As private enforcement of competition law continues its upward trend potential claimants must consider many factors before deciding to pursue a claim for compensation against their suppliers. EU Directive 2014/104 has contributed to the increased awareness of the right to compensation across Europe and there has been a sharp surge in the number of actions being brought in key jurisdictions such as Germany, the Netherlands and the UK. Many of the recent damage actions are related to the European Trucks Cartel (AT.39824 – Trucks).
To claim or not to claim?
In the past, companies affected by infringements of competition law and more specifically cartels were reluctant to claim damages for a variety of reasons. This situation is now changing. Case law achieved by first movers in the field of private enforcement, such as CDC, provides increasing legal certainty for claimants. The growing awareness among companies of potentially receiving considerable compensation for antitrust violations has enhanced the pressure on directors of companies to fulfil their obligations vis-à-vis shareholders and seriously consider taking actions for damages (business judgment rule).
Questions to consider when bringing a claim
As the legal landscape changes, and antitrust damage actions become more and more the norm it will be important for potential claimants to keep in mind several aspects, inter alia the following:
- Is the necessary funding in place to bring a case to completion (involving lawyers, economists, IT experts, court fees etc.) and to cover adverse costs should they arise?
- Does your company have the required in-house legal and economic expertise to manage a damage action?
- Does your company have access to the market-wide data which are often necessary to robustly quantify a cartel-related damage?
- Where to file a potential claim?
- Who to claim against?
- Is it in the best interest of your company to allocate the significant time and resources to take the claim to court?
- What are the chances of achieving a settlement?
Risk vs reward ratio
Bringing a competition law damage action can be an extremely complex and costly process. Companies considering taking such actions on their own should carefully contemplate whether the reward is worth the overall risk associated with a damage action. The costs relating to lawyers, economists, data analysts, court fees, and funding can be substantial with no guarantee of success.
Many damaged companies choose to outsource the overall quantification and enforcement process to specialists, such as CDC, who usually purchase the claims and enforce them in their own name and at their own costs and risk. That way damaged companies do not incur the expense and time of pursuing the legal action while still obtaining considerable returns upon successful completion of the case.
by Pádraic Burke