Germany to Facilitate the Collective Pursuit of Antitrust Damages Claims
In Short
The Development: Recent rulings indicate that it will be easier for cartel victims to pursue their claims in German courts by assigning them to a special purpose vehicle ("SPV"), which then litigates the combined claims as the sole plaintiff against the cartel. Further, the Court of Justice of the European Union ("ECJ") held in a preliminary ruling in January 2025 that EU law precludes German law from nullifying assignments of antitrust damages claims if no alternative mechanism exists and individual claims would not be feasible.
The Context: Historically, German law restricted the collective pursuit of antitrust damages claims via assigning claims to an SPV, which then acted on behalf of the assignors. A number of recent decisions indicate, subject to confirmation by the German Federal Court of Justice ("FCJ"), that this situation will change. In parallel, the ECJ indicated that although national law should allow for the effective enforcement of antitrust damages claims, the design and implementation of the enforcement mechanisms remain within the competence of the Member States.
Looking Ahead: These developments underscore the rapid evolution of private antitrust damages litigation in Europe and, in particular, in Germany. While the final confirmation by the FCJ is still outstanding, these legal developments are likely to increase the amount of mass antitrust damages litigation in Germany.
Background
The German Legal Services Act ("RDG") is designed to ensure that legal services are provided only by qualified individuals and entities. Among other things, it requires entities that are not law firms to obtain a special license before providing collection services. In cases in which cartel victims assigned their claims to an SPV in order to have the SPV pursue these claims on behalf the individual victims, the application of the RDG has given rise to two key legal questions:
- First, does a complaint for antitrust damages claims filed by an SPV registered as a legal service provider, which collects claims on behalf of a large number of different claimants that are not part of the same corporate group (following the assignment of these claims), lead to an inevitable conflict of interest, rendering the assignments invalid?
- Second, is the registered SPV allowed to assess the validity of the alleged claim, especially in stand-alone antitrust cases where no prior binding decision confirms a violation?
German Courts Addressed These Questions in Favor of Plaintiffs
Several German courts have recently decided these legal questions in rulings favorable to SPVs registered as legal service providers, although the decisions on the second issue (whether SPVs are permitted to assess the validity of a claim) have not yet been confirmed by the FCJ.
First, in 2021 and 2022, the FCJ held in two separate decisions that assignment of multiple claims to an SPV does not generate a conflict of interest merely because the SPV's goal is to secure the best possible award for multiple clients. Further, the FCJ held that the RDG does not prohibit an SPV that is registered as a debt collector from bundling multiple assigned damages claims and prosecuting them in a single action. It is important to note, however, that neither decision involved cartel claims, and the FCJ has not yet decided whether these principles apply in that context.
Second, a legislative change of the RDG as of October 2021 expressly allows registered legal service providers to assess claims from a legal perspective for collection purposes. That same legislation provides language stating that, where a legal service provider is obligated to report to a litigation funder, such reporting obligations are not presumed to jeopardize the due provision of legal services.
Third, two German Court of Appeals decisions in 2024—Higher Regional Court of Munich, Judgment of March 28, 2024, case no. 29 U 1319/20 Kart; and Higher Regional Court of Stuttgart, Judgment of August 15, 2024, case no. 2 U 30/22—indicate that the registered legal service provider's qualitative assessment of antitrust damages claims is covered by its collection license under the RDG. The first case concerns a "follow-on" scenario, in which the antitrust violation has already been established. The second case, by contrast, is a "stand-alone" action requiring the plaintiff to prove a violation.
Although the FCJ has not yet issued a final judgment on whether the combined enforcement of antitrust damages claims complies with the RDG, the Higher Regional Court of Munich's 2024 decision in the "follow-on" scenario is currently under review by the FCJ. This presents the FCJ with an opportunity to determine whether its 2021 and 2022 decisions upholding the business model of SPVs bundling apply with equal force to antitrust damages claims.
The ECJ's Guidance
On January 28, 2025, the ECJ issued a preliminary ruling in a case (case C-253/23) involving antitrust damages claims that had been assigned to an SPV registered as a legal service provider. This case involved "stand-alone" claims in which a violation had not yet been established, and had been referred to the ECJ by the Dortmund Regional Court.
In its preliminary ruling, the ECJ held that Directive 2014/104/EU—which governs actions for antitrust damages in the national courts of Member States—does not require Member States to provide mechanisms for collective redress or set conditions for the assignment of antitrust damages claims. As a result, antitrust damages claims remain subject to national procedural law, with Member States free to regulate collective redress and claim assignments, provided such national procedures comply with EU principles.
The ECJ then held that national rules preventing victims from assigning antitrust damages claims to a legal service provider for collective enforcement, in cases without a binding infringement decision by a competition authority, violate the "effectiveness principle" if:
- The national law does not provide any alternative mechanism for bundling individual claims of these injured parties that would be suitable for ensuring the effective enforcement of these damages claims; and
- The pursuit of an individual damages action by these injured parties is, in light of all the circumstances of the specific case, either impossible or excessively difficult, resulting in the denial of their right to effective judicial protection.
As a result, even though EU law does not require Member States to establish procedures for collective redress, in cases where individual antitrust damages actions would be impossible or impracticable, the ECJ's decision allows individual plaintiffs to bundle damages claims via assignment unless national law provides another mechanism for collective enforcement.
Three Key Takeaways
- The recent developments highlight the rapid evolution of private antitrust damages litigation in the European Union and Germany in particular. The developments in Germany suggest an increasing tendency among German courts to recognize legal structures that support the collective pursuit of antitrust damages claims, including litigation financing.
- The ECJ's parallel guidance is likely to support this trend. The question remains how courts in other EU Member States will interpret and apply the ECJ's test in cases involving collective enforcement of antitrust damages claims.
- These developments can be expected to benefit plaintiffs in pursuing collective antitrust damages and lead to an increase in private antitrust damages litigation in Europe.
