This country-specific Q&A provides an overview of Competition Litigation laws and regulations applicable in Sweden.
What types of conduct and causes of action can be relied upon as the basis of a competition damages claim?
Injured parties can claim damages caused by infringements of the prohibitions in Swedish and EU law against (i) agreements between undertakings that restrict competition, and (ii) abuse of a dominant position. This follows from the Swedish Competition Act and the Competition Damages Act, covering infringements of both Chapter 2, Sections 1 and 7 of the Swedish Competition Act, and Articles 101 and 102 of the Treaty of the Functioning of the European Union (TFEU).
What is required (e.g. in terms of procedural formalities and standard of pleading) in order to commence a competition damages claim?
A written summons application, setting out the specific relief sought and the circumstances relied on as the basis for the claim, must be filed with the competent court. A preliminary statement of the evidence relied on should also be included. The summons application must be signed by an authorized representative of the claimant or by a counsel supported by a power of attorney signed by the claimant’s authorized representative. The application should also include the names and contact details of the parties. In addition, a court fee of SEK 2,800 must be paid to commence the proceedings. For a claim below SEK 23,650, the court fee is SEK 900.
In case some of these formal elements are missing in the summons application, the court will contact the claimant and request that the application is complemented. If the court’s request is not complied with, the application can be dismissed without prejudice.
What remedies are available to claimants in competition damages claims?
The injured party may claim damages for actual loss and loss of income, including interest. Punitive or exemplary damages are not available. It may also be possible to request a declaratory relief, e.g. on liability for damages per se for stand-alone claims where the competition law infringement is tried for the first time by the court.
The claimant may also request interim reliefs, such as attachment of assets, in accordance with the general provisions for interim measures in the Procedural Code.
What is the measure of damages? To what extent is joint and several liability recognised in competition damages claims? Are there any exceptions (e.g. for leniency applicants)?
The damages should fully restore the claimant’s financial situation to that which it would have been had the infringement never occurred. The court will compare the claimant’s actual financial situation with the hypothetical situation absent the infringement (the ‘but for’).
The compensation may include compensation for actual loss, such as financial loss or loss of, or damage to assets, and loss of income, including loss of interest, and loss of goodwill. The amount of the damages can be reduced if the claimant has contributed to the injury or if the claimant has benefited from the infringement.
Interest will accrue from the time the damage occurred. The interest rate is two percentage points above the reference rate of the Central Bank from the time the damage was caused until the legal proceedings were initiated. Thereafter, the interest rate is eight percentage points above the reference rate.
The general rule is that, if there is more than one infringer, the infringers are jointly and severally liable. However, the Competition Damages Act includes certain limitations on joint and several liability, including when the infringer’s market share is below five per cent, when the infringer has been part of a leniency process, and when the infringer has reached a settlement with the claimant.
What are the relevant limitation periods for competition damages claims? How can they be suspended or interrupted?
Under the Competition Damages Act, the limitation period is five years from when the infringement ceased and the claimant became aware of, or would reasonably have been aware of, the anticompetitive behaviour, that this behaviour caused damage and the identity of the infringer. The limitation period is suspended while a competition authority takes actions in the case of the infringement to which the claim relates. A new limitation period of five years commences from the day when there is a legally binding decision on the infringement or if the authority concludes its investigation in another manner.
Which local courts and/or tribunals deal with competition damages claims?
The Patent and Market Court in Stockholm, a specialized court for intellectual property, market law and competition law claims, has exclusive jurisdiction to try competition damages claims. A judgment from the Patent and Market Court may be appealed to the Patent and Market Court of Appeal, provided that a leave to appeal is granted. A judgment from the Patent and Market Court of Appeal is final, unless the Patent and Market Court of Appeal in rare cases allows an appeal and the Swedish Supreme Court grants a leave to appeal.
How does the court determine whether it has jurisdiction over a competition damages claim?
For cases concerning parties within the EEA, Swedish courts will apply the Brussels I Regulation and the Lugano Convention to determine jurisdiction. In cases involving parties outside of the EEA, the court will apply principles developed in case law with reference to the rules for determining local jurisdiction in the Procedural Code. According to these principles, the court will determine whether there is a Swedish interest in the administration of justice in the case, considering all relevant factors including whether the defendant has assets in Sweden and whether the harm was caused or suffered in Sweden. As a general rule, Swedish courts also recognise prorogation agreements, where the parties have agreed that Swedish courts should have jurisdiction to try a competition damages claim.
How does the court determine what law will apply to the competition damages claim? What is the applicable standard of proof?
Swedish courts will apply the Rome I and II Regulations to determine the applicable law. Accordingly, for damages claims relating to contracts, the applicable law is the law chosen by the parties, and in the absence of such choice the law stipulated by the provisions in the Rome I Regulation for various types of contracts. For non-contractual damages claims, the applicable law or laws are those of the markets that have been affected or are likely to be affected by the competition infringement. If several countries have been or are likely to have been affected, the claimant may request that Swedish law is applied for the entire claim, provided that the Swedish market has been directly and substantially affected.
The general rule is that the claimant should present full proof for the disputed facts invoked as a basis for the damages claim. However, according to case law and Chapter 35, section 5 of the Procedural Code, the burden of proof may be eased in situations where it is particularly difficult to present evidence or when it may unduly impede the effective exercise of the right to compensation guaranteed by the TFEU. Moreover, the Competition Damages Act includes a presumption that cartel infringements have caused damage.
To what extent are local courts bound by the infringement decisions of (domestic or foreign) competition authorities?
The courts are bound by infringement decisions by the Swedish Competition Authority and the European Commission. If the decisions have been appealed, the courts will be bound when the decisions have become final. Decisions by competition authorities or review courts in other EU Member States are regarded as prima facie evidence for the infringement.
To what extent can a private damages action proceed while related public enforcement action is pending? Is there a procedure permitting enforcers to stay a private action while the public enforcement action is pending?
A private damage action can proceed while a related public enforcement action is pending. The court may also stay the proceedings in order to await a judgment in another case, e.g. public enforcement, if the subject matter of such a case is of exceptional importance in the private enforcement case.
The court may also stay the proceedings up to two years if two or more of the parties have initiated settlement discussions concerning claims relevant to the case.
What, if any, mechanisms are available to aggregate competition damages claims (e.g. class actions, assignment/claims vehicles, or consolidation)? What, if any, threshold criteria have to be met?
Class actions may be brought in accordance with the Class Action Act. A private class action may be initiated by any person or entity, provided that such person or entity has a claim of its own and is a member of the class. An organisation class action may be brought by certain organisations without having claims of their own, e.g. consumer and labour organisations. A public class action may be initiated by a governmental authority to act as claimant on behalf of a group of class members, e.g. the Competition Authority. This form of action is intended to allow authorities to pursue claims where the public interest, in a broad sense, suggests that action should be taken.
However, bringing a class action requires that the questions of fact must be common or similar to the entire class. The group of claimants must also be suitable with regard to size and character, and be well defined to enable individuals to establish whether they are covered by the class action.
If several claims are closely connected, they can be consolidated and tried together in accordance with provisions on consolidation in the Procedural Code and in Article 8.1 of the Brussels I Regulation.
Are there any defences (e.g. pass on) which are unique to competition damages cases? Which party bears the burden of proof?
The passing-on defence may be invoked by the defendant. Thus, the compensation should be reduced to the extent the injured party has passed on an overcharge or undercharge to buyers and suppliers, respectively. However, it is the defendant who has the burden of proving the passing-on.
In relation to indirect buyers or suppliers, the Competition Damages Act provides that an overcharge or undercharge will, unless otherwise proven, be considered to have been passed on if the infringement caused an overcharge for the direct buyer or an undercharge for the direct supplier.
Is expert evidence permitted in competition litigation, and, if so, how is it used? Is the expert appointed by the court or the parties and what duties do they owe?
Expert evidence is permitted, and normally the parties appoint their own experts. Expert witnesses are commonly invoked to prove the amount of the damages, but also issues relating to causality and the relevant markets. Experts may also be invoked on legal issues, e.g. the contents of foreign law if such law is applicable in the case.
The courts may, at the request of one of the parties, also appoint experts or request that the Competition Authority calculates the damage. This is less common, and the Competition Authority has also a right to refuse to provide assistance.
Written expert reports are practically always filed before the hearing, although party-appointed experts are only required to do so if requested by the other party. The experts also testify at the hearing, to present their opinions in examination-in-chief and to be cross examined. A party- appointed expert is first questioned by the party invoking the expert, while a court-appointed expert is first questioned by the court. A court-appointed expert may not have any conflict of interest towards any of the parties. If a person has agreed to be appointed by the court, he/she may not subsequently withdraw from the assignment without valid cause. It is recommended that also party-appointed experts are independent, but this is not a legal requirement.
Describe the trial process. Who is the decision-maker at trial? How is evidence dealt with? Is it written or oral, and what are the rules on cross-examination?
The proceedings are initiated by a written summons application from the claimant. After the statement of defence from the defendant and possibly additional written submissions from each party, the parties are summoned to the court for a case management conference. At this conference, the court reviews the disputed issues together with counsel for the purposes of planning the proceedings, including the hearing. At the case management conference, the court may also assist the parties in settlement discussions.
Thereafter, the parties are normally ordered to file one or several additional pleadings, depending on the complexity of the case, including a statement of evidence specifying the written and oral evidence that will be relied upon at the hearing. A party may also request the other party to produce documents that may be of importance as evidence in the case, including electronic documents and categories of documents. During this phase, there may also be hearings on separate issues, e.g. relating to production of documents or on interim judgments.
After the written phase of the proceedings, there is a main hearing. At this hearing, the parties should present their case orally, including all written evidence on which the parties rely. All witnesses, including experts, are also heard and cross-examined at the main hearing. During cross examination, leading questions are allowed. The general rule is that only facts and evidence presented at the main hearing can form the basis of the judgment. Documents may normally be presented by referring to the documents while presenting the factual circumstances. At the end of the hearing, after written evidence has been presented and the witnesses have testified, the parties present their closing legal arguments and file their cost submissions.
Cases before the Patent and Market Court are normally heard by two legally trained judges and two economists. In the second instance, the Patent and Market Appeal Court, the legally trained judges are normally three, and the economists two.
How long does it typically take from commencing proceedings to get to trial? Is there an appeal process? How many levels of appeal are possible?
There are no statutory provisions concerning the lengths of the proceedings. Generally, it takes one to three years before the judgment is rendered in the first instance.
A judgment from the Patent and Market Court can be appealed to the Patent and Market Court of Appeal subject to leave to appeal. A judgment from the Patent and Market Court of Appeal can only be appealed if the Court of Appeal has given its consent to an appeal, and the Supreme Court has granted a leave to appeal. The appeal process is normally shorter than the first instance proceedings. The general rule is that it is not possible to add new facts or new evidence in the appellate process, unless this is approved by the court in certain circumstances. The witnesses are normally heard by reviewing video recordings of the witness testimonies from the first instance proceedings.
Do leniency recipients receive any benefit in the damages litigation context?
For an undertaking that has been part of a leniency process, its joint and several liability with other parties is limited. The obligation to pay compensation is limited to the loss that it has caused its direct and indirect buyers and suppliers. As regards damage caused to other parties, the liability of the lenient party is limited to an amount corresponding to its share of the damage.
How does the court approach the assessment of loss in competition damages cases? Are “umbrella effects” recognised? Is any particular economic methodology favoured by the court? How is interest calculated?
The damages should fully restore the claimant’s financial situation to that which it would have been had the infringement never occurred. Therefore, the courts will compare the claimant’s actual financial situation with the hypothetical financial situation absent the infringement. Umbrella effects are recognised as clarified by the EU Court of Justice in C-557/12 Kone.
Interest is calculated from the day the damage occurred until the day the damages are paid. Until the summons application initiating the legal proceedings is served, the interest rate is the reference rate of Riksbanken, the Swedish Central Bank, plus two percentage points. Thereafter, the interest rate is the reference rate plus eight percentage points.
Can a defendant seek contribution or indemnity from other defendants? On what basis is liability allocated between defendants?
A defendant can seek contribution from other defendants. The basis for the allocation between the defendants is their relative responsibility for the damage caused by the infringement. However, the amount of contribution of an infringer which has been granted immunity from fines under a leniency programme shall not exceed the amount of the harm it caused to its own direct or indirect purchasers or providers. Furthermore, the right to contribution from an infringer that has settled amicably with an injured party, is limited to the amount of compensation that has been given to another injured party.
In what circumstances, if any, can a competition damages claim be disposed of (in whole or in part) without a full trial?
A competition damages claim can be disposed of by the parties if they agree on a settlement and the claimant withdraws its claim. Such a settlement can be confirmed in an enforceable judgment if requested by the parties. The case may also be bifurcated and disposed of e.g. through an interim judgment on liability or a partial judgment relating to certain parts of the claim. However, normally this requires a full hearing on the issues to be tried in the interim or partial judgment.
What, if any, mechanism is available for the collective settlement of competition damages claims? Can such settlements include parties outside of the jurisdiction?
Collective settlements entered into by the claimant on behalf of group members of a class action must be approved by the court. Such a settlement may also include parties outside of the jurisdiction if they are members of the class action. The court will approve the settlement unless the terms of the settlement are deemed unreasonable or discriminatory.
What procedures, if any, are available to protect confidential or proprietary information disclosed during the court process? What are the rules for disclosure of documents (including documents from the competition authority file or from other third parties)? Are there any exceptions (e.g. on grounds of privilege or confidentiality, or in respect of leniency or settlement materials)?
Swedish public administration is generally characterized by transparency and the right of access to documents. Generally, every Swedish citizen has a right to access public documents. However, this right is restricted in many respects in the Public Access to Information and Secrecy Act. Under this act, e.g. information about an undertaking’s business operations, inventions and research results, is treated as confidential if the undertaking may be expected to suffer injury if the information is disclosed. Hence, in practice, information of a confidential or proprietary nature is normally not accessible to the general public.
In court proceedings, however, parties have a general right to access to documents that are relevant to the case. Upon request by a party, another party in the proceedings or a third party may be ordered by the court to produce documents that may have evidentiary value in the proceedings. This may include electronic documents and categories of documents. Exceptions to this rule include communications between a party and its counsel, and trade secrets unless there are special reasons for disclosure. Documents at a competition authority concerning declarations in a leniency process and settlement briefs are also excluded from disclosure. The court may, however, order a competition authority to produce other documents, if it can be assumed that the documents cannot be produced without inconveniences by another party.
Following the Damages Directive, Sweden has introduced provisions to ensure that the courts may order disclosure of documents containing confidential information. Accordingly, the court may order that documents are provided to the court and then disclosed with reservations, such as limiting the recipients and the use of the documents. Violations against a court ordered confidentiality reservation are sanctioned in the Criminal Code.
Can litigation costs (e.g. legal, expert and court fees) be recovered from the other party? If so, how are costs calculated, and are there any circumstances in which costs recovery can be limited?
According to the general rule, the losing party should bear the legal costs. The winning party can recover the litigation costs from the losing party, including counsel fees, expert fees, internal costs, disbursements, and court fees. The costs may also be apportioned between the parties depending on the degree of success.
There is no upper limit for the compensation. However, if the opposing party objects to the claim for compensation, the court will try whether the costs are reasonable. The court may decrease the amount of the compensation if it deems that the costs are excessive, for example if counsel has spent too many hours on certain issues, or if the hourly rates of counsel or experts are deemed excessive.
At the defendant’s request, a non-EEA claimant may be ordered to furnish security to guarantee payment of the defendant’s costs. However, also several non-EEA jurisdictions are exempt from this requirement.
Are third parties permitted to fund competition litigation? If so, are there any restrictions on this, and can third party funders be made liable for the other party’s costs? Are lawyers permitted to act on a contingency or conditional fee basis?
Third party funding is permitted in Sweden, and it has recently become increasingly common, including a couple of domestic funders. It is still unregulated and there is no domestic self-regulation.
The general rule is that third parties may not be held liable for adverse costs. According to case law, owners of an underfunded litigation vehicle may be held liable for adverse costs in exceptional circumstances, but there is no case law indicating that this would apply to third party funders.
If counsel is a member of the Swedish Bar Association, contingency fees are not allowed under the Swedish Bar Association rules, except in exceptional circumstances. The predominant view is that conditional fee arrangements, where the fees increases or decreases depending on the outcome, are acceptable provided that the fees are reasonable. Moreover, in a class action, the law stipulates that the claimants may agree with their counsel (who must be a member of the Swedish Bar Association) that the fees should depend on the outcome of the case. Such risk agreements in class actions require the approval of the court.
What, in your opinion, are the main obstacles to litigating competition damages claims?
There are no particular obstacles to litigating competition damages claims in Swedish law. As with all damages claims, it commonly is a matter of proving the circumstances relating to liability, causality, and the amount of damages. For follow-on claims, liability is already established, and the focus of the proceedings is, therefore, normally the evidence relating to causality and the amount of damages. This may be a complex matter, involving many factual circumstances and details concerning e.g. markets and financials. Therefore, in most cases, expert evidence is crucial to prove causality and quantum.
What, in your opinion, are likely to be the most significant developments affecting competition litigation in the next five years?
For several reasons, we expect to see an increased number of cases in the next five years. The growing use of third party funding to finance competition damages litigation will probably be an important factor in this regard. Other factors include the amended provisions following the Damages Directive, particularly those relating to a presumed causality in cartel cases, and more claimant friendly limitation provisions. Sweden is also an important centre for some of the fields and industries that may be affected by claims either as claimants or defendants, including digital technology, telecom, automotive, and commodities. Sweden is already an important centre for international disputes resolved by arbitration, and the courts are also experienced in handling international cases. The Swedish procedure is flexible and has attractive rules for disclosure and taking of evidence. Therefore, we expect Sweden to attract also more international cases in the years to come.
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