Source: https://iclg.com/practice-areas/competition-litigation-laws-and-regulations/4-the-right-to-contribution-among-cartelists-a-progress-report
Timestamp: 2019-04-20 08:52:20+00:00

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While there was no judicial authority on this in the antitrust damages context, it was generally accepted under English tort law that, if multiple entities are responsible for actionable damage (such as losses in the form of increased prices because of a cartel), then a claimant can claim the entirety of the damages from any one of these jointly and severally liable entities.
Under the Civil Liability (Contribution) Act 1978, if two or more parties are liable to a claimant for the same damage they have the right to claim an indemnity or contribution for any damages they are liable to pay.5 The indemnity or contribution can be claimed against another defendant in the proceedings or against a third party.
The right to contribution arises either when a court has ordered a party to pay damages to a claimant or when the party has paid damages under a settlement agreement. The right must generally be exercised within two years of it having arisen.6 In practice, a defendant would normally begin contribution proceedings, under Part 20 of the Civil Procedure Rules, against its fellow cartelists (or alleged cartelists) shortly after a defendant has initiated its damages action.
The Civil Liability (Contribution) Act 1978 entitles the party who has paid damages to obtain a “just and equitable” contribution from another party that is (jointly and severally) liable for the same damage.7 Although it has not been tested in practice, a court would likely consider awarding a contribution that was proportionate to the other party’s contribution to the relevant loss or commensurate to that party’s responsibility for the relevant loss.
Joint and several liability of co-participants in a joint violation of a legal norm giving rise to liability is a long-established principle of Belgian civil law.8 Articles 1213 and 1214 of the Civil Code formally recognise the existence of a right to contribution in case of joint and several liability but Belgian courts limited the scope of these provisions to contractual liability. Nevertheless, the courts agreed that a right of contribution could be claimed in other cases of joint and several liability, based either on the right of subrogation9 or on the general principle against undue enrichment.
The statute of limitation for all extra-contractual liability claims is five years.10 Given that the launch of proceedings against any of the jointly and severally liable parties interrupts the statute of limitations as regards all jointly and severally liable parties,11 there would not seem to be any limitation issue restricting the right to seek contribution, at least when this is based on the right of subrogation to the plaintiff’s rights.
The right of contribution requires determining how much each co-participant has contributed to the damage. This is done by assessing the importance of each participant’s role in the violation, either based on the seriousness of the violation each committed or on the impact each of their actions had on the damages caused. No guidance existed on how this should be applied in the antitrust damages context.
However, both of these ways for co-cartelists to claim contributions from each other were in practice always time-barred.
The direct right to claim contribution was subject to a three-year limitation period.19 Under case-law unrelated to antitrust damages actions, the right to contribution arises when the actions giving rise to the joint and several liability occurred,20 i.e. in cases of cartels when the unlawful activity begins. The standard limitation period commences either at the end of the year in which the owner of the claim (here: the cartel member having contribution claims against its fellow cartelists) obtains knowledge of the circumstances giving rise to the claim and of the identity of the potential defendant, or when the owner of the claim would have obtained such knowledge if he had not shown gross negligence.21 Due to the brevity of the limitation period, this means that, in most cases, the right to contribution would be time-barred long before the first victim initiates damages proceedings against any cartelist, thereby nullifying in practice the right to contribution.
The same is true of the transfer of the rights of the victim to a cartelist who has compensated the victim in full. If a victim sues one of the cartel members only (e.g. the leniency applicant) and not the other cartel members, the limitation period for the plaintiff’s damages claim against the other cartel members continues to run. Bringing an action against one cartelist only suspends the limitation period as regards the particular joint and several debtor that the cartel victim has sued (inter partes effect of an action). When the cartel member who has been sued actually pays the plaintiff and thereby receives the damage claims the plaintiff has against the other cartel members, those claims are practically worthless because the other co-cartelists can raise the objection that the claim is time-barred. This is because, in case of a transfer of claims, the debtor can raise the same objections he was entitled to raise against the previous owner of the claim at the time of the assignment/transfer.22 In other words, the other co-cartelists who were not sued by the original plaintiff can claim that the transferred claim is time-barred against them, which by that time it most probably will be.
From the start, the EU legislator made it clear that the aim of the Antitrust Damages Directive was to introduce a more fair and balanced system that would ensure the protection of the rights of antitrust damages victims to obtain full compensation for their losses, while avoiding the many perceived excesses of the US system.
It would seem clear that the German rules on limitation periods, as they applied to claims in contribution amongst cartelists, render such claims practically impossible, which means that they run contrary to the principle of effectiveness.
The German legislator clearly perceived this issue. The German Act against restraints of competition has been amended to formally include the joint and several liability of co-cartelists and the right of contribution among them. Crucially, a special provision was introduced, whereby the limitation period for a contribution claim shall now only begin at the time of the initial damages payment to the victim.27 This means that the limitation period for the contribution claim now only commences when one of the joint and several debtors pays damages to cartel victims, and not when the cartel is formed as had been the case. Therefore, when a cartelist pays damages it has three years to sue fellow cartelists for contributions.
However, this new provision only applies for claims that arose as from its entry into force, i.e. as from 27 December 2016.
The issue has thus been fixed for the future. To the extent that a similar problem would exist in other EU Member States who have not found a similar legislative solution, cartelists should be able to rely on the EU Antitrust Damages Directive to set aside provisions of national law, such as unreasonably short limitation periods, that would tend to render practically impossible or excessively difficult their right to seek contribution from other cartel participants. Thus, the balance sought by the Directive will be preserved.
While the principle and the exercise of the right to contribution are now set in stone, many questions remain.
The Directive does not contribute to, let alone resolve, the debate on the applicable law for the right to contribution. As regards the apportionment of damages among co-cartelists, it sets the principle that this “shall be determined in the light of the relative responsibility for the harm caused by the infringement”.28 While this principle definitely sets aside any notion that damages may be apportioned equally among all cartelists, it provides no guidance on what criteria should be used to determine each cartelist’s relative responsibility. Public enforcement decisions, based on the concept of participation in a single and continuous infringement, are unlikely to provide much assistance. They may, however, provide some indications as to the degree of involvement of each party in the conduct but, given the enforcers’ reluctance to go very deep into concrete implementation and effects of anticompetitive practices, other arguments and facts will likely have to be taken into account.
In certain respects, the Directive has in fact added more complexity. For example, the concrete implementation of the limits applying to the contribution duty of the immunity applicant and of settling cartelists is likely to give rise to intense debate in the years to come, ensuring that the right to contribution will lead to developing discussions among practitioners and increasing work for the courts.
The author would like to acknowledge the co-authors of this chapter, Cormac O’Daly and Dr. Peter Gey.
Cormac O’Daly is a special counsel in WilmerHale’s London and Brussels offices. He advises on a wide range of EU and UK competition law issues. These include merger control, cartels and related litigation, licensing and other vertical and horizontal agreements, other potentially restrictive practices and alleged abuses of market power. His clients have ranged from software companies, hardware manufacturers, oil and gas producers, companies appealing fines imposed by the European Commission (including Wabco in its 2013 fine reduction of over €200 million and Guardian in its 2014 reduction of over €44 million), companies seeking merger approval, and trade associations. He has litigated cases before the English and EU courts.
Dr. Peter Gey is a special counsel in WilmerHale’s Frankfurt and Brussels offices. His practice focuses on European and German antitrust and competition law, European state aid law and regulation, and litigation before German courts and European Union courts. He has been involved in a number of major private damages litigations in Germany, including the air cargo damages litigation, the most complex case brought so far in Germany.
1. Other reasons include the unpredictability of jury trials, the threat of treble damages and the inability to recover (significant) legal defence costs from the plaintiffs in case of victory at trial.
2. Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349/1 of 5 December 2014.
3. The idea of joint and several liability has long existed in civil law, where it encompasses different concepts such as “solidaire” liability, or liability in totum or in solidum.
4. British Airways v Emerald Supplies Limited & Others, HC-2008-000002. See also the follow-on actions arising from the European Commission’s decisions on the Paraffin Waxes cartel and the Smart Card Chip cartel.
5. Civil Liability (Contribution) Act 1978, Section 1(1).
6. Limitation Act 1980, Section 10.
7. Civil Liability (Contribution) Act 1978, Section 2(1).
8. Belgian Supreme Court (Cour de Cassation), 15 February 1974, Pas., 1975, I, 632.
9. Art. 1251 (3), Belgian Civil Code. Any person who is jointly held to the payment of a debt and who has an interest in paying it, benefits from the automatic transfer of the rights of the debt-holder upon payment of the debt to the latter.
10. Art. 2262bis, Belgian Civil Code. Time starts running from the moment the victim is aware that it has a cause of action, with an absolute limit of 20 years from the actions which caused the damages.
11. Art. 1206, Belgian Civil Code.
12. Art. 6:102 and 6:166, Dutch Civil Code. However, the peculiar wording of the latter provision has led to debate as to its exact scope in the context of antitrust damages actions.
13. Art. 6:102 and 6:101, Dutch Civil Code. Note that Art. 6:166 establishes the different that each co-participant is held to contribute in equal parts to the damages, but this is unless another way of apportioning the damages is justified under the particular circumstances of the case.
14. Art. 3:310, Dutch Civil Code. Time starts running from the moment the victim is aware that it has a cause of action, with an absolute limit of 20 years from the actions which caused the damages.
15. Art. 3:306, Dutch Civil Code.
16. Section 830, German Civil Code.
17. Section 426 (1), German Civil Code.
18. Section 426 (2), German Civil Code.
19. Section 195, German Civil Code.
20. German Federal Court of Justice, Judgment of 8 November 2016, VI ZR 200/15.
21. Section 199 (1), German Civil Code.
22. Sections 412 and 404, German Civil Code.
23. Other examples of the conscious decision to deviate from the US example include enshrining the passing-on defence in the Directive (Art. 12 and 13) and safeguarding the rights of indirect purchasers, who are often the real victims of the behaviour (Art. 12 and 14).
24. Art. 11(1) of the Directive, with conditional limitations for SMEs and the immunity applicant.
25. Art. 11(5) of the Directive, with a limitation on the right to seek contribution from the immunity applicant. In addition, conditional limitations on the right to seek contribution from a co-cartelist who reached a settlement with a victim apply by virtue of Art. 19 (2) and (4) of the Directive.
26. Court of Justice, judgment of 20 September 2001 in Courage v Crehan, case C-453/99, ECLI:EU:C:2001:465, point 29.
27. Section 33h(7), German Act against restraints of competition.
28. Art. 11(5) of the Directive.

References: Art. 1251
 Art. 2262
 Art. 1206
 Art. 6
 Art. 6
 Art. 6
 Art. 3
 Art. 3
 Art. 11
 Art. 11
 Art. 19
 Art. 11