On September 23, 2020, the FCJ overturned a judgement by the DCA in which the Essen Transportation Authority brought a follow-on damages action against members of the so-called Rail Cartel (“Schienenkartell”).[1] It referred the case back to the DCA and provided further guidance to the DCA in relation to the applicable burden of proof as well as the scope of the passing-on defense.

The FCJ emphasized once again its decisional practice that claimants cannot rely on prima facie evidence for the causal damage. Instead, a factual presumption can apply in cases where the judge, on the basis of an overall assessment of all circumstances, finds a high probability of the occurrence of the main fact (i.e., the occurrence of a causal damage). The burden of proof for circumstantial facts is on the party that also

has to prove the main fact. On the other hand, it is for the opposing party to present and prove circumstantial facts that are suitable to influence the judge’s weighing of probabilities of the occurrence of the causal damage. If the judge does not find a high probability of the occurrence of the main facts, the plaintiff cannot rely on a factual presumption. The FCJ emphasized that it is not necessary for the defendant to prove the contrary, i.e., to prove that no damage has occurred.

In turn, the burden of proof for the passing-on of damages generally lies with the defendant relying on the passing-on defense. However, the burden of proof should not render it impossible for the defendants to demonstrate the passing-on of the overcharge. According to the FCJ, the standard of proof must therefore be reduced to a weighing of probabilities—i.e., the same standard that applies to the plaintiff for proving the occurrence of a damage—and the burden of proof shifts to the plaintiff where there is a high probability that from an economic perspective passing-on of the overcharge occurred.

The FCJ further explains that the aim of private enforcement is not only to compensate victims of the cartel but private enforcement also plays an integral part of an effective enforcement regime. The FCJ therefore held that where there is no risk that indirect purchasers will claim damages— which will regularly be the case in cases concerning consumer products/services—the defendant cannot rely on the passing-on defense to prevent any undue enrichment of the cartelists.

[1]              Schienenkartell V (KZR 4/19), FCJ judgment of September 23, 2020, only available in German here.