On January 15, 2025, the Paris Court of Appeal issued a decision in a follow-on damages case brought by French retail companies harmed by a cartel, providing clarifications on how financial damages should be calculated to also reflect the deprivation of funds over time and how responsibility should be shared among the undertakings found liable.[1]
Background
In a decision dated March 11, 2015, the FCA fined ten dairy producers €192.7 million for participating in an anticompetitive price-fixing and market-sharing agreement relating to retail own-brand label dairy products from 2006 to 2012 (with a variable duration depending on the companies).[2]
Following this decision, the companies Cora, Supermarchés Match, and Provera France brought an action before the Paris Commercial Court against various subsidiaries of the Lactalis, Andros, and Eurial (formerly Senagral) groups, which had been sanctioned by the FCA, seeking compensation for the damages incurred as a result of their involvement in the anticompetitive agreement.
Having been dismissed at first instance, the plaintiffs won on appeal. The Paris Court of Appeal found, in a decision dated November 24, 2021, that they had suffered financial harm as a result of the unlawful cartel and ordered the defendants to pay damages. It further indicated that these damages should be actualised by applying the plaintiff’s marginal borrowing interest rate, to take into account the additional harm caused by the unavailability of the sums lost.
Following an appeal to the French Cour de cassation, the Paris Court of Appeal decision was partially overturned. The French Cour de cassation recognized, in a decision dated June 7, 2023,[3] that the retailers had suffered damage that required compensation, but called into question the Court of Appeal’s approach to how the damages had been calculated (in particular the approach adopted for adjusting the compensation) and distributed among the defendants.[4] The Paris Court of Appeal, differently composed, clarified both points.
Adjustment of Damages
One of the core issues was how to ensure that the amount of damages due to the retailers took into account the time elapsed since the harm occurred.
The Paris Court of Appeal noted that under French civil law, a victim of a damage must be made whole for all losses suffered, but nothing further.[5] Therefore, the potential additional financial loss suffered due to the prolonged unavailability of funds over time should also be factored in, as a separate damage.[6]
When it comes to antitrust cases, the financial damage builds progressively, beginning with the first effects of the cartel and increasing as the overcharges accumulate.[7] The Paris Court of Appeal explained that compensatory interests should reflect this gradual buildup.[8] It therefore concluded that the financial loss suffered by the claimants accumulated gradually between the first price increases resulting from the anticompetitive practice and the date on which the first judgment recognized the damage.[9] Simply applying interest from the start or end date of the wrongdoing would either over- or under-compensate the victims of the anticompetitive practice, which would go against the principle of full compensation.[10]
Regarding the interest rates that should be applied when adjusting the damages, the French Cour de cassation remanded the judgement in June 2023 by holding that applying marginal financing rates (essentially any interest rates paid by the victims to borrow money) rather than legal interest rates, without sufficient justification was inconsistent with the principle of full compensation: the damages must match the actual loss, but not exceed it.[11] The French Cour de cassation did not reject the idea of using a higher rate in principle, but stressed that doing so requires solid evidence.
On remand, the Paris Court of Appeal heeded the French Cour de cassation’s guidance and applied the legal interest rate to calculate the compensatory interest.[12]
Sharing the Burden: In Solidum Liability and Internal Contribution
Under French law, parties that jointly cause a harm can be held liable in solidum, meaning each is individually responsible for the entire amount of damages.[13] This protects victims, who can recover full compensation from any one of the defendants. It is then up to the co-defendant who paid the victim to recover the cost from its co-defendants.[14] It is then up to the judge to take into account all the factors and assess the relative seriousness of each party’s fault.[15]
Even though all parties contributed to a single harm, they did not do so equally. To allocate responsibility, the Paris Court of Appeal initially considered the individual seriousness of each undertaking involved in the anticompetitive practice, guided by the fines set out in an earlier Court of Appeal judgment (which followed an appeal against the FCA’s decision). The French Cour de cassation overturned this approach, reasoning that fines imposed by the FCA are not based solely on the gravity of the conduct; other factors—such as a company’s economic circumstances or cooperation with the authorities (for instance, leniency applications)—can lead to reduced fines.[16]
Accordingly, the Court drew on the intermediate levels of fines set by the FCA[17]—each reflecting the individual conduct of the companies involved—as a benchmark for determining each one’s share of responsibility in the damages action. It further reasoned that these fine levels should be combined, in light of the causal role of the infringement, with concrete factors such as the amount of purchases of the products targeted by the agreement. This approach ensures the final assessment captures the true impact of each company’s conduct on the resulting damages.[18]
Implications and Key Takeaways
The Judgement by the Paris Court of Appeal, as shaped by the French Cour de cassation’s guidance, offers a methodology for calculating and awarding follow-on financial damages in France:
- Damages Grow over Time. French courts will ensure that a claimant is made whole for the time value of money lost. This means that the longer the litigation lasts, the more the base damages may grow due to compensatory interest, independent of any post-judgement interest for late payment. Claimants can calculate their losses over time and defendants have to be aware that delay in resolution could ultimately increase the final amount of damages awarded.
- Evidence-Driven Interest Rates. Claimants must provide concrete evidence if they want an interest rate higher than the legal standard.
- Liability Is Shared, but Not Equally. After the dust settles, co-defendants can sort out who ultimately bears how much of the paid damages. The specific rules contained in the French Commercial Code, stemming from the Damages Directive, aim at an equitable distribution of liability based on each party’s contribution to the harm and their situation. In practical terms, defendants should rely on their relative involvement and the extent of harm they individually caused and should not assume an even split or a split by fines.
[1] Paris Court of Appeal judgement No. 23/15327 of January 15, 2025, Groupe Lactalis (“Judgement”).
[2] See FCA Decision No. 15-D-03 of March 11, 2015 on practices implemented in the fresh dairy products sector.
[3] French Cour de cassation, commercial chamber, judgement No. 22-10.545, 22-11.099, 22-11.100 of June 7, 2023.
[4] Ibid., paras. 45, 48 et seq.
[5] Ibid and case law cited.
[6] The Court specifies that compensatory interest aimed at repairing an additional financial loss suffered due to the prolonged unavailability of funds is different from moratory interest which automatically compensates a creditor for delays in payment (see para 39).
[7] Ibid., para. 45.
[8] Ibid.
[9] Ibid., para. 49.
[10] Ibid., para. 46.
[11] Ibid., paras. 51-57.
[12] Ibid., para 60.
[13] Ibid., para. 63. This principle was already affirmed by France’s Cour de cassation in a judgement of July 11, 1892, and has since been reaffirmed regularly, for example French Cour de cassation, commercial chamber, judgement No. 89-15.439 of January 8, 1991, and French Cour de cassation, second civil chamber, judgement No. 9-71.196 of January 13, 2011.
[14] This principle stems from Article 1240 of the French Civil Code.
[15] Ibid.
[16] Ibid., para. 64.
[17] Ibid., para. 66.
[18] Ibid., para. 68.