Limitation Period

Importance of limitation periods

In its White Paper the European Commission points out that limitation periods play an important role in providing legal certainty, but they can also be a considerable obstacle to the enforcement of cartel-related damage claims. Much depends on the duration of relevant limitation periods, the moment they begin to run, and the way in which way they will be suspended

Guidelines of EU law

The concerns of the Commission do not apply to all EU Member States. The Commission’s Green Paper has already observed a considerable diversity between the Member States rules concerning limitation periods, in particular as regards their respective duration and starting point.

In any event, national limitation periods are subject to the directly applicable principles of EU law. In this respect, the Court of Justice of the European Union held in its Manfredi judgment that, in the absence of unified rules governing the matter, it is for the domestic legal system of each Member State to lay down detailed rules – including limitation periods – governing actions for the enforcement damage claims which are directly established under EU law. But in the practical application of national rules on limitation periods, the EU law principles of equivalence and effectiveness must be observed [Cases C-295/04 to C-298/04, para 77]. It follows that limitation periods may not render practically impossible or excessively difficult the exercise of the right to compensation for cartel-related damages suffered. The Court of Justice in particular held that ‘[a] national rule under which the limitation period begins to run from the day on which the agreement or concerted practice was adopted could make it practically impossible to exercise the right to seek compensation for the harm caused by that prohibited agreement or practice, particularly if that national rule also imposes a short limitation period which is not capable of being suspended’ [ibid., para 78].

According to the Commission, it would not be compatible with EU law that a national limitation period starts to run before the victim of the infringement can reasonably be expected to have knowledge of the infringement and of the damage caused. Besides, the duration of a limitation period shall not be so short that it will render the right to compensation practically impossible or excessively difficult. In the case of follow-on damage actions, a new limitation period shall start once the infringement decision on which a follow-on claimant relies has become final. Claimants would otherwise be deprived of their fundamental right to effective compensation.

Correspondingly, the German Act against Restraints of Competition, for example, explicitly stipulates that limitation periods applicable on antitrust damage claims shall be suspended if proceedings are initiated by the German competition authority as regards the infringement, or by the Commission or the competition authority of another Member State as regards an infringement of Article 101 TFEU. In Italy, the Court of Cassation [No. 2305/2007] clarified that the limitation period for antitrust damages does not begin to run before the injured party becomes aware, or reasonably should have become aware, of both the damage and its unlawful nature, that is, before the injured party becomes aware that the damage was caused by an antitrust infringement.

Effective preparation of damage claims

Any cartel victim should have a realistic possibility of gathering the required evidence and preparing its antitrust damage claim. It is important to take into account in this respect that a sufficient damage calculation requires an in-depth analysis of the market concerned and the individual damage sustained, a task which is very time-consuming. In CDC’s experience, the collection and analysis of evidence such as invoices on the purchase of cartelised products and services takes considerable time, in particular with regard to long-lasting cartels. In this respect, highest accuracy is required in order to prepare a damage action with reasonable chances of success. This also prevents unmeritorious claims and thus serves the interests of potential defendants as well.

Furthermore, it must be borne in mind that ‘hardcore cartels’, the most damaging antitrust infringements, usually remain covert during and after their duration. If limitation periods start running while the infringement has not yet been discovered, damage claims could become time-barred before the claim is noticed by the victim. This is incompatible with the effectiveness principle as formulated by the Court of Justice of the European Union.

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