Noerr fends off EUR 600 million antitrust damages lawsuit for DAF
A Noerr team specializing in antitrust damages has successfully fended off a claim for damages against the truck manufacturer DAF before the District Court Munich I. The service provider Financialright Claims, represented by the law firm Hausfeld, had demanded payment of more than 600 million Euro from DAF and other truck manufacturers as compensation for allegedly cartel-related excessive truck prices. Financialright, which specializes in mass proceedings, had had more than 3,200 companies assign to it the corresponding claims from the purchase of more than 84,000 trucks. The court followed Noerr's argumentation and considered the assignments to be null and void due to a violation of the German Legal Services Act (RDG).
Exceeding the statutory limits of debt collection authorisation
The court justified its decision by stating that from the outset Financialright's offer was not aimed at providing out-of-court legal services, but exclusively at initiating a class action lawsuit. In this respect, its service offering went beyond debt collection within the meaning of the RDG and was therefore not covered by the plaintiff's debt collection authorisation.
Conflicts of interest through claim bundling and litigation financing
Furthermore, in the court's view, Financialright's business model leads to conflicts of interest which jeopardise the proper provision of legal services. For example, in settlement negotiations, the interests of assignors with promising claims and those with low chances of success could mutually impede each other if all claims are collected in a pool. The court also takes a critical view of the litigation funding by Burford Capital and its interest in a success fee of around 33%. The court fears that Financialright is too financially dependent on Burford Capital as litigation funder and that therefore primarily its interests will be taken into account in the conduct of the case, but not the interests of the truck purchasers that have assigned their claims.
Class action impairs efficient judicial enforcement
Finally, the bundling of the claims of more than 3,200 companies does not bring any efficiency advantages. The bundling of the more than 84,000 individual claims would rather impair their efficient judicial enforcement. The assignment model complicates the proceedings since it raises additional complex legal issues and therefore results in longer proceedings. Difficulties of a factual and legal nature in individual assignments thus work to the detriment of all assignors.
Noerr represents DAF in all proceedings brought before German courts concerning claims for antitrust damages arising out of the so-called “truck cartel” and the procurement of DAF trucks. The judgment (case no. 37 O 18934/17) is not yet final. Financialright has already announced publicly that it will appeal.
Noerr was a pioneer in the field of cartel damage claims and is acting today, in addition to the “truck cartel”, in almost all significant antitrust damage complexes. With its specialized team of antitrust and litigation experts in their respective practice groups, Noerr has for years successfully defended clients against claims brought in the wake of cartel proceedings, advised also on the plaintiff side in the successful assertion of claims, and is thus recognized as one of the leading practices for antitrust damage claims. Noerr develops projects for the structured analysis, defense and enforcement of antitrust damage claims and represents clients in and out of court.
Do you have any questions? Please contact: Dr. Fabian Badtke, Meike von Levetzow, Dr. Henner Schläfke, Peter Stauber
Practice Groupe: Antitrust, Litigation, Arbitration & ADR