ASG 2 seeks consolidated compensation for that harm, based on several hundred thousand roundwood purchases by the sawmills concerned. In doing so, ASG 2 acts in its own name and at its own expense, in return for fees in the event of success.<\/p>\n

The Regional Court asked the CJEU whether it is compatible with EU law that \u2013 in the absence of a judgment of the German Supreme Court in competition cases \u2013 some lower courts in Germany interpret the RDG to the effect that assignments of cartel damages claims for the purpose of joint enforcement under the RDG are inadmissible. Following such case law, ASG 2 would lack standing to sue. In view of the Dortmund court, German law does not provide for any remedy equivalent to the (claims) assignment model, especially in its relevant form of a \u2018group action for collection\u2019 (Sammelklage-Inkasso<\/i>) which could ensure effective compensation in cartel cases. Advocate General (\u2018AG\u2019) Szpunar issued his Opinion<\/a> on 19 September 2024.<\/p>\n

<\/p>\n

Findings of the CJEU<\/h1>\n

The CJEU bases its findings on Article\u00a0101 TFEU, read in conjunction with Articles 2(4), 3(1) and 4 of Directive 2014\/104\/EU on antitrust damages, and Article\u00a047(1) of the EU Charter of Fundamental Rights on the right to effective judicial protection.<\/p>\n

Accordingly, EU law confers on any person harmed by an infringement of competition law the right to claim full compensation for that harm. The CJEU confirmed that, in accordance with Article 2(4) of Directive 2014\/104\/EU, an action for damages may be brought by a third person to whom that right has been assigned, and thus the active legitimation of claims vehicles in case of a full transfer of the claim.<\/p>\n

In principle, it is for the domestic legal system of each Member State to lay down the detailed rules governing the exercise of that right to claim compensation in such a case. This also applies to both the establishment of a mechanism for a group action for damages and the conditions governing the validity of a transfer of that right to compensation to a third party with a view to situations where the latter bundles and enforces claims of multiple victims of anticompetitive practices before a national court.<\/p>\n

However, due to the principle of effectiveness and the right to effective judicial protection under EU law, national law cannot prevent cartel victims from assigning their rights to compensation to a provider of legal services (the assignee) which intends to assert them in a damages action, provided that<\/p>\n

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  1. the relevant national law does not provide any other collective remedy capable of ensuring that the right to compensation is exercised effectively, and<\/li>\n
  2. an individual action, having regard to all circumstances of the case at hand, makes the exercise of that right impossible or excessively difficult, resulting in the allegedly injured parties being deprived of their right to effective judicial protection.<\/li>\n<\/ol>\n

    It is up to the national court seised to determine whether these provisions are fulfilled in the case at hand. The court must take account of all relevant facts and factors regarding the possibility to effectively exercise the right to full compensation based on the rules laid down by national law.<\/p>\n

    In case of affirmation, the court should seek to interpret the national provisions in a way that complies with EU law. Should an interpretation consistent with EU law be impossible, the court should disapply the national provisions prohibiting the assignment model.<\/p>\n

    With regard to the specific \u2018group action for collection\u2019 within the meaning of the German RDG in the main proceedings, the CJEU adds: If the Dortmund court were to find that the assignment model constitutes the \u2018only procedural means\u2019 for the sawmills to effectively assert their right to compensation, such a finding would be without prejudice to the application of the national provisions governing the activity of the assignee in order, in particular, to guarantee the quality of their services and the objective and proportionate nature of the remuneration received by them, and to prevent conflicts of interest and abusive procedural conduct.<\/p>\n

    Comment<\/strong><\/h1>\n

    The judgment of the EU\u2019s top court is not surprising. The fact that the assignment model plays an important role in the practice of the private enforcement of competition law has been recognised and accepted by the CJEU already (see judgment of 21 May 2015 in Case C-352\/13, CDC Hydrogen Peroxide<\/em><\/a>). It provides for a collective approach to effectively asserting cartel damages claims, a kind of opt-in group action based on substantive law, which is, in itself, independent of the procedural means for collective redress of the Member States.<\/p>\n

    Recognition of the advantages of the assignment model by the CJEU<\/em><\/h3>\n

    As the CJEU points out, as a rule, the possibility that an action for antitrust damages may not only be brought by the person who enjoys the right to compensation but also by a natural or legal third party to whom the right of the alleged injured party to seek compensation has been assigned is directly envisaged by the Directive 2014\/104\/EU (\u00b668). The assignment model offers numerous advantages for cartel victims, but also for the defendants and the courts in such cases (for details, see hier<\/a>).<\/p>\n

    According to the CJEU, the assignment model \u2018is likely to facilitate the exercise of the right to compensation\u2019 (\u00b685). This is in particular true in view of \u2018stand-alone actions\u2019 for damages, where there is no \u2018final\u2019 finding of an infringement by a competition authority (as in the case of a mere commitment decision such as that in the Dortmund main proceedings). Although not directly subject to the CJEU\u2019s substantive review, however, the same applies for \u2018follow-on actions\u2019 that can rely on such a finding.<\/p>\n

    The bundling of numerous antitrust damages claims by specialised entities generates considerable economies of scale and know-how. The CJEU therefore rightly emphasises the \u2018complex factual and economic analysis\u2019 as an argument for grouping individual claims of that kind together (ibid.). This also undermines the criticism of the German courts referred to by the Dortmund Regional Court, which claimed that (fiduciary) assignments of such claims would violate the RDG precisely because of the complexity inherent in actions for antitrust damages. Incidentally, this criticism had already been explicitly countered by the German legislator in 2021.<\/p>\n

    The necessity of the assignment model under EU law is to be assumed in individual cases<\/em><\/h3>\n

    The requirements under EU law that the CJEU places on the necessity of a \u2018group action for collection\u2019 based on (fiduciary) assignments pursuant to the RDG (\u00b694) are narrow only at first glance. On closer examination, they are likely to be met in most situations:<\/p>\n