Emmanuel Mastromanolis and Ilias Koimtzoglou analyse the potential impact of the forthcoming implementation of the Damages Directive in civil litigation in Greece
1 Are there any particular sectors in your jurisdiction which tend to be a focus for competition damages actions? Why do you think this is the case?
The driver for the expected wave of damages actions is likely to be the sectors investigated as well as the recent case law of the Hellenic Competition Commission (“HCC”). Given the considerable substantive and evidentiary advantages of raising a follow-on damage action as opposed to an action that has not been preceded by a dictum of the HCC, it is expected that the focus for competition damages actions will be on cases already handled by the Greek competition authority. In particular, during the past few years, the HCC has concluded several large scale investigations in the consumer goods sector and has issued landmark decisions imposing severe fines for both cartels (e.g., milk cartel, poultry farmers cartel), as well as abuse of dominance cases (Nestlé, Procter & Gamble, Athenian Brewery) in the consumer goods sector. As to the future, the sectors that will attract the attention of the HCC will be defined in line with the applicable priority system, which has been recently amended by virtue of decision no. 616/2015 of the HCC. According to the said decision, factors that will be decisive for attributing priority to the investigation of a case include the nature and the extent of a possible infringement, the nature of the products and services of the relevant market in which the infringement took place, the significance of the legal matters connected with said infringement, as well as the power of existing evidence.
2 Who do damages claims tend to be brought by in your jurisdiction? (e.g. direct purchasers, indirect purchasers, end consumers?) If claims are not currently being brought by indirect purchasers and/or end consumers, why do you think this is?
From the limited available jurisprudence of Greek courts, it appears that damage claims are mainly brought by direct purchasers or parties directly affected by the infringers’ anticompetitive conduct. Further to the implementation of Directive 2014/104/EU (the “Damages Directive”), the first wave of follow-on competition damages actions is expected to be brought mainly by market players at all levels of the market (upstream, downstream, and direct competitors) that have sustained damages from the anticompetitive behaviour of undertakings that have been sanctioned by the HCC due to their engagement in cartels and/or abuse of dominance infringements. Undertakings (as opposed to end-consumers) are more sensitive on the impact of any anticompetitive behaviour, and are also better equipped to launch and pursue such litigation given their financial and human resources, and access to key market information.
On the other hand, less competition damages actions are expected to be brought by indirect purchasers and/or end consumers. The key reason behind this projection is that, although Greece is in general a “litigious” jurisdiction, it lacks the appropriate tools that facilitate the exercise of actions by the above groups. For example, group actions “for the benefit of the general consumer interest” are currently reserved to registered consumer unions with more than 500 members. At the same time, collective redress mechanisms are limited in the system of Greek civil procedure, and therefore multiple parties interested in raising a civil action face significant obstacles in terms of establishing a class of plaintiffs, bundling their claims, funding their action and managing such action via a class representative.
3 What approach are the courts taking to claims that originate from investigations or infringements arising out of the jurisdiction?
Although no relevant case law precedents have been reported to date, the Greek courts should not be expected to show any reluctance in assuming jurisdiction for claims originating from investigations or infringements out of Greece, as long as such infringements have an adverse impact on the Greek market. That being said, jurisdiction before the Greek courts must be established on the basis of the substantive provisions of Regulation 1215/2012 (“Brussels Regulation Recast”), and more specifically based on the test whether “the anti-competitive effects occurred or might have occurred in Greece”. This approach is also compatible with the substantive provision of Article 46 of the Greek Competition Act, stipulating that the “objective field of application” of the Act depends on the satisfaction of the same test.
4 Do claimants favour your jurisdiction when they have a choice as to where to lodge a claim? Why?
Greece has not been perceived as a very friendly jurisdiction for pursuing damages in the context of competition law violations for a number of reasons, namely: a) the very slow pace of civil litigation; b) the absence of procedural tools for bundling multiple individual claims in the context of a class action (be it through an “opt-in” or an “opt-out” system; c) the evidentiary hardship faced by prospective plaintiffs; d) the lack of a “litigation culture” among victims of antitrust offences; and e) the lack of sophistication of Greek judges concerning competition law matters. However, following a recently adopted radical reform of the Greek Code of Civil Procedure (“GCCP”), which intends to facilitate speed and efficiency, Greece seems to have paved the way to becoming a relatively more favourable jurisdiction for pursuing a competition damages claim. In terms of procedure decisions of civil courts, these must be issued within short deadlines (approximately within one year), and in terms of substance, Greek courts tend to follow already (i.e., prior to the transposition of the irrefutable presumption of Article 9 of the Damages Directive) a presumption that an infringement decision by a National Competition Authority satisfies the ”illegality” element, essential for the establishment of a damages tort claim (Article 914 of the Greek Civil Code).
In terms of plaintiff expectations, it must be noted that Greek courts award damages exclusively within the perimeter of the “actual damages plus loss of profit sustained as a result of the tortious behaviour which is in direct causal link with the relevant action or omission” of the defendant. Therefore, plaintiffs may not successfully pursue any kind of indirect/consequential damages (unless an inextricable causal link with the anticompetitive tortious conduct is established), or treble/punitive damages which in other jurisdictions may function as litigation incentives.
Last but not least it must be noted that Greek courts are highly reluctant to “pierce the corporate veil” of the defendant, and have not yet provided any clear signal in their case law on how keen they are to apply the “parental liability” doctrine.
5 In practice, are the courts generous to claimants when awarding disclosure, including pre-action disclosure?
In principle, Greek courts will not deny disclosure, provided, however, that the requirements set forth in the GCCP are met. Claimants can apply for both pre-action and in-action disclosure. In pragmatic terms, however, judges tend to approve disclosure motions only to the extent that the documents and/or information requested are specified in detail. The adoption of the Damages Directive is expected to enhance discovery in the context of follow-on civil litigation to the extent that litigants will gain automatic access to the data collected by the competent competition authority in the context of its investigation.
6 How do the dynamics of a settlement really work in your jurisdiction? Is there a mechanism by which a "global settlement" can be approved/enforced?
The process of reaching an “out-of-court” or an “in-action” settlement is regulated by the GCCP, can be reached at any stage of the relevant dispute, and constitutes a valid title for enforcement proceedings. A settlement generally binds only the parties thereto and is not extended to third party, e.g., in a scenario where a potential claimant settles with one of the cartel participants, the claimant is not precluded from filing claims against the other cartel participants.
7 How long do damages actions take? What is the likely range of costs required to defend a claim?
Under the recent reform of the GCCP, Civil Courts are obliged to conclude proceedings at the first degree and issue a final decision within approximately one year as of the filing of the relevant lawsuit. The new provisions apply in respect of claims that have been filed before the Greek courts after January 1, 2016.
In terms of litigation cost, the filing of a lawsuit (including a competition damages action) triggers the prepayment of a court filing fee amounting to 1.1% of the amount of damages sought.
8 What funding options are available for (i) claimants and, (ii) defendants, in your jurisdiction?
As a matter of principle, litigation in Greece is privately funded, i.e., the costs of the proceedings are borne by the claimant(s) and the defendant(s) accordingly.
Although there exist certain public schemes and initiatives for the provision of legal assistance (e.g., the statutory scheme for the provision of legal assistance to low income individuals), in practice they only accommodate a handful of applications. The Greek courts will also make an award for cost recovery in their judgments, usually in favour of that successful party. However, cost recovery in litigation pertains only to those legal fees and expenses which were necessary for carrying out the court proceedings and usually amounts to just a fraction of the overall cost of the proceedings.
9 Do you anticipate any significant increase in damages actions in your jurisdiction over the next year or two? If so, where and why do you anticipate these increases coming?
The transposition of the Damages Directive into Greek law is expected to trigger a first wave of follow-on damages actions before the Greek courts. In particular, the implementation of the Damages Directive is likely to facilitate the pursuit of such actions, as it will introduce the presumption that an infringement finding by a National Competition Authority constitutes (at least) prima facie evidence of a tort and it will broaden the scope of disclosure by allowing potential claimants with greater access to file.
In anticipation of the 27 December 2016 deadline for the transposition of the Damages Directive, the Greek Parliament has already taken certain preliminary steps to facilitate the adoption of appropriate legislation within the limits of such deadline. These include, most notably, the establishment of the special committee which will be entrusted with drafting the implementation of the provisions of the Damages Directive in early March 2016.
In the meantime, the General Directorate of Competition of the HCC is actively pursuing several on-going investigations, including an investigation in the bidding market for construction projects, as well as a sector-wide investigation in consumer goods retail (supermarkets).
10 In your opinion, what are the key changes (if any) required in your jurisdiction to improve the effectiveness of private enforcement of competition law?
Other than the transposition of the Damages Directive into Greek law, which is expected to take place within 2016, additional legislative reforms should focus on the efficiency of the administrative courts in order to align litigation time frames between civil and administrative courts.
Given that a “final” decision of the National Competition Authorities is required for the civil courts to apply the rebuttable presumption of Article 9 of the Damages Directive, Greece will also need to adopt measures enhancing the speed of its administrative justice system. In practice, every decision of the HCC that deals with competition law infringements and which is likely to trigger civil damages actions is challenged, and thus it becomes final once, and to the extent that it is upheld on appeal before the Greek administrative courts. In practice, the appeal process may take several years to be concluded, and thus a significant time gap may arise before a party, wishing to take full advantage of the Damages Directive, can launch litigation before the civil courts.
In addition, under the provisions of the GCCP, the Greek civil courts retain the discretion to stay proceedings in case an appeal against an HCC is pending. In fact, there have already been reported competition damages cases where the civil courts have made use of such discretion in the recognition of the special evidentiary weight given to the infringement decisions of the HCC (even prior to the transposition of the Damages Directive). In this respect, any delay in the administrative proceedings relating to the validity of an HCC decision constitutes a time barrier for the launch and/or the conclusion of related civil litigation on damages.
In view of the above, harmonisation of time lines between administrative and civil litigation in competition law cases appears to be key for ascertaining the effectiveness of private enforcement. A reform ensuring the timely conclusion of administrative proceedings would particularly allow private claimants to fully reap the benefits conferred to them by the Damages Directive in terms of facilitating the exercise of their actions.
Last but not least, lodging of civil claims would also be facilitated by a procedural system facilitating collective redress of multiple plaintiffs. However, such system seems to be at odds with the conceptual foundations of Greek Civil Procedure, while, even at a European level, similar initiatives are confined within the boundaries of the European Commission’s Recommendation of 11 June 2013 “on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law”.
The authors would like to thank associate Angeliki Varela for her contribution to this chapter. Angeliki has been involved in many of the antitrust litigation cases handled by ZEYA in the recent years.