In the Netherlands, the developments in the field of cartel damage primarily took place behind the scenes these past six months. Case law was limited to one judgment related to the airfreight cartel. In the summer of 2017 we discussed a judgment passed by the District Court of Amsterdam in one of those cases, in which the judge found that the assignments of the claims to the claiming company were valid. Shortly after that, the same judge found that the claims had been lawfully assigned to the claimant in the other airfreight case as well. An interesting outlook for 2018 is that the Court intends to request the Supreme Court to issue a preliminary ruling on the law by which the claims are governed.
The main developments in the field of follow-on claims occurred abroad. They may also have an impact on Dutch proceedings.
A truckful of dollars
In the most popular countries for cartel damage claims (the United Kingdom, Germany and the Netherlands) several legal actions are now pending as a result of the truck cartel. Those legal actions vary from claims from a single party to collective actions (usually based on the assignment model) in which a large group of companies claims damages from the cartel members.
The first judgment on the merits (as far as we know) related to the truck cartel offers a number of interesting viewpoints regarding the development of those cases. The case in question involved a relatively small claim of the municipality of Göttingen against MAN. During the cartel period, Göttingen purchased a number of fire trucks and garbage trucks from MAN and is now claiming damages in the amount of EUR 335,000. The judgment of 18 December 2017 is food for thought for both parties.
On the one hand, the Landgericht Hannover dismissed part of the claim on the grounds that Göttingen claimed damages in respect of purchases made during a period in which MAN was not a cartel member. On the other hand, a fundamental defence of MAN, the passing-on defence (the argument that the injured party passed on the excess charge to its own customers) failed. MAN argued that Göttingen had passed on the loss to the taxpayer, which would ultimately have to pay anyway. Göttingen itself therefore allegedly did not de facto incur any loss. The German Court rejected that argument because, in its opinion, the passing-on defence applies only if the buyer sells products or services on a market. That does not apply to the municipality of Göttingen. If that ruling is upheld, it will have interesting consequences for claims from central and local authorities; in that case they need not worry about the passing-on defence.
A second point for attention is that the judge addresses the passing-on defence at the start of the proceedings. In many cases that subject is not addressed until the end of the proceedings; once the damages have been determined, it is established how much of the loss was passed on to the buyers. But if it is possible that 100% of the costs were passed on, it may be efficient to bring this subject forward, because in that case the claim most likely will not lead to damages being paid and the parties’ arguments need not be heard. The practical approach of the Landgericht Hannover is laudable, in our opinion. We hope (and expect) to come across such a practical approach more often, now that courts are gaining experience with cartel damage proceedings.
An English judge has furthermore handed down an interesting judgment in one of the cases related to the airfreight cartel. In his judgment of 4 October 2017, Justice Rose significantly reduced the claims of a number of claimants. He decided that the claim could not be allowed insofar as it related to flights to and from the European Union (flights between EU Member States and third countries) that date from before 1 May 2004. The European Commission lacks jurisdiction to apply the competition rules to those flights. The English court decided that Article 101 of the TFEU (the cartel prohibition) did not apply to flights between EU Member States and third countries if those flights took place before 1 May 2004. This was not altered by the entry into force of Regulation 1/2003 (which gave the European Commission the right to apply the cartel prohibition to flights to and from the EU). That legal question will undoubtedly play a part in the short term in the Dutch cases on the airfreight cartel and may significantly impact the scope of the claims filed.
Multilateral interchange fees
The London High Court rendered a judgment in November 2017 in a case concerning retailer Sainsbury’s against Visa related to the fees charged between the banks in the Visa payment network. Those “multilateral interchange fees” have been controversial these past few years, both in civil loss cases and in an administrative law procedure. The High Court found that the interchange fees did not restrict competition and therefore rejected Sainsbury’s claim.
A crucial aspect was that it involved a stand-alone case. Sainsbury’s therefore could not rely on a decision of a competition authority in which breach of (European) competition law was established. It remains difficult to prove breach in a civil setting. However, we identify a clear trend in the Netherlands towards judges being increasingly inclined to investigate whether competition law has been breached. We recently addressed the civil law and administrative law consequences of this trend in Competition Law in Practice.
Scope of the Cartel Damage Directive
A Portuguese judge recently presented a question to the ECJ that may impact Dutch proceedings. In a Portuguese action for damages, the defendants argued that the claims had expired. The question presented itself in the context whether a party can rely on the prescription rules in the Cartel Damage Directive if the implementation period has expired but the proceedings were instituted before that time. The referring judge also presented a number of questions regarding the interpretation of the prescription rules in the Directive. Since prescription in damage cases related to long-term cartels is a controversial issue, the answer to those questions may have a significant impact on the cartel damage practice.
Class Action (Financial Settlement) Act
There have recently been a number of interesting developments in the field of legislation. In the summer of 2017, we addressed the legislative proposal that should make it possible to claim damages in a class action. It is interesting for the cartel damages practice that the legislative proposal was recently supplemented to include a provision on making the judgment binding on foreign injured parties. It is apparent from the explanation of this amendment and from the report that the authorities feared that “the Netherlands will become a Walhalla for filing class actions”. For that reason, the Minister included a provision as a result of which foreign injured parties are not automatically bound by the judgment in a collective action. As a result of that amendment, foreign parties must expressly state that they wish to be bound by the judgment; an opt-in regime therefore applies to them.
But the amended legislative proposal does allow for the possibility of a worldwide opt-out action. At the request of one of the parties, the judge may rule that the opt-out regime also applies to foreign injured parties. The explanatory notes state that this will primarily be the case if the judge rules that an opt-out regime is also in the interest of the party that has not requested application of that regime (for instance because actual and overall finality can be achieved in that manner).
It would now appear that the Netherlands is unlikely to lose its leading position in the field of collective actions in Europe in the near future. The European Commission recently evaluated its recommendation regarding class actions. The conclusion is that little has been done with the recommendations. The Netherlands therefore definitely has possibilities in the years ahead to present itself as a forum on which claimants and defendants can efficiently settle class action claims.