On February 1, 2021, the Hanover Regional Court dismissed a claim brought by special purpose vehicle Retail Cartel Damage Claims SA (“CDC”) against sugar manufacturers Nordzucker AG, Südzucker AG and Pfeifer & Langen GmbH & Co. KG, on the basis that the CDC had no standing to sue.[1]

In February 2014, the Federal Cartel Office (“FCO”) had imposed fines on sugar manufacturers for concluding anticompetitive agreements regarding so-called industrial and retail sugar.[2] The decision was followed by approximately 90 damages actions brought against sugar manufacturers throughout Germany with a total volume of around € 1 billion. As part of a bundling of claims, the CDC claimed a record sum of € 186 million for REWE Group and 62 other retailers and food manufacturers based on excessive sugar prices.

The court concluded that the assignments of the alleged claims to CDC violated the German Legal Services Act (Rechtsdienstleistungsgesetz) and consequently deemed them null and void. The court found that the transfer and legal enforcement of the alleged claims amounted to the independent provision of “extrajudicial legal services”, which is generally prohibited under the Legal Services Act. Further, the Hanover Court stressed that the bundling of assigned claims from purchasers at different levels of the supply chain inevitably leads to impermissible conflicts of interest. This can be illustrated by way of the passing-on-defense: While the plaintiff had to argue—in favor of the direct purchasers—that they did not pass on the overcharges, it required— in favor of the indirect purchasers—a contrary argumentation, sometimes with regard to the same specific delivery.

[1]      See Hanover Regional Court decision (18 O 34/17) of February 1, 2021, not yet published.

[2]      See FCO’s Press Release of February 18, 2014, available in English here.