The ‘Corrugated Cardboard’ Cartel

In antitrust law, private enforcement actions are civil proceedings brought by parties who have suffered harm as a result of an anti-competitive infringement (cartels, abuse of a dominant position, etc.) in order to obtain compensation for damages, independently and separately from the public enforcement action taken by the Competition Authority.

Whilst ‘public enforcement’ refers to the activities carried out by the AGCM (or the European Commission) to establish the infringement and impose administrative sanctions, ‘private enforcement’ refers to civil proceedings before the ordinary courts (in Italy, the specialised commercial divisions) through which businesses or consumers seek full compensation for the damage suffered as a result of the antitrust infringement.
The two dimensions are complementary: the AGCM’s decision does not award damages, but constitutes a privileged evidential basis for subsequent civil actions. In this context, Litigation Funders may intervene, i.e. third parties who support the aggrieved companies in bearing legal costs, costs for economic expert reports, litigation expenses, etc., by assuming the Litigation Risk. Under the agreement entered into with the parties holding the right to bring the claim, in the event of a successful outcome, the litigation funders receive a share of the compensation.

In private antitrust enforcement, their role is particularly significant because cases are lengthy, costly and technically complex; they require sophisticated econometric analysis (e.g. cartel overcharge, pass-on) and, finally, the injured parties (SMEs, downstream customers, and sometimes consumers) often lack the resources or incentive to take action individually.

The actions pursued by litigation funders in the field of antitrust law aim, in particular, to:

• establish the civil liability of the companies participating in the cartel;
• demonstrate the causal link between the unlawful agreement and the damage suffered;
• quantify the damage resulting from overcharging and, where applicable, loss of profit;
• obtain an order for compensation, including interest.

These are often follow-on actions, based therefore on a final decision by the AGCM or the European Commission, or aggregate or coordinated actions, brought by multiple claimants (including through special purpose vehicles or assignment of claims).