In July 2021 the cartel damages community paid close attention to a ground-breaking ruling of the Federal Court of Justice (FCJ, case reference number: II ZR 84/20): after some lower courts had previously held cartel damages assignments to be invalid where the SPV was a legal services provider, the FCJ decided – in a non-cartel damages context – that, in general, the bundled enforcement of claims by an SPV is not contrary to German law. This FCJ judgement, albeit rendered in an insolvency law context, was widely considered to impact numerous other mass claims scenarios – especially cartel damages claims.

January 2022 then brought two judgements of the Regional Court of Stuttgart, which evidenced that the legal situation is however still uncertain when it comes to cartel damages claims (case reference numbers: 30 O 176/19 and 53 O 260/21). The Regional Court of Stuttgart found the assignments of cartel damages claims to a legal services provider to be once again invalid. The court refers on the one hand – and in fairly general terms – to the scope and complexity of the factual and legal issues in cartel damages cases. According to the court they exceed the level of difficulty typical and acceptable for commercial debt collection services. On the other hand the court found that cartel damages scenarios specifically lend themselves to create conflicts of interest irreconcilable with an assignment to a debt collection legal services provider – especially regarding the often raised passing-on-defence.

Despite the seemingly strong judgement by the FCJ regarding the bundling and asserting of assigned claims in an insolvency context, the recent decisions out of Stuttgart, again, create uncertainty for the bundling of cartel damages claims. It remains to be seen how the higher courts – and ultimately the FCJ – will deal with this important issue going forward.

Update: Unrelated to the decisions of the Regional Court of Stuttgart, the FCJ in June once again explicitly took a view on the admissibility of the bundled enforcement of claims by an SPV and once again strengthened the assignment model – albeit again in a general context without reference to antitrust law (case reference number: VIa ZR 418/21). In particular, the FCJ clarified that neither the different chances of success of the individual claims of the assignors nor the financing by an external litigation funder constitute a conflict of interest – a clear indication on the FCJ’s fundamental position in this debate.

At the same time, the Regional court of Dortmund came up with a new approach: In a judgement of June 2022(case reference number: 8 O 7/20 (Kart)), the court differentiated between follow-on and stand-alone claims when it assessed the admissibility of the bundled assertion of cartel damages claims by legal services providers. As to the Dortmund court, the enforcement of stand-alone claims exceeded the competences granted to legal services providers within the Legal Services Act. Consequently, the Dortmund court found the respective assignments might be void and the action therefore without merit.

Also new in this proceeding was the claimant's objection that such view violated the European law principle of ‘effet utile’. According to that principle, the procedural means to enforce individual EU-rights, in particular must not be practically impossible or excessively complicate pursuing the rights conferred by EU law. The court to some extent agreed with the claimant and stated that there are no equally suitable and admissible alternatives to the assignment model in Germany. Therefore, the court considered a referral to the European Court of Justice in light of potential ‘effet utile’ violations.

Authored by Carolin Marx, Simon Ingenbleek, and Hannah Fries.