On December 11, 2018, the FCJ passed its long awaited judgment on the use of prima facie evidence in cartel damage proceedings.[1] In the context of damage claims resulting from the rail cartel, the FCJ found that plaintiffs can no longer rely on prima facie evidence alone to prove that a cartel caused them to suffer loss and damage. This marks a significant reversal of recent German case law.

In 2006, the FCJ had noted that cartels should generally be considered as “profitable” from the cartelists’ perspective and that they typically inflate the affected products’ prices. Following this ruling, German civil courts developed extensive case law on prima facie evidence a plaintiff needs to provide in cartel damage litigation. This line of case law routinely enabled plaintiffs, in the case of a wide variety of “hardcore” cartels, to rely solely on prima facie evidence to show that a cartel presumptively affected their business transactions and that they had suffered damages as a result.

The FCJ now reversed this line of case law. In particular, the FCJ rejected the proposition that even hardcore cartels could be said typically to cause damage, finding that it cannot be established with the requisite very high probability that cartel agreements are always implemented successfully.

The decision of the FCJ is relevant for all current and future cartel damages proceedings. In particular, it also applies to cartels that took place after 2016. Even though the latest amendment to the German ARC implementing the EU Damages Directive introduced a statutory legal presumption of damage (applicable to damage suffered after December 26, 2016), this presumption does not extend to the determination as to whether a specific business transaction was affected by the relevant anti-competitive conduct.

For a more detailed analysis of the judgement, see Cleary Gottlieb Alert Memorandum, German Federal Court of Justice Raises Evidential Bar for Plaintiffs in Cartel Damages Claims, February 1, 2019, available here.

[1]              Schienenkartell (KZR 26/17), FCJ decision of December 11, 2019, only available in German here.