ICN | The interplay between private enforcement and leniency policy

1. ICN | The interplay between private enforcement and leniency policy Jolling de Pree

2. Introduction • Contribution to development of private litigation in Europe by: • case law of the European Courts in Luxembourg • pro-active marketing by claimants' lawyers and litigation funders • England, Germany and the Netherlands most popular jurisdictions • Directive 2014/104/EU aims to ensure that cartel victims can effectively exercise their rights to claim cartel damages in all EU Member State courts and that this will not negatively affect public enforcement (leniency programmes) • Observations on jurisdiction, access to evidence, joint and several liability and calculation of damages

3. Jurisdiction, governing law and enforceability • Wide opportunities for forum shopping by use of anchor defendants • e.g., Chinese companies filing claims in England and the Netherlands for alleged overcharges against an international cartel mainly operating in Asia • National rules of the 28 EU Member States govern actions for damages: • Rules of procedure – laws of the competent court • Material issues (illegality of the cartel, binding effect of decision of competition authority, entitlement to compensation, burden of proof) to be decided under law applicable to the claim (lex loci delicti) • e.g., claim of Chinese companies may be governed by Chinese law, applied by the competent court of the EU Member State • Judgments of EU courts are to be recognised in the other EU countries (Council Regulation (EC) No 44/2001), but enforcement not always easy

4. Access to evidence | Disclosure • Access to evidence is part of procedural law (i.e., country of the competent court) • Different levels of access to evidence in different Member States as a result of: • different legal rules • different legal cultures • Legal battles on access to confidential Commission decisions and leniency materials (e.g., Airfreight, Elevators) • e.g., European Commission as party as claimant in private litigation requesting disclosure of the EC decision • EU Directive aims to ensure access to evidence for claimants and defendants but rules are rather vague • wide discretion to Member States (different legal rules) and national courts (legal culture)

5. Joint and several liability • Most Member State laws recognise that cartel members are jointly and severally liable for damages • Many unresolved issues, such as: • liability of the parent company • liability of company that had more limited participation in the cartel (duration or scope) • right to obtain a contribution from other co-infringers; how to be determined: pro rata or based on sales, market share, relative culpability? • EU Directive (Article 11): • confirms joint and several liability for co-infringers • excludes certain small or medium-sized enterprises (SMEs) from joint and several liability • limits scope of joint and several liability for immunity applicants

6. Damages • Direct and indirect claimants have filed damage claims in EU Member States courts (Article 12 EU Directive confirms their claim) • European Court of Justice in Luxembourg: umbrella damages cannot be categorically excluded (2014, Kone) • Normally claimants need to prove damages; defendants bear burden to prove passing-on (Article 13 EU Directive) • Limited case law on methods to calculate damages • Netherlands court awarded damages based on a during and after analysis and denied passing-on defence in TenneT / ABB(2015) • Article 17 EU Directive: it shall be presumed that cartel infringements cause harm. The infringer shall have the right to rebut that presumption.

7. Settlements • Multiple defendants and the right to claim contribution from co-conspirators make settlements difficult • Dutch solutions: • Article 6:14 Dutch Civil Code: the claimant can release a settling infringer from its obligation to contribute towards other infringers by undertaking towards the remaining infringers to reduce its claim by the amount that could have been claimed as contribution from the settling infringer • International collective settlement declared binding on an "opt out" basis in the Converiumjudgment (2012); in principle to be recognised in EU Member States • Article 19 EU Directive: the claim of the settling injured party is reduced by the settling co-infringer's share of the harm that the infringement of competition law inflicted on the injured party

8. Conclusion • Cartel damage litigation is a fast-growing and complex area of commercial litigation in Europe • EU Directive will most likely contribute to the further development of this field of law • …… but at the same time leaves many issues unresolved • Member State courts will need to provide clarity on these unresolved issues

9. Thank you • Jolling de Pree