Contributed By Hogan Lovells International LLP
Before the implementation of Directive 2014/104/EU on Antitrust Damages Actions (the Directive), some relevant case law had already been developed by the Spanish Supreme Court on many of the legal issues that have now been regulated by the domestic legislation implementing the Directive. This includes such issues as the joint and several liability of infringers, the availability of the passing-on defence and the burden of proof in respect of such defence being on the defendant, etc.
However, the growth of antitrust litigation in Spain was prompted by the approval of the Directive and its implementation in May 2017.
For obvious reasons (its European-wide reach, the number of affected companies/individuals, the total amount of the damages, etc), the most relevant recent antitrust actions have been filed in connection with the so-called Trucks cartel (Decision of the European Commission of 19 July 2016, Case AT.39824 – Trucks). However, many other claims have been brought in connection with different cartels and, more generally, with antitrust infringements.
For example, there have been more than a dozen judicial proceedings regarding the so-called Envelopes cartel (Decision of the – now extinct – Comisión Nacional de Competencia of 25 March 2013, Case S/0316/10, Sobres de Papel), as well as a number of actions relating to the decision by the Spanish National Competition Authority in the so-called Automobiles manufacturers cartel (Decision of the CNMC of 23 July 2015, Case S/0482/13, Fabricantes de Automóviles), the Manufacturers and distributors of low and medium voltage electrical cables cartel (Decision of the European Commission of 2 April 2014, Case AT.39610 – Power Cables), and/or the Decennial insurance cartel (Decision of the – now extinct – Comisión Nacional de Competencia of 12 November 2009, Case S/0037/08, Compañías Seguro Decenal).
Decisions have started to be steadily issued in connection with the above cases.
Review of the existing decisions on cartel cases leads to the conclusion that the judgments issued by different courts are inconsistent and contradictory with each other in a number of both procedural and material aspects.
The situation should become clearer in the near future, however, as the provincial courts and, subsequently, the Supreme Court, come to issue decisions on the existing cases and homogenise the interpretation of the domestic regulations implementing the Directive.
As stated above, there is currently a certain degree of discrepancy between the existing judicial decisions on antitrust litigation.
The paradigmatic Trucks cartel may be used to illustrate the situation, as among the approximately 30 decisions issued by different commercial courts to date, 14 cases were fully dismissed, 15 were partially upheld and only one was fully upheld. Among the dismissal decisions, two were due to lack of proof of the damages suffered while at least four other cases were rejected due to the lack of legal standing of the defendants. In six other cases, the statute of limitations was applied and the actions were declared time-barred.
Among the cases partially upheld, in 12 cases the claimants were awarded compensation equivalent to 5% of the price paid, one was awarded 10% compensation and another claimant 15% compensation.
Regarding the Envelopes cartel, several commercial courts of Barcelona (applying the previous case law of the Supreme Court in the Sugar cartel case, which was decided before the implementation of the Directive) stated that in cartel scenarios the presumption of harm is applicable and allows the judge to reverse the burden of proof against the cartelists, provided always that the claimants submit to the court a feasible and reasonable calculation of damages through a hypothetical counter-factual scenario (a hypothetical analysis of a market unaffected by the existence of a cartel). Based on this argument, the commercial courts of Barcelona generally upheld the claims filed.
Other cases relating to the same Envelopes cartel have gone the other way, with the commercial courts of Madrid disregarding the expert reports of the claimants on the basis that in market-sharing conduct there is necessarily an agreement on the level of prices to be charged to final customers, and since the expert report lacked such evidence, damages were not proven.
The Spanish Act on Defence of Competition (the Act 15/2007 of 3 July 2007 on Defence of Competition – ADC) was amended in May 2017 to adapt it to the provisions of the Directive.
Article 71 of the ADC provides that infringers of competition regulations shall be liable for loss caused, and Article 72 recognises the right of those harmed by practices restricting competition to claim damages in respect of loss suffered from the infringer to obtain full compensation.
Claims for damages (normally in the form of extra costs actually borne) can be brought both by direct or indirect purchasers.
Full compensation means the award of damages in respect of all loss suffered, including loss of profits and corresponding interest. Overcompensation by means of punitive or multiple damages or other forms of compensation is expressly forbidden.
Both follow-on and standalone claims are available.
On the one hand, Article 75 of the ADC expressly provides for the effect of final decisions of the antitrust authority or judgments of judicial bodies on competition law infringements in damages actions (follow-on claims). On the other hand, standalone claims are also available, since parties who allege that they have suffered loss can bring actions for damages before the commercial courts without the National Competition Authority having previously ruled on the existence of an infringement.
Further to Article 72.1 of the ADC and Article 86ter.2 of the Organic Law of the Judiciary, commercial courts have jurisdiction to hear all cases regarding antitrust damage claims.
Commercial courts are the specialised courts created in Spain to handle, inter alia, corporate claims, insolvency issues and antitrust damage claims, and formally belong to the civil jurisdiction.
The competent commercial court would be that located where the defendant is domiciled. Should a case be (wrongly) submitted to the commercial court of another city, any other party may challenge the jurisdiction and, should the opposition be upheld, the case would be transferred to the appropriate court.
Pursuant to Article 75 of the ADC, a final and binding decision finding the existence of an infringement of competition regulations either by the National Competition Authority (the NCA) or by Spanish courts is not rebuttable for the purposes of a damages claim. Consequently, in such cases, claimants are not obliged to prove the existence – or extent of – an infringement, as they may rely on the final and binding decision of the NCA.
A final and binding finding of an infringement of competition regulations by competition authorities or by the courts of another member state shall be a rebuttable presumption as to the existence of the infringement. Therefore, defendants may still try to prove that there was no infringement of antitrust regulations, although in practice this is a rather difficult task.
According to Article 15bis of the Spanish Act on Civil Procedure, the NCA may intervene in damages actions, either on its own initiative or at the request of a judicial body. Such intervention may include the filing of information or written comments on questions concerning the application of Articles 101 and/or 102 of the Treaty of the Functioning of the European Union, or Articles 1 and/or 2 of the ADC. However, in practice, the Spanish NCA has generally declined to participate in private damages claims.
As stated in Articles 76 and 78 of the ADC, the claimants bear the burden of proof regarding damages claimed, and the defendants bear the burden of proof regarding the 'pass-on' defence (except in the case of claims by indirect purchasers).
However, the burden of the claimants is substantially relaxed because:
Courts are increasingly using this power to estimate damages, especially in cases of unsophisticated claimants that have not complied with the general rule of burden of proof.
The ADC also provides that the NCA may inform the courts about the criteria for quantifying damages, although in practice it generally rejects any such invitations.
According to case law from both the Spanish Supreme and Constitutional Courts (an approach also endorsed by the majority of prominent civil law scholars), the applicable standard of proof in civil actions is the balance of probabilities applicable in US civil cases.
Facts can also be proven on the basis of presumption. Under this approach, an uncertain fact can be taken, or can be assumed, to be true if it can be established that there is a link between it and the existence of another, certain fact. In order to arrive at a judicial presumption, the court must consider that a clear and direct link exists between the uncertain fact and the true fact, and must clearly explain its reasoning in the judgment.
Section 79 of the ADC regulates the right of indirect purchasers to claim compensation for damages suffered as a result of the direct purchasers having passed on to them additional costs caused by the infringement of competition law.
The claimant (ie, the indirect purchaser) shall bear the burden of proving the existence of pass-on from the direct purchaser and the concrete amount passed on. To that end, the indirect purchaser would also be entitled to request the provision of evidence from the defendant or from any other third party.
In order to relax the burden of proof, there is an express rebuttable presumption that loss was actually suffered by the indirect purchaser if it can be proved that:
The duration of the proceedings varies depending on the court handling the case.
There are commercial courts in all the provinces of Spain (located in the main cities) and, depending on the size of the city, there can be several commercial courts in the same city. For instance, Madrid has 14 different commercial courts while Barcelona has 11.
Each court has a different workload and therefore different average timings to issue final decisions. Some courts are able to determine a case in around a year, whereas other courts may take two years or more.
According to official data, in 2017 the average duration of a procedure before a commercial court of Madrid was 19.2 months, meaning that the same case could last a year in one court or up to two years in a different one.
Suspension of Proceedings
By definition, in follow-on cases, suspension of the proceedings is not possible, as there is already a previous final and binding decision by the NCA. Conversely, in standalone actions, suspension of the civil proceedings until the NCA issues a decision on the existence of an infringement can be requested.
The judge hearing the civil proceedings will decide on the appropriateness of the stay or suspension and, if granted, proceedings will be suspended and the claimant will be able to rely on the final decision of the NCA. If a suspension is denied, however, the claimant would need to prove the existence of an infringement without relying on the decision of the NCA, which would substantially complicate the action and potentially hinder its prospects of success.
In other words, the aim of the suspension of proceedings would be:
Generally speaking, class actions are only available in Spain for consumer associations. Spanish regulations divide class actions between actions to protect collective interests and actions for the protection of diffuse interests.
Actions to Protect Collective Interests
These are provided for in Article 11.2 of the Act on Civil Procedure in circumstances where the consumers or users who suffered the loss are perfectly determined, or at least, may be easily determined. In these cases, consumer or user associations, entities legally constituted for that purpose and affected groups (if they represent the majority of the potential claimants) are entitled to bring legal actions against the natural or legal person that caused the loss.
Actions for the Protection of Diffuse Interests
These are provided for in Article 11.3 of the Act on Civil Procedure in circumstances where the loss was suffered by an undetermined number of consumers or users, or where the number of consumers or users is difficult to determine. Legal standing attaches exclusively to the representative consumer or user associations. Individuals may join an action of this kind started by the representative consumer and user associations, but they do not have legal standing on their own.
The Spanish system is an opt-in one (Spanish law does not provide for an opt-out mechanism). All affected consumers are free to opt-in and claim their personal damages within a collective procedure. In those cases where the affected consumers are perfectly determined or can easily be determined (ie, in actions to protect collective interests), individual consumers may join the collective proceedings at any time. If the affected consumers are undetermined or very difficult to determine (ie, in actions for the protection of diffuse interests), the court shall suspend the proceedings for a period which shall not exceed two months, in order to give publicity to the claim, and to notify the existence of the collective proceedings to the general public. Individual consumers will only be able to join the proceedings during this period.
As provided for in Article 11 of the Spanish Act on Civil Procedure, the following persons and entities have legal standing to bring collective actions:
There is no judicial oversight of settlements of collective actions.
There is no summary judgement under Spanish law.
With regard to the basic rules of jurisdiction, three different cases can be distinguished:
Regulation 1215/2012 provides for a general jurisdiction: persons domiciled in an EU member state (whatever their nationality) shall be sued in the courts of that member state.
Additionally, in cases of damages caused by an infringement of competition law: "a person domiciled in a Member State may be sued in another Member State (2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur."
Further to the interpretation of the European Court of Justice in connection to claims for damages for anti-competitive practices, Article 7 of Regulation 1215/2012 "refers at the same time to the place where the damage occurred and to the place of the causal event that caused that damage, so that the action against the defendant can be brought at the plaintiff's choice before the courts of either of those two places."
Regarding the location of the damage, the European Court of Justice has clarified that it is the place of materialisation of the damage, meaning the member state where the damage actually materialised.
Therefore, bearing in mind the different types of antitrust infringements and the various ways in which their harmful effects are verified, this means that, depending on the specific case, combining these two points of connection (place of occurrence of the harmful causal event and place of materialisation of the damage) there may be several potential jurisdictions available to the claimant.
For instance, in the case of international cartels, the place where the collusive conduct occurred may involve different jurisdictions if there were different agreements, arrangements or meetings in several countries, and the cause of the injury suffered by the injured party may be linked to a number of them; and
With reference to the basic rules of applicable law, Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) applies. Any law specified by this Regulation shall be applied whether or not it is the law of a member state.
Article 6 incorporates a rule for (private) damages that may result from infringements of competition law: the law of the country where the market is, or is likely to be, affected applies. This special rule applies to infringements of both European and national competition law rules, as stated in recital 23.
However, if several national markets are affected, several laws will apply. This circumstance may constitute a serious obstacle to individual claims for compensation, since the injured party may have to prove it under several different laws (as many as the member states in which the damages were suffered).
The Regulation attempts to alleviate these difficulties by allowing the application of a single law, ie, the law of the forum, to be invoked under two conditions:
Section 74 of the ADC provides for a five-year limitation period that runs from the date that the infringement ceased and the claimant knew or could reasonably have known about:
The limitation period shall be interrupted if a competition authority initiates an investigation or sanctioning procedure in relation to an infringement of antitrust law relating to the damages action. The interruption ends one year after the decision taken by the competition authority becomes final or the proceedings are otherwise terminated.
Such limitation period shall also be interrupted when a procedure for an out-of-court settlement is initiated.
Article 283bis.a) of the Act on Civil Procedure provides that Spanish courts may order the claimant, the defendant or a third party to produce relevant evidence in their possession. In order to request the disclosure of documents, the applicant must submit to the court a reasoned request about the feasibility of bringing a damages action. A hearing shall be called at which the requested party may oppose the disclosure of documents.
The request may refer, inter alia, to the following data:
The courts shall limit the disclosure of evidence to what is proportionate, considering the legitimate interests of all parties and all interested third parties. Fishing expeditions shall be denied.
The disclosure of documents may be requested prior to the commencement of the proceedings, in the lawsuit or during the pendency of the proceedings. When the disclosure of documents has been agreed prior to the commencement of proceedings, the applicant shall file the lawsuit within 20 days of the disclosure of the documents.
In cases of antitrust damage claims, the court may order the production of evidence containing confidential information, although it shall take the necessary measures to protect confidentiality as outlined in Article 283bis.b) of the Act on Civil Procedure.
When ordering the production of documents, the courts should give full effect to the rules of legal professional privilege.
If a party is requested to disclose documents that may be subject to legal professional privilege, such party shall be entitled to oppose such disclosure on the ground that such documents are legally protected against disclosure. The courts should review whether the documents requested fall within the scope of legal professional privilege and, if so, deny the petition of the applicant.
Article 283bis.i) of the Act on Civil Procedure provides that any statements made further to a leniency programme and any settlement requests are protected from disclosure. A court cannot therefore request that a party or third party disclose such documents.
Parties may request that persons who are aware of facts in dispute of the subject matter of the trial should testify as witnesses.
The general rule is that witnesses testify orally and are subject to cross-examination. They are firstly questioned by the attorney of the party who proposed the witness evidence and afterwards, the attorneys of the remaining parties may pose new questions they may consider conducive to establishing the facts.
By way of exception, when it is necessary for legal persons or public entities to report facts and it is impossible to identify a particular natural person to testify orally, a party may propose that such legal person or entity responds in writing to the questions submitted. Opposing parties may also submit questions to that legal person or public entity.
When it comes to antitrust damage claims, expert witnesses are an essential part of the process, both for claimants and defendants. Parties do not require the permission of the court to adduce expert evidence.
Claimants do generally file an expert report with their statement of claim in order to support the calculation of damages. In turn, defendants normally request the participation of an expert to oppose the damages calculations and, if applicable, to support the existence of pass-on of any damages down the supply chain.
Apart from the reports filed, experts are required to appear before the court at trial in order to ratify the content of the reports filed and give any required clarification.
Unlike in arbitration proceedings, it is unusual for the courts to require experts to produce joint statements indicating the areas in which they agree or disagree in advance of the trial. However, experts are subject to cross-examination by opposing counsel(s) and may also be subject to direct argument with other experts.
The general rule under Spanish law is that a claimant is liable only in respect of loss actually suffered and duly proven.
However, in antitrust damage claims such standard is substantially relaxed and:
Therefore, in line with the general aim of the Directive, claimants' burden of proof of the damages suffered is reversed and the burden is shifted to the defendants.
Overcompensation by means of exemplary, multiple or punitive damages is expressly forbidden by the regulation implementing the Directive.
The availability of the passing-on defence was already recognised by the Spanish Supreme Court before the implementation of the Directive (eg, in the so-called Sugar cartel case).
After implementation of the Directive, Article 78.3 of the ADC expressly provides that "the defendant may rely in his defence on the fact that the plaintiff has passed on all or part of the extra cost resulting from the infringement of competition law."
The burden of proof therefore lies entirely on the infringer (defendant).
Interest on damages is payable as expressly stated in Article 72 of the ADC.
Although the Directive provides that interest shall be paid "from the time when the damage occurred until the time when the compensation is paid," domestic legislation implementing the Directive is silent about its calculation.
The general rule contained in Article 1,100 of the Spanish Civil Code states that interest is payable only from the time that a calculated and concrete figure of compensation is claimed either judicially or out of court.
The key element here is that the calculation of the concrete amount for damages is normally not available until the claim is ready to be filed with the court (ie, such calculation is normally included in the expert report supporting the claim). Therefore, many discussions (still unresolved) arise as to how to reconcile the 'full compensation principle' of the Directive with the provisions of Spanish domestic legislation based on the principle, in iliquidis non fit mora (and also with the prohibition of overcompensation, because sometimes the application of legal interest provides for higher compensation than that derived from the application of the consumer price index).
Pre-judgment interest is the legal rate of interest annually approved by the Spanish government (eg, 3% for 2019) whereas post-judgment interest is 2% over the legal rate of interest.
The principle of joint and several liability of infringers was recognised by the Spanish Supreme Court before the implementation of the Directive.
After the implementation of the Directive, Article 73 of the ADC expressly provides for the joint and several liability of undertakings which have been declared jointly and severally liable for infringements of antitrust law. Parent companies may also be jointly and severally liable if they have exercised a decisive influence on the commercial conduct of their subsidiary.
Consequently, the aggrieved party may choose to claim against all the infringers or against only one or some of them.
By way of exception, Article 73.2 of the ADC includes some limitations on the general principle of joint and several liability:
In accordance with Article 73.5 of the ADC, an infringer who has paid compensation may claim against other infringers an amount to be determined on the basis of their relative responsibility for the damage caused.
The "relative responsibility for the damage caused" is an indeterminate legal term, the interpretation of which will likely give rise to litigation in the future.
Further to the rules of the Spanish Act on Civil Procedure, injunctive relief is generally available.
An applicant must fulfil the following three requirements:
An application for an injunction is normally made at the same time as the filing of the main claim, although it is possible to apply for an injunction prior to the filing of the claim.
Generally, the court will decide on the application for an injunction after hearing the defendant. However, it is also possible to apply for an injunction on an ex parte basis (ie, without notifying the application to the defendant). In order to obtain an ex parte injunction, it is necessary to prove that there are reasons of urgency or that having a hearing may compromise the very purpose of the injunction sought.
Depending on the workload of the court handling the application, an injunction can generally be obtained within one to four months.
In accordance with Article 745 in connection with Article 742 of the Act on Civil Procedure, when an applicant succeeds in obtaining an injunction but fails at the trial of the substantive case, the applicant must compensate the loss suffered by the defendant as a result of the granting of the injunction.
Article 77 of the ADC encourages the resolution of disputes through out-of-court settlements. To this end, it has introduced a series of protective measures for a party that agrees to settle: for instance, a party with whom no out-of-court settlement has been reached may not claim a contribution for the remaining compensation against another party that has settled.
Apart from the above, general alternative dispute resolution methods are available, although they are not mandatory.
Litigation funding is available in Spain and no limitations are generally known so far.
The general rule on costs is that the party whose position is fully dismissed is ordered to pay the costs of the counterparty. In the case of partial acceptance/dismissal of a claim, each party bears its own costs, except if a party is declared to have litigated in bad faith or recklessly.
The appraisal of costs that can be claimed is normally made by reference to the fee guidelines issued by the Bar Association of the province of the court handling the matter, which basically provides fee estimates based on the amount at stake in the proceedings.
In recent years, the Supreme Court has rejected the automatic application of these criteria (basically based on the amount at stake) and ordered that the legal costs be calculated by reference to the work done, the complexity of the matter and other similar criteria. However, the courts still tend to automatically apply the fee estimates of the Bar Associations (perhaps because it is a much easier system for them).
Appeals are available both before the provincial courts and, subsequently, before the Supreme Court.
Appeals before the provincial courts are allowed against all types of decisions on damages claims (except in amounts lower than EUR3,000), provided that the appellant is harmed by the decision (gravamen).
Appeals before the provincial courts are ordinary appeals, so a new, full and comprehensive examination of the case is allowed, as long as all the issues are again raised within the appeal. Decisions of the provincial courts cannot impair the appellant's legal position.
Decisions of the provincial courts can be appealed only in exceptional cases before the Supreme Court. Such appeals (cassation appeals) may only be based on violations of material rules and regulations (points of law) and can only be lodged:
A decision has cassational interest if:
Extraordinary appeals for procedural violations can only be based on the following grounds: