Solid evidence or rule of thumb? When courts should estimate cartel damages
In its latest decision on cartel damages, the CJEU gives guidance on damages estimation – and for once issued a decision that will not make life easier for claimants.
Quantifying cartel damages is hardly ever straight forward. It requires establishing how prices, conditions and availability of products would have developed absent the cartel. To establish this counterfactual, claimants rely on economic models and developments in comparable markets. But as the counterfactual remains hypothetical, it cannot be assessed with 100% accuracy. Further, models require data to be solid and data is often not easily available to claimants.
The Cartel Damages Directive aims to address these issues. It requires the disclosure of evidence (Article 5, read more on recent case law on disclosure in our blog post) and allows courts to estimate the amount of harm where it is excessively difficult to come to a robust quantification (Article 17 (1)(2)).
However, the same provisions in the directive mean different things in different EU jurisdictions. This is because national implementing measures differ and the courts’ interpretation is not always consistent. German courts, for instance, have often been conservative when estimating damages. They have tried to avoid it, preferring the plaintiff to come forward with evidence. Spanish courts have been more generous with plaintiffs. They resorted to estimation even when the plaintiff had not done everything possible to provide evidence. If the plaintiff proves that there is damage (and there are presumptions for damages in cartel cases that make this easy), the judges can resort to estimations (see Decision on Appeal nº 63/2021 by the Court of Pontevedra, 2 February 2021). In damages proceedings relating to the trucks cartel, this practice has now given rise to a preliminary ruling from the CJEU.
In its judgment in Tráficos Manuel Ferrer, the CJEU sheds light on the interplay between the disclosure provisions of the Cartel Damages Directive and those on estimating damages.* Quoting Article 17 (1)(2) of the directive, the CJEU emphasises that courts may only estimate the harm if it is practically impossible or excessively difficult to quantify the harm accurately. According to the CJEU, this assessment must take into account all relevant parameters, particularly whether plaintiffs have made use of their right to disclosure or whether defendants voluntarily disclosed evidence. However, the CJEU also considers circumstances such as the ones in the case at hand, where the plaintiffs had significant difficulties in interpreting the documents that were disclosed to them. Furthermore, the CJEU clarified that the existence of an ‘information asymmetry’ is not a condition for estimating the amount of harm, and difficulties with specific quantification of harm may still exist even when parties have equal access to available information.
The conclusions for damages litigation are the following:
- National courts should, when possible, determine the quantum of damages based on evidence, rather than making an estimate. They should not resort to estimations where the claimant has not made any efforts to provide a robust quantification. This involves requesting disclosure of relevant information.
- All other scenarios are left to the courts’ discretion and their evaluation of the disclosure outcome and the circumstances of the individual case.
- We expect that it will not be too long until the CJEU will be called upon to provide more precise guidance, for example on the role of presumptions and expert opinions that the parties may put forward to meet the requirements established in Tráficos Manuel Ferrer.
* The CJEU also dealt with the splitting of costs in cartel damages proceedings, stating that the Cartel Damages Directive does not preclude a national rule according to which, in the event that the claim is upheld in part, costs are to be borne by each party, who therefore bears half of the common costs.