Contributed By Advokatfirmaet Thommessen AS
There have been very few "pure" competition damages cases before the Norwegian courts and no cartel damages claim has yet resulted in a judgment. There are some examples of out-of-court settlements in competition damages cases, in addition to contractual claims being defended on competition law grounds. Based on recent cartel and other competition-infringement decisions from the Norwegian Competition Authority (NCA) and the European Commission, we expect more cases over the next couple of years.
On 27 November 2019, the Norwegian Supreme Court (HR-2019-2206-A) upheld a decision by the Oslo District Court, dated 1 July 2018, in which the District Court assumed jurisdiction pursuant to Article 6(1) of the Lugano Convention 2007. The case was brought by several Norwegian and foreign plaintiffs belonging to the Posten Group against a number of foreign addressees of a decision by the European Commission (AT.39824 - Trucks) and one of the defendant's Norwegian subsidiaries. Now that the jurisdiction of the Oslo District Court is established, it will continue to assess the substantive aspects of the case.
Directive 2014/104/EU (Damages Directive) has not yet been implemented into the European Economic Area (EEA) Agreement or transposed into Norwegian law.
There are no other significant developments in Norway, relevant to antitrust litigation, at this time.
There is no specific statue in Norwegian law mandating claims for damages for breach of competition law. These claims must be brought on the basis of the general rules and principles of the law on damages. Claims can be brought as follow-on or standalone claims. The plaintiff must be able to demonstrate a basis for liability, financial loss, and causation between the harmful event and that loss.
Claims for damages following a breach of competition law must be brought before the ordinary Norwegian courts, which in the first instance are the District Courts. Chapter 4 (2) of the Norwegian Dispute Act (NDA) regulates which exact District Court should be the legal venue for the claim, see also 4.2 Jurisdiction/Applicable Law for further information on jurisdiction. Norwegian judges are generalists.
Norwegian courts handling competition damages claims assess the evidence brought before them independently and are not bound by decisions of other courts or government bodies. Accordingly, a final decision from the NCA (or a final judgment from a court confirming the decision) is treated as evidence but is not binding for a court that handles a subsequent claim for damages relating to the same subject-matter. Although the issue is not entirely clear under Norwegian law (and without a definitive precedent), it is nevertheless likely that a court handling a damages claim will, in its assessment of the evidence brought before it, give significant weight to a final NCA decision or a judgment relating to the infringement in question.
The decisions of foreign national competition authorities, or courts in other states, are similarly not binding on a Norwegian court when it decides on a claim for damages for breach of competition law. However, the Norwegian court will likely give weight in its assessment of evidence to such competition authority decisions or judgments.
Articles 53 and 54 of the EEA Agreement
Section 8 of the EEA Competition Act prevents Norwegian courts from making decisions pursuant to Articles 53 and 54 of the EEA Agreement (which mirror Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU)) when the alleged infringement is already the subject of a decision by the European Free Trade Association (EFTA) Surveillance Authority (ESA), contrary to ESA's decisions or decisions that ESA intends to make after it has initiated legal proceedings. Legal scholars argue that the same must apply to claims for damages based on a decision by ESA regarding a breach of Articles 53 and 54 of the EEA Agreement, but at the time of writing there is no case law that confirms this view.
The NCA may, on its own initiative, provide written submissions to the courts on questions relating to the application of Articles 53 and 54 of the EEA Agreement. The NCA may also provide its submissions orally if the relevant court so permits. As Section 7 of the EEA Competition Act requires the courts to also apply Articles 53 and 54 of the EEA Agreement in cases where trade between EEA member states may be affected, the NCA will, in practice, often also have the right to intervene in cases involving Sections 10 and 11 of the Norwegian Competition Act (which mirror Articles 53 and 54 of the EEA Agreement/Articles 101 and 102 of the TFEU). ESA has a similar right to intervene in cases where uniform application of Articles 53 and 54 of the EEA Agreement so requires.
A claim for compensation for an alleged violation of the competition legislation will, in principle, succeed if the courts finds it more likely than not that there has been a competition infringement, a financial loss, and a causal link between the infringement and that financial loss. The standard required for the NCA to impose an administrative fine for an infringement of the Norwegian Competition Act is that the violation is substantiated by sufficiently clear and precise evidence, which is intended to constitute a stricter standard. The plaintiff generally bears the burden of proof.
Indirect purchasers may, in principle, bring claims under Norwegian law, but bear the burden of proof as to the amount of damage suffered and the causal link between this damage (the overcharge) and the infringement of antitrust law. Although these claims are recognised under the law, there is nevertheless some uncertainty about the actual opportunities for obtaining coverage; taking into account the specific assessment that must be made (pursuant to case law) of whether the loss relates to a specific and immediate interest. This includes an assessment of who should bear the loss based on reasonableness.
At the time of writing there are no judgments clarifying the state of Norwegian law regarding passing on in antitrust litigation. For direct Norwegian purchasers, passing on will likely be treated under the doctrine of benefit deduction, meaning that benefits gained from a violation shall be deducted from the compensation provided that the benefit is caused by the injurious act. The burden of proof will be reversed in these instances (ie, it will be up to the offender to demonstrate that the overcharge has actually been passed on).
Direct Norwegian purchasers could also raise a claim as a restitutory claim based on the contract. The question of passing on might not be as relevant here as under the law of damages. The Norwegian Supreme Court acknowledged the principle underlying the passing-on defence in the so-called KLM case (on flight seat fees, Rt-2008-738). In their decision, the Supreme Court acknowledged the government's argument that a charge that was passed on could not be refunded, much based on a condictio indebiti viewpoint. Although the KLM case was not related to competition law, there is reason to believe that the courts will choose a similar approach in cases related to competition law. This would mean that a passing-on defence against a claim would be assessed with regard to limitation of restitution for unjust enrichment (ie, as a question of whether full compensation for the overcharge would result in an unjustified enrichment for the direct purchaser).
If a claimant alleges that the overcharge has been passed on to him or her, the claimant has the burden of proof regarding the passing on. Note that there is no presumption in Norwegian law for passing on, and it must accordingly be demonstrated by the relevant party.
Claims can, in principle, be brought by both direct and indirect purchasers, see 2.4 Burden and Standard of Proof.
There is no standard duration for proceedings in Norway after the issue of a claim. This will depend on the circumstances of each case, including factors such as the complexity of the case, the workload of the courts, and whether the case is appealed. In general, the duration of civil cases in Norway varies from roughly one year for a simpler case with no appeal, to five years or more for a complex case that is appealed all the way to the Supreme Court. Due to their complexity, cases regarding competition law are likely to require more trial time than many other civil cases, although the lack of precedent makes it difficult to predict this with certainty.
The court may, both on its own initiative or at the request of a party, stay the proceedings if the outcome of the case is wholly, or in part, dependent on a legal issue that will be bindingly settled in another case or if other impactful reasons exist pursuant to Section 16(18) of the NDA. Even though neither the EU Commission's decisions, nor the judgments of EU courts, are directly binding upon Norwegian courts, there is at least one matter where a Norwegian District Court found that a pending European Court of Justice (ECJ) judgment, which would clarify the liability in a competition follow-on claims case brought before the Norwegian courts, gave legal basis for a stay order. This is also in line with the homogeneity principle set out in Article 6 of the EEA Agreement.
Class actions are available in Norway pursuant to the provisions in Chapter 35 of the NDA. The Act also allows, to quite a large extent, joinder of parties in ordinary proceedings, provided that certain conditions are met.
Under Norwegian law, class actions are recognised on both an opt-in and an opt-out basis. Opt-in includes anyone who falls within the scope of the class as defined by the court in its approval of the class action and is entitled to be registered as a member within the time limit set by the court. Opt-out includes anyone who falls within the scope of the class as defined by the court in its approval of the class action and is automatically a member of the group, they will be bound by the court's subsequent ruling unless they withdraw from the class.
As long as they meet the relevant criteria, class actions are available to both indirect purchasers and direct purchasers.
Section 35(2) of the NDA sets out certain prerequisites for a class action:
It is also necessary to obtain the court's approval for the class action pursuant to Section 35(4) of the (NDA).
Settlement of collective actions available on an opt-out basis requires the approval of the court (Sections 35(11)(3) and 35(7) of the NDA). The rule is based on the rationale that the claims are of little individual value, and the group members can therefore not be expected to take an active role in the proceedings or even be aware of the action. It is therefore important that the court ensures that the process leading up to the settlement, as well as the content of the settlement agreement itself, is satisfactory. It is not necessary to secure court approval for the settlement of collective actions available on an opt-in basis.
Strikeout/summary judgments, as known in the common law system, are not available in Norwegian District Courts. However, under Section 9(8) of the NDA, the District Court has the ability to rule on a claim using a simplified judicial procedure where it is evident that the claim in question cannot succeed either in whole or in part or, conversely, it is evident that the objections to the claim are unsustainable as a whole. Similarly, the Court of Appeal has the power to reject an appeal during the pre-hearing proceedings if the appeal is flawed by certain errors that must result in the appeal being rejected.
Jurisdiction and Venue
In cases involving a Norwegian defendant, it follows from Section 4(4) of the NDA that the ordinary venue in Norway is the home of the defendant (ie, the defendant's habitual residence (for natural persons) and the head office according to the Register of Business Enterprises (for enterprises)). It further follows from Section 4(5) of the NDA that actions for damages for economic and non-economic loss in tort may be brought in the place where the damage originated or where its effect occurred or may occur.
In international matters, the competence of Norwegian courts is primarily governed by the 2007 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and complemented by Norwegian procedural law to the extent a matter is not regulated by the Convention.
Pursuant to Article 2 of the Convention, Norwegian courts have jurisdiction in antitrust matters if the defendant is domiciled in Norway. Norwegian courts can also have jurisdiction in cartel damages actions where the harmful event has occurred or may have occurred in Norway (Article 5(3) of the Convention). The latter is, however, pursuant to the case law of both EU courts and Norwegian courts (the Norwegian Supreme Court's decision in Rt-2011-897 Marin Alpin, paragraph 47), to be interpreted as a narrow exception to Article 2(1) of the Convention, and is only applicable if there are "particularly close connecting factors" between the dispute and the legal venue.
It is sufficient if one defendant in a group of joint and severally liable defendants can be sued in Norway for all of the defendants to be sued before the Norwegian courts, if there is a sufficiently close relationship between the claims against all of the defendants (Article 6(1) of the Lugano Convention). This was recently confirmed in the Trucks case (see 1.1 Recent Developments in Antitrust Litigation). The Supreme Court concluded that the conditions of Article 6(1) of the Lugano Convention 2007 were met as one of the defendants had a Norwegian subsidiary to establish a Norwegian venue. In the court's opinion, the claims against the defendants and the subsidiary were connected closely enough to have them assessed together, even though the subsidiary was not an addressee of the Commission's decision.
Choice of Law
There is no specific provision in Norwegian law regulating the choice of law related to claims for damages arising from breaches of competition law. The general rules regarding the choice of law for claims for damages will therefore apply. A Norwegian court that handles a claim for damages caused by alleged violations of the Norwegian Competition Act is likely to apply Norwegian law.
For claims for damage arising from violations of the Norwegian Competition Act or Articles 53 and 54 of the EEA Agreement, the limitation rules set out in Section 9 and Section 11 of the Norwegian Limitation Act of 1979 applies.
Pursuant to Section 9, a claim for damages in tort will, as a general rule, become time-barred three years after "the day when the claimant acquired, or should have acquired, sufficient knowledge of the damage and the person responsible". The criterion of "sufficient knowledge" is normally interpreted to mean sufficient in order to present a claim against the person responsible. Both elements must be proven in order for the limitation period to start. There is an absolute limitation period of 20 years after the injurious act or other basis for liability, such as a cartel, ceased.
Should the claimant fail to present the claim within the ordinary limitation period due to lack of necessary knowledge of the damage or the person responsible, the limitation period will, at the earliest, begin one year after the date on which the claimant acquired, or should have acquired, such knowledge (Section 10 of the Norwegian Limitation Act). The limitation period cannot be extended under the Section 10 rule by more than a total of ten years.
For follow-on claims, the limitation period is prolonged by one year after a legally binding decision or final judgment has been issued in the case (Section 34(2) of the Norwegian Competition Act, which was added to the Act in 2013).
Pursuant to Section 11 of the Norwegian Limitation Act of 1979, claims for damage arising from a punishable offence may, even if the limitation period has expired, be asserted in the course of a penal case in which the debtor has been found guilty of the offence under which liability has been incurred. Such claims may also be brought by a separate legal action within one year after the judgment of conviction in the penal case became final. The rules on limitation periods set out in Section 11 are only applicable where the violation of the Norwegian Competition Act from which the claim for damages arises has been sanctioned by penalty (penal fine or imprisonment), pursuant to Section 32 of the Norwegian Competition Act (ie, not where the violation has been sanctioned with administrative fines pursuant to Section 29 of the Norwegian Competition Act).
With the enactment of Section 34(2) of the Norwegian Competition Act in 2013, the NCA's choice between administrative or penal sanctions in competition cases has become of less importance in relation to the limitation period for follow-on claims based on such cases.
Discovery, as it is known in common law, does not exist in Norwegian law. It is, however, possible to petition the court to order the securing of evidence prior to commencing litigation (see Chapter 28 of the NDA). Evidence can be secured if it is of potential significance in a dispute to which the applicant may become a party or an intervener, and there is either a clear risk that the evidence will be lost or considerably weakened, or there are other reasons why it is particularly important to obtain access to the evidence before legal proceedings are initiated.
In Norwegian court proceedings there is a general obligation on parties to provide information that can be assumed to be of importance as evidence (Sections 21(4) and 21(5) of the NDA). A court may issue an order to ensure that this obligation is met. A party seeking such an order from the court relating to a document should identify the document and explain what information the document is expected to contain. The disclosure obligation is limited by the principle of proportionality as set out in Section 21(8) of the NDA and by the criterion of relevance set out in Section 21(7) of the NDA.
Business secrets and other information that falls under the rules on professional secrecy are generally inadmissible (Section 22(10) of the NDA). The court can, however, decide to treat information that falls under the rules of professional secrecy as admissible if it finds that the benefits of presenting the evidence prevail over the need for secrecy.
Under Norwegian law, documents can be withheld from disclosure if they are covered by legal privilege. In this context, legal privilege extends to written correspondence to and from a practising lawyer (including in-house lawyers), which is held by the lawyer or the client. The decisive criterion is whether the document in question was produced or received by the lawyer in connection with his or her provision of legal advice to the client and, as such, is covered by the lawyer's obligation of professional secrecy pursuant to applicable rules in Norway or another jurisdictions.
While there is no Norwegian case law on this matter at the time of writing, leniency and settlement agreements with competition authorities will most likely be protected from disclosure in subsequent damages claims. Information on admissions of guilt submitted to the NCA in the context of applications for leniency, or during settlement negotiations, is covered by the Authority's statutory duty of confidentiality pursuant to Section 27 of the Norwegian Competition Act and, as such, is inadmissible as evidence pursuant to Section 22(3) of the NDA. Furthermore, parties and party representatives that obtain knowledge of such information are under an obligation of confidentiality and restrictions on use pursuant to Section 27a of the Norwegian Competition Act.
For the sake of completeness, it should be noted that should someone violate these confidentiality obligations, this will not automatically entail that the court is prevented from using the evidence in question in its assessment.
In the Norwegian court system, witnesses of fact are, in principle, relied on to the same degree as other evidence that is presented to the court. Witnesses are subject to cross-examination.
The court can require persons who reside or are in Norway (and, on certain conditions, other Nordic countries) to present themselves before the court as witnesses.
The court may appoint an expert witness at its own initiative or when this is required by a party. The expert will normally submit a written statement unless the court decides otherwise (Section 25(5) of the NDA). Multiple experts may submit a joint statement unless the court decides otherwise. The court may summon the expert to provide his or her statement during the court hearing if it is deemed necessary or a party so requests. The expert may attend the hearing, consult with other experts and may ask questions of parties, witnesses and other experts if this is necessary to perform his or her assignment.
A party may call upon its own expert witness. Such an expert witness may attend the hearing and may be permitted to ask question of parties, witnesses and experts. The expert witness will provide an oral statement according to the rules for ordinary witnesses, and can therefore be subject to cross-examination. An expert witness appointed by a party may provide his or her statement as written evidence only to the extent the other party to the litigation agrees or is given the opportunity to examine the expert witness (Section 21(12) of the NDA). In such cases the written statement will, as a rule, not be presented until it has been confirmed that the expert who prepared it will attend the court hearing.
Norwegian law only provides for compensatory damages, and accordingly not punitive or exemplary damages. A causal link between the liability (culpable behaviour or contract breach) and the damage incurred must be proven by the claimant. The claimant will only be compensated for his or her net financial loss.
As set out in 2.4 Burden and Standard of Proof, the passing-on defence is, in principle, available in Norwegian law, although the lack of precedent makes it uncertain how it would be applied in practice.
Pursuant to the Norwegian Act on Interest on overdue Payments, a claim for damages will attract interest from the time the claim becomes due. In relation to antitrust damages this will likely be from the time of the wrongful event that triggered the liability (eg, the time when the claimant paid the overcharge).
Statutory interest is calculated as a percentage of the outstanding amount. The interest rate is normally amended bi-annually (January 1st and July 1st). The interest rate is higher than the market rate, partly to add a punitive element that encourages swift payment and partly to avoid the issue of compound interest.
Parties that have colluded in violations of applicable competition law will, generally, be held jointly and severally liable for the losses caused by the infringement. Different levels of culpability do not affect each party's liability with regard to the aggrieved party. The varying degrees of culpability amongst the group members may, however, be taken into account in the distribution of liability as between the group members (Section 5(3)(2) of the Norwegian Torts Act).
Applicants for leniency or immunity are not protected against damages claims from their direct purchasers or others.
There is no special procedure for bringing contribution proceedings against a third party, a claim for contribution is however subject to limitation. It follows from Section 8 of the Norwegian Limitation Act that if several debtors are liable to the creditor and one of them discharges his or her debt before the limitation period has expired in respect of him or her, the period of limitation for his or her recourse claim against a co-debtor shall be one year after the discharge of the debt. However, the claim shall not become statute-barred before the expiry of the limitation period to which he or she would be entitled if the discharged claim had been transferred to him or her. If the creditor’s claim against the co-debtor had lapsed at the time of discharge of the debt, the recourse claim can only be asserted if the co-debtor has been notified within reasonable time of the discharge of the debt. If, prior to the discharge of the debt, the period of limitation has been interrupted or prolongation has been agreed, it shall be further required that the co-debtor be notified of this within a reasonable period of time.
Injunctive relief is available under Norwegian law. For pecuniary claims, such as claims for damages, injunctive relief may be available by way of arrest pursuant to Chapter 33 of the NDA. In order to be granted an arrest, the claimant must substantiate its primary claim (such as the claim for damages) and show why injunctive relief is required and justified. An arrest will only be required and justified if the debtor's conduct gives grounds for fearing that enforcement of the claim would otherwise be evaded or considerably impeded. During the court's assessment it will apply the facts it finds to be most probable under the circumstances (which may be affected by the summary nature of these proceedings).
As a condition for the execution of the arrest, the court may decide that the claimant shall establish security as determined by the court in favour of the defendant. If delay involves a risk, the court may order an arrest even if the claimant has not substantiated its claim, provided that the claimant establishes the need for arrest. In such cases the court will always require the claimant to provide security in favour of the defendant.
Applications for arrest are submitted orally or in the form of a pleading. The application must set out the reasons for the claim for which arrest is sought and why arrest is required and justified. Documents invoked by the party submitting the application that are in his or her possession must be attached to the application.
The court will rule on the application for arrest by way of an interlocutory order after the parties have been summoned to an oral hearing. The court will reject the application if the claimant is absent from the court hearing (unless lawfully absent, in which case the hearing can be postponed). Similarly, the court can postpone the hearing if the defendant is lawfully absent. If a delay poses a risk, an interlocutory order for arrest can be made without an oral hearing. In such circumstances an arrest can also be obtained without notice being given to the other party.
There are no formal requirements as to how quickly the court must make a decision on whether to grant arrest without an oral hearing in cases where delay involves a risk. In practice, such decisions are rendered within approximately three to four working days from the submission of the application.
If it is subsequently established that the claimant did not have a valid claim when the arrest was ordered, the claimant will be liable to compensate the loss that the defendant has sustained as a result of the arrest, or as a result of measures that have been necessary to avoid the arrest or to have it set aside. The same applies if it is established that the application for arrest was unjustified due to incorrect or misleading information given with intent or through negligence.
Alternative dispute resolution methods are available in relation to antitrust damages claims to the same extent as in other areas of litigation. The rules governing arbitration in Norway are set out in the Norwegian Arbitration Act of 2004.
Litigation in Norway may be funded by third parties. Although not yet very common it has been seen in certain areas of civil litigation.
The general rule in civil litigation in Norway is that the losing party must compensate the other party for costs that are both necessary and associated with the case. The parties are normally required to present their cost claims at the end of the oral hearing. In the judgment the court decides whether the winning party will be awarded costs, and in what amount (often lower than claimed). There are exceptions to this rule, for example if the winning party is to blame for the initiation of the case or if the court finds it reasonable to not require the losing party to pay the winning party's cost.
Pursuant to Section 20(11) of the NDA a defendant may ask the court to issue an order requiring a claimant who does not reside in Norway to establish security for its potential liability for costs, although the circumstances in which this can happen are limited. Security cannot be required if:
When a District Court has awarded a party costs, that party can request an execution lien once the claim for costs is due, even though the court decision granting the costs is not yet final (Section 4(12) of the Norwegian Enforcement Act of 1992). However, if the defendant provides security for the claim for costs, an execution lien cannot be requested until the court decision is final (legally binding). Chapter 7 of the Norwegian Enforcement Act sets out the procedure for requesting an execution lien in these circumstances.
Appeals are available under Norwegian law and are addressed to the relevant Court of Appeal, which is determined by the location of the District Court that rendered the judgment that is being appealed. An appeal may be brought against a judgment or an interlocutory order on the grounds of:
The appeal is lodged with the District Court in question which transmits the case file to the relevant Court of Appeal after the other party has submitted its comments to the appeal.
The judgment of the Court of Appeal can be further appealed to Norway's Supreme Court, subject to authorisation from the Supreme Court in each case. Such authorisation is only granted where the appeal concerns issues that have importance beyond the case in question or where, for other reasons, it is particularly important to have the case decided by the Supreme Court.