News Update Competition Litigation

On  16 February 2023, the Court of Justice of the EU (CJEU) issued a preliminary ruling in Tráficos Manuel Ferrer on the allocation of legal costs and the estimation of harm in antitrust damages actions (C-312/21). In two previous rulings, PACCAR (C-163/21) and RegioJet (C-57/21), the CJEU decided on the scope and timing of disclosure in those actions. Rick Cornelissen and Albert Knigge briefly discuss these rulings.

Legal costs allocation and damage estimation (Tráficos Manuel Ferrer)

Two Spanish undertakings claim to have been overcharged when purchasing trucks from various manufacturers because of an infringement of Article 101 of the Treaty on the Functioning of the European Union (TFEU) (Commission Decision C(2016) 4673 final in Trucks). They therefore initiated damages proceedings against Daimler in 2019. Both claimants and the defendant submitted economic expert reports on the quantification of alleged harm and Daimler also granted the claimants access to the data that were used for its econometric analysis. The Spanish court of first instance referred questions to the CJEU about the allocation of legal costs and the possibility of damage estimation under Article 17(1) of Directive 2014/104/EU ("Damages Directive").

The first preliminary question concerned the issue whether EU law precludes a Spanish rule of civil procedure pursuant to which claimants must bear not only their own, but also half of the common costs of the antitrust damages proceedings if their claims are partly awarded. The CJEU assessed this question in the light of the principle of effectiveness and the need for private enforcement as a remedy for the direct damage as well as the indirect harm to the structure of the market. The CJEU pointed out that the Damages Directive provides three measures to remedy the information asymmetry that may be present in private enforcement cases to the detriment of the claimant: (i) the parties' right to request disclosure (Article 5), (ii) the presumption of harm (Article 17(2)) and (iii) the possibility for national courts to estimate the damage if it is established that harm is done but precise quantification on the basis of the available evidence is practically impossible or excessively difficult (Article 17(1)). The CJEU ruled that, as these measures can restore the possible imbalance between the parties, the Spanish costs allocation rule is compatible with the principle of effectiveness, provided that the origin of the common costs is to be attributed to the claimant.

The referring Spanish court also wanted to know if it could estimate the damage under Article 17(1) if (i) the claimants had access to the data on which the defendant's economic expert report was based and (ii) the damages claim was only directed to one of the truck manufacturers as addressed in the Commission Decision. The CJEU found that these two circumstances are not, in themselves, relevant for the national court when assessing whether it can proceed to estimate the damage. However, the CJEU ruled that damage estimation is based on the premise that (i) the existence of damage has been established and (ii) it is practically impossible or excessively difficult to quantify it with precision, e.g. due to "particularly significant difficulties" in the interpretation of documents relevant for the determination of the proportion of the passing on of overcharge. To that end, the national court must consider all parameters, and "in particular, the unsuccessful nature of steps such as the request to disclose evidence". 

The findings of the CJEU on this point correspond to the principles for the determination of damage under Dutch law, pursuant to which damage estimation is the exception to the rule that damage must be determined as concretely as possible.

Ex novo evidence (PACCAR)

The applicants in other Spanish damages proceedings that led to the preliminary ruling in PACCAR also claim to have been overcharged when purchasing trucks from – in this case – PACCAR and DAF. To substantiate their claim, they requested the court for access to evidence held by the defendants. This evidence did not yet exist in the requested form; the defendants would have to compile and classify the data according to the parameters defined by the purchasers. The key question was whether creating documents ex novo is compatible with the first subparagraph of Article 5(1) of the Damages Directive. This provision allows the court to "order the defendant or a third party to disclose relevant evidence which lies in their control." The wording seems to suggest that the requested documents must already exist, the referring court said.

The CJEU first decided on the temporal applicability of Article 5 of the Damages Directive, concluding that Article 5 is a non-substantive provision covered by Article 22(2) of that Directive. Accordingly, as the main proceedings were brought after the adoption of the Damages Directive and its transposition into Spanish law, Article 5 and the Spanish implementation act apply in this case.

The CJEU then decided that the first subparagraph of Article 5(1) of the Damages Directive not only refers to pre-existing documents, but also includes disclosure of evidence that the addressed party "must create ex novo by compiling or classifying information, knowledge or data in its possession." The CJEU stressed that the national court should restrict the access to documents "to that which is relevant, proportionate and necessary" and that it should consider "the legitimate interests and fundamental rights" of the disclosing party (cf. Article 5(2) and 5(3) of the Damages Directive). The court must thus prevent the claimant from "information fishing". Also, the order to create evidence ex novo must not present an excessive burden on the addressed party in terms of costs or workload. It follows from these considerations that the right to disclosure is limited and must be assessed on a case-by-case basis.

This judgment affects the way the Dutch civil courts must interpret the disclosure provisions in the Dutch Code of Civil Procedure in antitrust damages cases. It was generally assumed that a party can request access to pre-existing documents only. However, in antitrust damages cases, the court can now order a party to disclose information that must be included in newly created documents, albeit upon request from the claimant and under certain conditions.

Scope and timing of disclosure (RegioJet)

In 2012, the Czech competition authority started administrative proceedings relating to possible abuse of a dominant position by České dráhy, the Czech national railway carrier. These proceedings were stayed in 2016, because the Commission had initiated formal investigation proceedings on the same conduct. Meanwhile, RegioJet, a competing company, had brought a claim against České dráhy for compensation of the damage caused by the alleged anti-competitive behaviour.

In 2017, RegioJet requested disclosure of documents in possession of České dráhy for the purpose of the damages proceedings on the merits. These documents contained information České dráhy had prepared specifically for the Czech competition authority proceedings and information that had been required outside of those proceedings. The court ordered disclosure of the documents in question and stayed the damages proceedings awaiting the closure of the Commission investigation proceedings. The appellate court upheld the disclosure order but took measures to protect the evidence disclosed. In the subsequent Supreme Court proceedings, the Czech Supreme Court referred questions to the CJEU for a preliminary ruling on the possibility of ordering disclosure for the purpose of damages proceedings while Commission proceedings are pending and the damages proceedings are therefore stayed.

These questions concern Articles 5 and 6 of the Damages Directive, which deal with the disclosure of evidence. While Article 5 contains general rules on the subject, Article 6 contains specific rules, including as regards evidence in the file of a competition authority. Article 6(5) sums up the information that can only be disclosed after a competition authority has closed its proceedings by adopting a decision or otherwise ('grey list' evidence).

With reference to PACCAR, the CJEU first determined the temporal applicability of Article 5 and 6 of the Directive, holding that they are procedural provisions that fall within the scope of Article 22(2) of the Damages Directive. In short, the CJEU concluded that Articles 5 and 6 apply to the damages proceedings.

The CJEU went on to clarify that national courts can order disclosure of evidence for the purpose of damages proceedings, even if these damages proceedings are stayed awaiting the outcome of Commission investigation proceedings. However, the disclosure must be limited to what is strictly relevant, proportionate and necessary in the light of the damages claim brought and must not unduly interfere with an ongoing investigation by a competition authority (cf. Article 5 and 6 of the Directive). These findings generally correspond to Dutch practice, in which not only disclosure proceedings, but also damages proceedings on the merits, often continue on topics of which the assessment does not depend on the outcome of Commission investigations.

Subsequently, the CJEU ruled on the applicability of Article 6(5)(a) of the Damages Directive. Under this provision, evidence on the grey list includes information prepared specifically for competition authority proceedings. The CJEU decided that this information cannot be disclosed while the competition authority's proceedings are stayed, because staying the proceedings is not the same as closing them by adopting a decision or otherwise, and they must be closed before disclosure can take place under this provision.

Furthermore, the CJEU found that the scope of the specifically prepared information is not wide enough to include all information submitted in the competition authority's proceedings, whether voluntarily or at the request of the competition authority. On the other hand, national courts must ensure that the scope of grey list information is not interpreted too narrowly. The CJEU therefore added in analogy with Article 6(7) of the Damages Directive that national courts may carry out an assessment to verify whether the evidence requested falls within the grey list, if that is possible under national law. The CJEU stressed that the assessment must comply with the principle of proportionality as laid down in Article 5(3) and 6(4) of the Damages Directive. Also, the court must ensure that the claimant, third parties and their representatives do not have access to the submitted evidence during the assessment. 

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