On 17 December 2013, the District Court of Düsseldorf ruled against a EUR 131 million lawsuit brought by Cartel Damage Claims ("CDC") against six cement manufacturers. The Court held that CDC had obtained the cement purchasers' claim illegally, given its limited risk for covering the litigation costs.
In March and April 2003, the German competition authority, the Bundeskartellamt, fined the cement producers for a competition law infringement. On 10 April 2013, the German Supreme Court confirmed the decision. After purchasing these claims, CDC brought them before the District Court of Düsseldorf and asserted that the infringement led to an increased price level of cement, thereby overcharging a group of 36 cement purchasers a total exceeding EUR 175 million.
CDC bought the claims of the cement purchasers for a price consisting of both a fixed and a variable component. The fixed part was EUR 100 for each claimant. The variable component amounted to a percentage between 65% and 85% per claimant of the amount awarded or of a settlement sum. The Court considered that the cement purchasers therefore hardly bore any risk of bringing legal action over the claims. CDC's risk was limited as well, because the legal entity that acts for CDC in these proceedings does not own sufficient assets to be able to fully pay a possible cost order, especially the opposing parties' litigation cost. The Court ruled that, as a consequence, the litigation costs risk was shifted from CDC and the cement purchasers to the defendants. The acquisition of the claims therefore breached the German Law on Legal Advice and, being contrary to public morals, the German Civil Code.
The judgment is open for appeal to the Oberländesgericht of Düsseldorf. CDC has already publicly indicated that it will most likely appeal the judgment. In a press statement, released shortly after the judgment, CDC claimed that German law on transferring claims is exceptionally extensive compared to the law of other EU member states.
