Safeguarding collective redress: what ECJ Advocate General Szpunar‘s opinion on bundled claims against the Roundwood Cartel could mean for the effectiveness of private enforcement
It is well known that many European jurisdictions lack sufficient ways to obtain collective redress, such as the U.S.-style ‘opt-out’ class action. Germany is no exception in this regard. However, the so-called assignment model in Germany has increasingly established itself in recent years, particularly in the area of cartel damage claims.[1] Under this model, a legal service provider registered as a debt collection agency receives claims assigned to it in bulk by injured parties and enforces them in its own name, if necessary, in court. In return, the legal service provider receives a success fee, sparing victims the cost risk and significant burden of conducting their own lawsuits. By bundling claims, claimants benefit from economies of scale, enabling the engagement of specialised legal and economic experts, while pooling data helps close the information gap that typically exists in ordinary claims.
Lower courts, faced with these often voluminous and complex lawsuits, initially raised doubts regarding the assignment model’s admissibility. However, this appeared sometimes to stem more from reluctance on the part of under-resourced courts to engage with large claims rather than from serious doctrinal objections. More recently, practically all courts of appeal[2] and the Federal Court of Justice (see below) have endorsed the assignment model through a series of rulings.
Although most courts are now actively dealing with these cases, the District Court in Dortmund has referred one bundled case against the so-called roundwood cartel to the European Court if Justice (ECJ).[3] The court argued that competition law, particularly in cases which are stand-alone (i.e., they are not based on an existing infringement finding by a competition regulatory), is too complex for legal service providers to bring and effectively manage. The District Court in Dortmund was concerned that this outcome violated the key principle of effective enforcement of cartel damages which is enshrined in EU law, and referred the case to the ECJ for a preliminary ruling in order to obtain guidance on this issue.
While a referral to the ECJ may not have been strictly necessary (see below II.), as explored in this article this procedure – based on the Advocate General’s (AG’s) opinion – is nonetheless likely to reinforce the assignment model going forward and, as a result, the general private enforcement landscape in Germany.
I. How the District Court Presented the Case to the Advocate General
The AG outlined the facts as presented by the District Court in Dortmund (paras. 23-33). The District Court views the assignment model as generally impermissible in this case. The district court argued that the complexity of cartel damages and potential conflicts of interest make this area unsuitable for handling by legal service providers. Since the claimant cannot rely on a final competition law decision (stand-alone action), it purportedly lacks standing.
The Dortmund Court therefore would have to dismiss the claim, resulting in both the action’s failure and the injured parties’ inability to sue in their own name. A new lawsuit by the injured companies themselves would be time-barred at this point. Given that German procedural law provides no alternative for this type of dispersed damages, the District Court argued that victims would be left without meaningful legal protection, raising concerns under Article 101 TFEU, the Cartel Damage Claims Directive, and Article 47 CFR regarding effective judicial protection. The district court is therefore painting an extreme picture: either the claimants have to be completely denied relief or EU law comes to their rescue.
Given this description, it is not surprising that the AG considered the case to be an important one. The AG noted the importance of the ability for the ECJ to rule on procedural aspects of bundled claims in antitrust law:
“The emergence of players on the judicial scene whose aim it is to combine assets based on claims for damages resulting from infringements of EU competition law is not an entirely new phenomenon. Nevertheless, this case gives the Court an unprecedented opportunity to rule on the compliance with EU law of a prohibition on such players on the judicial scene collecting claims relating to harm caused by a cartel using the claim assignment model. More specifically, it is necessary to determine whether such a prohibition complies with Article 101 TFEU, Directive 2014/104/EU and the first paragraph of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).”
AG Szpunar, Opinion of 19 September 2024, Case C-253/23 – ASG 2, para 1.
The District Court of Dortmund’s depiction of the German legal landscape, as presented to the AG and the ECJ, appeared to overstate the problem. The German Federal Government argued in oral proceedings that German courts have already recognized the assignment model. Both the Federal Court of Justice (Lexfox[4], AirDeal[5], financialright[6]) and the recent legislative reforms (Legal Tech Reform[7]) have effectively addressed key objections to this type of collective redress. Contrary to the assumptions of the District Court of Dortmund, this acceptance also extends to “exotic” legal areas, such as stand-alone cartel damages claims.
In financialright, the Federal Court of Justice clarified that although a debt collection service provider is limited to the collection of monetary claims, it can provide comprehensive advice during debt collection, regardless of the legal provisions involved.[8] If the debt collection provider lacks expertise (e.g., foreign law), it must obtain this expertise externally, similar to a lawyer in that position, by consulting a foreign or specialized law firm if necessary. The Federal Court of Justice emphasised that there is no direct correlation between the subject matter reviewed for a legal services license and the provider’s advisory capacity. The financialright decision thus contradicts any assumption that a collection service provider’s competence would be limited by the complexity of a given legal field.
Furthermore, even before financialright, the District Court of Dortmund’s approach was problematic. Assuming that the court had identified a convincing distinction (e.g., between follow-on and stand-alone cases) that could persuade the Federal Court of Justice, the legal consequences it drew from this were even more questionable. While the extent to which a (potential) breach of the collection license and corresponding violation of the Legal Services Act could render assignments invalid remains debated,[9] the Federal Court of Justice in Lexfox I stressed that invalidity would only apply if it were “clearly” recognizable to the average debt collection customer, who otherwise should not bear the risk of such a legal assessment.[10] Other legal violations by the debt collection provider would primarily affect its contractual relationship with customers, without undermining the enforceability of rights against third parties.
Notably, the District Court of Dortmund’s referral to the ECJ does not elaborate on how the distinction between follow-on and stand-alone actions in this area, introduced for the first time by the court itself, could have been anticipated by an average customer. Instead, the court merely points out the high demands placed on specialized lawyers retained by the debt collection service provider. However, such lawyers were necessarily engaged by the debt collection provider both because of §§ 78, 79 of the German Code of Civil Procedure (ZPO) and because the bundled claims made their engagement feasible in the first place. By the time of financialright, it should have been evident to the District Court that German law did not contain the alleged limit on debt collection providers, as access to justice improvements weighed heavily in these types of cases. Not even EU law-conforming interpretation was needed, as statutory law already left no scope for dismissal here.[11]
II. The Advocate General’s Opinion
The AG answers the referral from the District Court of Dortmund without going into the details of the assignment model and sets out the principles that guide the ECJ when it comes to effective private enforcement. Ultimately, he describes the limits that EU primary law places on national procedural law when enforcing claims for damages within the scope of EU law.
The AG likely recognized, especially after oral proceedings and Germany’s submission, that the ECJ was presented with an erroneous presentation of German law by the referring court, although this did not unduly impact the ECJ or the AG. It was clear that plaintiffs in such bundle proceedings face ongoing challenges and that some lower courts are unwilling to follow Federal Court of Justice case law. These unresolved issues contribute to drawn-out, more expensive proceedings, which also might complicate settlements. Thus, the Dortmund court’s portrayal may have the effect of securing a procedural “safety net” with the ECJ’s support by ensuring the assignment model’s compliance with EU law, which German law already largely accepts.
The District Court of Dortmund’s desire for broader clarification is also evident from its first question referred to the ECJ, which extended beyond stand-alone actions to follow-on actions. This scope was deemed irrelevant by the AG and therefore inadmissible (paras. 46-61).
Before addressing the substantive questions of cartel damage litigation, the AG dedicates considerable attention to clarifying that EU law does not, as it stands, prescribe the specific modalities for enforcing such claims nor the validity of assignments or the specific concepts of collective litigation in competition law (paras. 83-107).
Instead of defending the assignment model per se, the AG approaches the issue through the more general prism of Article 47 CFR, as also suggested by the European Commission (paras. 109-117). Referring to recent ECJ rulings that emphasize Article 47 CFR’s independent and effective character,[12] the AG addresses the details of the assignment model. He has no doubt that, based on the referring court’s assumptions, effective law enforcement would be jeopardized if the only viable path for injured parties to claim cartel damages were obstructed. In competition law especially, there is a risk that claims would go unpursued entirely.
“[I]t is established that parties allegedly injured by a cartel may rely individually on their rights before German bodies. However, according to the referring court, asserting claims for antitrust damages is a complex exercise in terms of subject matter, economics and law and is therefore a protracted, expensive and risky process. The considerable investment in time and money required and the litigation risk involved are prohibitive for small and medium-sized enterprises, so that claims tend, with a rational apathy, not to be pursued.”
AG Szpunar, Opinion of 19 September 2024, Case C-253/23 – ASG 2, para 123.
It is unsurprising that the AG could not see any justification for a de facto prohibition on the assignment model:
“It must therefore be held that Article 101 TFEU, point 4 of Article 2, Article 3(1) and Article 4 of Directive 2014/104 and Article 47 of the Charter must be interpreted as precluding the interpretation of national law which has the effect, in the absence of a final decision finding an infringement of competition law, of automatically prohibiting alleged injured parties from assigning on a fiduciary basis claims for compensation for harm caused by a cartel to a licensed provider of legal services, so that that provider can assert those claims together, if other equivalent legal or contractual possibilities for consolidating claims for damages do not exist, with the consequence that it would be practically impossible, or in any event excessively difficult, to bring an action for damages for a small amount. That prohibition cannot be justified by the requirement of respect for the right to a fair trial and to effective legal protection of individuals.”
AG Szpunar, Opinion of 19 September 2024, Case C-253/23 – ASG 2, para 135.
Finally, the AG clarifies that if another interpretation of German law is not possible here, national law must be set aside:
“[I]f the referring court considered that it could not uphold an interpretation of the provisions forming the basis for the prohibition at issue in the main proceedings that was consistent with the principles of effectiveness and effective judicial protection, it would be required to disapply those national provisions and to hold that the claim assignments are valid.”
AG Szpunar, Opinion of 19 September 2024, Case C-253/23 – ASG 2, para 143.
III. Conclusion
In his opinion, AG Szpunar struck a balanced yet impactful compromise. Had he relied narrowly on the District Court of Dortmund’s depiction of the German legal context, his opinion – and any subsequent ECJ judgment based on it – could have been more easily disregarded by other German courts, potentially prompting further referrals to correct the factual record. Instead, Szpunar rooted his analysis in well-established standards, particularly regarding admissibility, which likely helped sidestep criticisms of judicial overreach.
The AG’s approach makes a significant contribution to advancing the understanding of Article 47 of the Charter of Fundamental Rights. This nuanced opinion is valuable not only in cartel damage cases but also for a wide range of legal contexts across Europe. By framing the issue in terms of fundamental principles of effective judicial protection, Szpunar highlighted the assignment model’s broader role in promoting access to justice. Importantly, he underscored that procedural limitations or high litigation costs should not deter individuals or smaller entities from seeking redress for rights guaranteed under EU law.
This opinion sets a constructive precedent, showing that, although national procedural laws and assignment models may vary across Europe, they are bound by the unifying principle of effective legal remedy in EU law. Article 47 CFR thus stands as a cornerstone, reminding courts across Europe that no claimant – whether hindered by information gaps, resource constraints, or complex legal structures – should be deprived of a feasible path to justice. With the ECJ’s decision expected in the coming months, there is optimism that it will echo this reasoning and further bolster access to justice throughout Europe.
Dr. Christopher Unseld is a Senior Associate in Berlin.
Footnotes
[1] See our earlier contribution Petrasincu/Unseld, Collective redress in Germany for cartel damages claims, Competition Bulletin, 24 August 2022, https://www.hausfeld.com/en-us/what-we-think/competition-bulletin/collective-redress-in-germany-for-cartel-damages-claims/; see also Petrasincu/Knebelsberger, The Airdeal ruling: German Federal Court of Justice strengthens collective redress in Germany, 31 August 2021, https://www.hausfeld.com/de-de/was-wir-denken/competition-bulletin/the-i-airdeal-i-ruling-german-federal-court-of-justice-strengthens-collective-redress-in-germany/.
[2] See, for example, Court of Appeal Stuttgart, Judgment of 15 August 2024, 2 U 30/22, WuW 2024, 553; Court of Appeal Munich, Judgment of 28 March 2024, 29 U 1319/20 Kart (juris).
[3] District Court Dortmund Decision, 13 March 2023, 8 O 7/20 (Kart) – now ECJ Case C-253/23 – ASG 2.
[4] Especially BGH Judgment, 27 November 2019, VIII ZR 285/18, BGHZ 224, 89 – Lexfox I; BGH, 27 May 2020, VIII ZR 45/19, BGHZ 225, 352 – Lexfox IV.
[5] BGH Judgment, 13 July 2021, II ZR 84/20, BGHZ 230, 255 – AirDeal.
[6] BGH Judgment, 13. June 2022, VIa ZR 418/21 – financialright.
[7] BT-Drucks. 19/27673, see Petrasincu/Unseld, Die Bedeutung der RDG-Novelle für das abtretungsbasierte Sammelinkasso, RDi 8/2021, p. 361.
[8] BGH Judgment, 13. June 2022, VIa ZR 418/21 – financialright, para. 23 et seq.
[9] Tolksdorf, MDR 2021, 1233.
[10] BGH Judgment, 27 November 2019, VIII ZR 285/18, BGHZ 224, 89 – Lexfox I, para. 91.
[11] Elaborated by BGH Judgment, 13 July 2021, II ZR 84/20, BGHZ 230, 255 – AirDeal, para. 22 et seq.
[12] See ECJ, Judgment of 20 February 2024, Case C‑715/20 – X (Lack of reasons for termination); see also Unseld, EuZW 2024, 556.
