Short Reads

Oberlandesgericht Düsseldorf confirmed that claim vehicle business model was contrary to public morals

Oberlandesgericht Düsseldorf confirmed that claim vehicle business model was contrary to public morals

Oberlandesgericht Düsseldorf confirmed that claim vehicle business model was contrary to public morals

01.04.2015

On 18 February 2015, the German Court of Appeal (Oberlandesgericht Düsseldorf; "OLG Düsseldorf") confirmed that the assignments of claims to claim vehicle ("CDC") in a follow-on action for damages in the cement cartel are void under German law.

It held that the assignments violated German public morals (gute Sitten) as it was foreseeable at the time of the assignments that CDC would not be able to meet a possible future litigation cost order. The financial risks involved in litigation were thus unjustifiably shifted to the defendants [See our March 2015 newsletter article]. The OLG Düsseldorf thereby upheld the judgment of the Landsgericht Düsseldorf of 17 December 2013 [See our January 2014 newsletter article]. The OLG Düsseldorf recently published its judgment in full.

The OLG Düsseldorf held that it is up to the claimant to show that it has sufficient financial means at its disposal at the time of the assignments (sekundären Darlegungslast). In this case, CDC failed to do so. The OLG Düsseldorf rejected CDC's argument that the value of the assigned claims themselves would suffice to cover a possible future litigation cost order. The OLG Düsseldorf confirmed that the relevant moment to assess whether a legal act violates public morals, is the moment the act is performed. Therefore, CDC's statements with regard to its financial position after the assignments took place, were held irrelevant.

Furthermore, the OLG Düsseldorf held that it is not necessary to establish that the parties to the assignments intended to violate public morals. It suffices that they knew of the facts constituting the violation, or that they chose to ignore such facts. In this case, the OLG Düsseldorf held that the shift of the risk involved in litigation was an important purpose of the assignments. It also held that the parties to the assignments knew or should have known and accepted the risk that CDC might have insufficient funding to meet a possible future litigation cost order.

CDC decided not to appeal this judgment by the OLG Düsseldorf, rendering it a final judgment.

The question of the validity of assignments to claim vehicles is at issue in several follow-on proceedings before national courts within the EU. One of them is the paraffin-wax case in the Netherlands. In that case, on 17 December 2014, the District Court of The Hague found that the assignments of damage claims to a different CDC entity were valid under German law. The District Court held that CDC had sufficient funds to meet a possible future litigation cost order at the time of the assignments [See our January 2015 newsletter article].

Team

Related news

24.09.2020 BE law
Stibbe hosts a webinar on dawn raids organised by IBJ/IJE

Seminar - On 24 September 2020, several Stibbe lawyers ​​​​​explain the rights and obligations of companies when confronted with announced or unannounced raids. What do to when, for example, tax authorities, the competition authorities, police services or a bailiff are at your doorstep?

Read more

03.09.2020 NL law
Home, but not alone: Commission may complete dawn raids from home

Short Reads - The European Court of Justice (ECJ) has rejected Nexans’ appeal in the power cables cartel case. The Commission started the dawn raid at Nexans’ premises, but due to lack of time finished the raid at the Commission’s premises in Brussels. The ECJ found that the Commission can copy data and assess its relevance to the investigation at its own premises, while safeguarding companies’ rights of defence.

Read more

03.09.2020 NL law
COVID-19 impacts level and payment of antitrust fines

Short Reads - As well as granting companies leeway on certain COVID-19 initiated collaborations (see our May 2020 newsletter), the coronavirus outbreak has also led competition authorities to take a more lenient stance towards fine calculations and payments. The European Commission has extended the due date for fine payments by an additional three months in response to potential short-term liquidity issues brought about by the pandemic. Similar reasons led the Dutch Trade and Industry Appeal Tribunal to reduce a EUR 1 million cartel fine to just EUR 10,000.

Read more

02.07.2020 NL law
European Commission to pull the strings of foreign subsidies

Short Reads - The European Commission is adding powers to its toolbox to ensure a level playing field between European and foreign(-backed) companies active on the EU market. On top of merger control and Foreign Direct Investment screening obligations, companies may also need to account for future rules allowing scrutiny of subsidies granted by non-EU governments if those subsidies might distort the EU Single Market.

Read more

03.09.2020 NL law
The ACM’s Green Deal: achieving sustainability via competition law?

Short Reads - The ACM has issued draft guidelines on the application of competition law to sustainability agreements. Companies entering into agreements that restrict competition but contribute to governmental sustainability objectives – i.e. lower CO2 emissions – may expect more room for collaboration. The proposed framework would allow these types of agreements if their anti-competitive effects are outweighed by their environmental benefits to society as a whole (rather than to in-market consumers only, as under the existing framework).

Read more