Quantification of cartel damages – first German Court recourses to freehand estimation

By Marcio da Silva Lima

11-2020

The Regional Court of Dortmund is the first German court quantifying a cartel damage claim by estimating the amount of damage on the basis of § 287 of the Code of Civil Procedure of Germany. In contrast to the previous cases, the court quantified the damage amount without consulting time and cost consuming court-approved experts and their reports; an approach, with a potential effect of increasing the effectiveness of future cartel damage proceedings in Germany.

As it is well known, cartel damage proceedings are characterized by an asymmetry of information, which makes it difficult for the plaintiff to prove damages. Beside complex economic questions to be answered in this regard also time and money consuming opinions of competition economists have made cartel damage proceedings less effective. Because of the aforementioned difficulties to quantify damages, there have in the past often only been preliminary decisions on the merits in Germany. And for this reason, it could be questioned whether the EU law principle of the effectiveness of cartel damages enforcement is met.

In its recent decision the Regional Court of Dortmund now estimated for the first time the cartel damage amount and issued a final judgement awarding damages. The Regional Court was presented with a case from the so-called “rail cartel”. Plaintiff was a carrier of the public transport network and the defendants were several companies, which were fined as participants of the rail cartel. The parties both submitted different expert opinions to the Court, which calculated the concrete amount of damage based on different economic models.

For the first time, the Regional Court of Dortmund waived the appointment of a court expert opinion and estimated the damage on the basis of § 287 of the Code of Civil Procedure of Germany. In its decision the Court explains its astonishing approach by stating that the economic methods usually applied within the scope of damage quantification were unsuitable in the concrete case and that therefore the damage may be estimated. In the court’s opinion the "nature, content and scope of the cartel agreement in dispute and the details of its implementation" provide "sufficient factual basis for the estimation of the cartel overcharge, coupled with an overall view of other aspects of the facts".

In estimating the damage, the Regional Court relied on an overall view of the specific facts of the case, such as the long duration of the cartel, the high market coverage of 90 % by the cartel members and the cartel discipline over several years. The Court also considered compensatory damages agreed by the parties in the amount of 15% of the charged cartel prices.

It remains to be seen whether the Higher Regional Court of Düsseldorf and the Federal Supreme Court in higher legal instances will also agree with the Regional Court’s approach. If so, this would potentially speed up cartel damage proceedings and provide victims of cartels with more effective means to obtain redress.

The decision of the Regional Court of Dortmund can be found here (available in German only).

For more information please contact Marcio da Silva Lima.

 
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