In a judgment from February 10, 2021, the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – found a clause providing for lump-sum compensation in response to damages claims lodged on the basis of unlawful cartel arrangements to be lawful (Az.: KZR 63/18).

The case concerned claims for damages that had been asserted against one of the members of the so-called “Schienenkartell” (rail cartel) that was exposed back in 2011. The cartel members had been colluding to fix, among other things, prices and quotas for railroad tracks. One transportation company had entered into an additional contractual agreement with one of the members of the cartel, according to which the former was entitled to claim lump-sum compensation in the event of a breach of antitrust law.

Lump-sum cartel compensation clauses of this kind are legally contentious. The BGH has now ruled that these clauses are legitimate and that they do not unduly disadvantage parties on the receiving end of such claims. We at the commercial law firm MTR Rechtsanwälte note that the decision is likely to prove positive for the victims of cartels above and beyond the rail cartel.

Lump-sum compensation clauses are regularly incorporated because of how difficult and tedious calculating cartel damages often proves to be. Cartel members frequently consider these clauses to be invalid, arguing that they are in breach of the laws governing general terms and conditions.

The Bundesgerichtshof’s cartel panel has since put an end to this line of reasoning, while also noting that there are several rules that need to be observed when it comes to compensation for cartel damages. The court held that quantifying damage that is the result of an antitrust infringement is often associated with considerable difficulties and a great deal of material and financial effort. Lump-sum compensation clauses are therefore key to making the enforcement of damages claims more efficient. According to the BGH, if a product was purchased at an inflated price due to illegal price fixing, compensation can be awarded as a lump sum by means of a clause to this end in the purchase agreement or contract for work and services in the amount of up to 15 percent of the total billing amount. The court went on to state that it is possible to make arrangements for a lump sum that corresponds to the average price markup resulting from cartels. The transport company in question had only agreed a lump sum of 5 percent.

Only if the lump sum is significantly higher than the damage caused by the cartel arrangements is the clause invalid according to the Bundesgerichtshof. This has yet to be determined by the appeal court in the instant case. Accordingly, the BGH referred the matter back to the Oberlandesgericht that had previously heard the case. The BGH noted, however, that the cartel member must demonstrate that the lump sum is in fact higher than the actual damage.

The ruling is equally groundbreaking for other damages claims lodged on the basis of unlawful cartel arrangements. Lawyers with experience in the field of antitrust law can provide counsel.

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