German Federal Court of Justice delivers first ruling on the Trucks cartel

In a decision of 23 September 2020, published early January 2021, the German Federal Court of Justice ("BGH") rejected a follow-on damages claim filed against Daimler in relation to the European Commission's ("Commission") Trucks decision.  This is the first time that the highest German civil court has ruled on a damages claim arising from the Trucks proceedings and it is not expected to be the last.

Background

In 2016, the Commission fined truck manufacturers Volvo/Renault, Daimler, Iveco, and DAF a total of approximately EUR 3 billion, whilst MAN received immunity from fines following a leniency application.  There are now hundreds of damages claims following the Trucks decision pending before German courts.  The decision of the BGH of 23 September 2020 is the first decision of the highest German civil court in respect of these claims.

In the case at hand, a construction company claimed damages against Daimler for overcharges paid for 11 specially and individually configured trucks.  While the lower first and appeal instance courts generally granted damages for these claims (without deciding on the amount), the BGH rejected the reasoning of the lower courts and referred the case back for a re-assessment.

The BGH's judgment

In its ruling, the BGH confirmed and clarified various aspects that will be important for future damage claims, especially in the context of claims arising from the Trucks decision:

• As to the nature of the cartel, the BGH found that the courts are bound by the factual findings of the Commission establishing the competition law infringement, including facts established in settlement decisions imposing fines. As the Commission had established the conduct at question as price coordination, the BGH found that German courts are bound by this finding. Therefore, it was incorrect for some lower courts to classify the behaviour as a mere information exchange and to ignore the extensive coordination between the cartelists.
• As to the product scope of the cartel, the BGH confirmed that there were no indications why the individually configured vehicles in question should be classified as "special vehicles" that were not subject to the impact of the cartel. Rather, generally speaking, as long as the vehicles – as in the case at hand – are based on the basic models whose list prices were the subject of collusion, they are generally impacted by the cartel.
• The BGH also confirmed that claimants were affected by the cartel if they purchased trucks from a cartelist that falls within the product, geographic and temporal scope of the cartel. It is not necessary to establish whether, and to what extent, transaction prices for specific, individualised vehicles were influenced by the collusive practices.

As regards the question of whether or not to award damages, the BGH emphasised the importance of correctly and comprehensively assessing and weighing all of the facts of the case and confirmed the burden of proof to demonstrate damages remains with the claimant, and may not be reversed onto the defendant:

• As a preliminary observation, the BGH affirmed its ruling in the context of the rail track cartel that there is no prima facie evidence of damages suffered by a claimant as a result of a cartel (file no. KZR 26/17; see our March 2019 newsletter). Rather, the courts must comprehensively assess all of the facts and circumstances of the case, including the representations made by the parties concerned.
• However, and in line with the rail track cartel ruling, the claimant can rely on an actual presumption that, as a result of the cartel, the price level was on average higher than in absence of the cartel. The fact that the cartelists in Trucks had agreed "only" on list prices (and not transaction prices) does not jeopardize the actual presumption of a price increase.
• Nevertheless, the courts shall grant damages only if they are convinced that damages have occurred, having considering all of the facts and circumstances of the individual case. If doubts remain, damages shall not be awarded. In this context, the BGH held that it is not necessary for the defendant to demonstrate that there are no damages; it is sufficient for the defendant to present and, if necessary, prove the facts that are capable of calling into question the existence of damages and, for that purpose, weak indications shall suffice.
• The BGH concluded that the burden of proof to show damages remains with the claimant and it would be incorrect to allocate that burden onto the defendant.

In the case at hand the BGH found that the appeal court did not sufficiently assess the arguments presented by Daimler on the cartel's impact on prices and on the degree of competition between the cartelists.  The wording of the appeal court's judgment also suggested that Daimler could only succeed with its arguments if it provided clear evidence against the existence of an overcharge.  In light of this, the BGH held that the appeal court had incorrectly reversed the burden of proof and required Daimler to demonstrate that there were no damages. 

On account of this error in law, the BGH rejected the decision of the appeal court and referred the case back for re-assessment. 

Comment

The BGH's judgment confirms that the burden of proof for the establishing damages rests with the claimant and courts need to comprehensively assess all of the facts and circumstances on a case-by-case basis.  It still remains to be seen how the lower courts and claimants will interpret the ruling of the BGH in future cases, particularly against a background where – for claims that have arisen after 26 December 2016 – the legislator has introduced a legal presumption that a cartel gives rise to damages.