Shortly after the publication of the Tráficos Manuel Ferrer sentencia by the Court of Justice of the European Union (CJEU) in response to a request for a preliminary ruling (16 February 2023), the judge from the Valencia court who had referred the questions to the CJEU delivered his judgment in the same case (“Valencia Court Judgment”) relating to the European trucks cartel (10 March 2023). Following his interpretation of the CJEU judgment, this ruling could iron out the differences between various approaches Spanish courts follow in making judicial estimations of damages related to competition law infringements.
1. CJEU: judicial estimation remains a possibility with certain conditions
The essence of the CJEU judgment relevant to the discussions in this post is that a national court can estimate the harm of competition law infringements only “on the premiss that” (i) the existence of the harm is established and (ii) the harm is “practically impossible or excessively difficult” to quantify with precision. In addition, whether the defendant discloses data to the claimant is “not, in [it]self, relevant for the purposes of assessing whether it is permissible for the national courts to undertake an estimation of the harm […]”.
However, the Luxembourg Court leaves the question open in terms of how national judges evaluate whether a quantification is impossible or excessively difficult. Based on the CJEU judgment, it should be considered whether further steps could be taken to quantify the harm. Requesting the defendants to disclose evidence is mentioned as a primary tool in the judgment. However, it is ultimately up to the national judge to verify (and choose the means of verification) whether the claimant has made use of “further steps” before deciding to carry out a judicial estimation of the damage. The judge of the Valencia court reasons that any excessive difficulty in estimating damage should be questioned in cases where, for example, the claimant unjustifiably refuses a measure of evidentiary disclosure.1Valencia Court Judgment 47, 58
Importantly, the main point of the CJEU ruling, according to the Valencia judge, is that no Spanish court can ever again grant damages based on a judicial estimation without a proper assessment of the damage.2Valencia Court Judgment 49 In other words, judicial estimation is not to be used to replace the passive behaviour of the claimants. This, according to the judge, is beneficial as it generates legal certainty in front of Spanish courts and prevents the judicial system from being abused by mass litigation.3Valencia Court Judgment 23
2. Valencia court: CJEU ruling applied, damage estimation of the claimant accepted
In line with the CJEU ruling, a judicial estimation is not carried out by the Valencia court because – as clear from the judgment – no evidentiary difficulty arose that would have constrained the court awarding damages. In that sense, the court concludes that the existence of the harm is established (CJEU ruling, first condition), but the court does not think that it was impossible or excessively difficult to quantify the damage (CJEU ruling, second condition).
Demonstrating that a judicial estimation is not appropriate or necessary in Tráficos Manuel Ferrer, the Valencia court carefully reviews the arguments of the parties and, eventually, accepts the damage calculations of the claimant despite some methodological issues and contradictions in the analysis. This is because the proposed approach by the claimant’s expert to analyse the market is plausible and reasonable.4As noted by the judge, in cartel cases where the presumption of damage is applicable, the claimant must present a reasonable attempt to quantify a damage. (Valencia Court Judgment 18) ,5Valencia Court Judgment 2 However, that the claimant’s estimation is accepted despite its weaknesses is also related to the inadequate reasoning of the defendant.
According to the judge, the defendant is expected to shed light on the practical functioning of the trucks cartel. Based on the findings of the European Commission in its binding infringement decision, theoretical explanations about information exchanges and econometric analyses showing zero cartel effect do not suffice. This is in line with the expectations of the English Competition Appeal Tribunal (CAT) set out in the Royal Mail judgment. However, the opinion of the judge of the Valencia court to categorise the defendant’s economic report as a “useless tool”6Valencia Court Judgment 121 signals an even stricter approach towards such expert opinions.
3. Valencia court: economic analysis of the defendants rejected as implausible
The Valencia court emphasises that the defendant has to be clear about the mechanisms underlying the cartel behaviour, especially in cases like the trucks cartel, where the plausibility of an anticompetitive harm is already established.
First, the court reiterates that cartels cause harm unless proven otherwise7Valencia Court Judgment 77 and that this burden of proof falls on the defendants.8Valencia Court Judgment 82 Then, referring to the Royal Mail decision by the CAT, the court points out that the defendants have already admitted that their anticompetitive behaviour led to higher prices9Valencia Court Judgment 97. On this basis, the court finds that the absence of effects of this cartel infringement, as demonstrated by the defendant’s expert, is a “very strange result”.10Valencia Court Judgment 93
Second, the defendant never provided a plausible explanation as to why the cartel existed for fourteen years. There is a complete lack of understanding about the origin, functionality, and economic reasons that can explain the infringement. The judge would expect that the defendant needs to explain the specific information the defendant made available to other infringers, the content of the dialogue with other infringers, the processing of that information, the outcome of the infringement, etc.11Valencia Court Judgment 90 The Valencia court explicitly refers here, again, to the Royal Mail judgment that posed very similar questions. The defendant did not provide an explanation of the rationale for the infringement and, as a consequence, its economic analysis cannot be accepted as an alternative damage estimation.12Valencia Court Judgment 3. (v)
Third, the defendant did not prove that the analysis of the claimant is totally unusable or that the data underlying the claimant’s analysis is fully wrong.13Valencia Court Judgment 2. (v) In the absence of any useful input by the experts of the defendant, the claimant’s damage estimation stands – despite some obvious weaknesses in the analysis.
4. Opinion: CJEU Tráficos Manuel Ferrer and its application by the Valencia Court are a warning to claimants and defendants
After the CJEU ruling in Tráficos Manuel Ferrer, a claimant is not expected to receive damages if the economic estimation behind the claim is not sufficiently plausible and reasonable. Furthermore, a judicial estimation of the anticompetitive harm cannot replace the efforts of the claimant unless it can be shown that it is practically impossible or excessively difficult to obtain a damage estimate. In a similar way it is, for example, established case law in Germany that a judicial estimation of a damage requires at least a sufficient set of facts (‘Anknüpfungstatsachen’) on the basis of which the court can move forward. But full evidence for the scope of damage is however not required, otherwise no estimation would be needed.
At the same time, the Tráficos Manuel Ferrer judgment of the Valencia court highlights that the defendants’ experts have a responsibility to understand the rationale behind an infringement and explain it in court proceedings. An econometric analysis based on a selection of company data showing no cartel effect is not sufficient.
An appeal against the first instance judgment is expected (even by the judge himself14Valencia Court Judgment 125), but so far, the application of the Tráficos Manual Ferrer CJEU ruling on the case that initiated the ruling favours the claimant – mainly due to the inadequate argumentation of the defendants that is not in line with the findings of the European Commission in its binding infringement decision.
By Akos Reger