Availability of civil claims
Scope for civil claims in Spain
Stand-alone and follow-on actions are available in Spain.
Civil claims can be brought in Spain under Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”), and/or under Articles 1 and 2 of the Spanish Competition Act against any undertaking or person engaging in a commercial or economic activity.
Remedies sought include a declaration that a contract is invalid because it contravenes competition rules (Article 1303 of the Spanish Civil Code). If upheld, the parties must be restored to the position that they were in prior to entering into the contract (i.e., restoring the goods and amounts exchanged under the contract), subject to certain limits.
Claims may also be filed to request compensation for losses and damages suffered as a result of a competition infringement, whether such claims are filed on a stand-alone basis or follow a finding of infringement by the European Commission, the National Markets and Competition Commission (“CNMC”) or the Regional Competition Authorities.
No specific rules exist under Spanish law that specially provide for the ability to sue in Spain relying on a foreign national competition authority’s findings, but this should in principle be possible.
Civil claims must be brought in the Spanish commercial courts, which are specialized civil courts that have been entrusted with applying and interpreting EU and Spanish competition rules. Follow-on actions in which only damages are sought might also be brought in the Spanish civil courts.
Applicable limitation periods
As the Spanish Supreme Court has confirmed in recent judgments, 1 damage claims based on the damages caused by the existence of a cartel are considered tort claims (as opposed to claims based on contractual liability). Therefore, the limitation period is generally one year from the day that the claimant becomes aware of the damages (i.e., the date when the claimant becomes aware of both the infringing act and the infringer) or from the day that the claim could have been exercised (Articles 1968 and 1969 of the Spanish Civil Code). 2 In Catalonia, the limitation period could be up to three years.
Existing case law indicates that, if the damages are caused by a series of illegal acts rather than a single continuous infringement, then the one-year limitation period is triggered for each individual illegal act. Thus, there is a different time period for each infringement.
The limitation period for bringing a claim challenging the validity of a contract (e.g., because it violates competition law) is four years from the date upon which the contract was entered into (Article 1301 of the Spanish Civil Code). As noted above, in cases where a contract is held to be invalid, the parties (subject to certain limitations) must attempt to restore the goods and amounts exchanged under the contract such that the parties are in the same position as they were prior to entering into the contract (Article 1303 of the Spanish Civil Code).
Appeals
The appellant may appeal a first instance decision to the competent court of appeal on both issues of fact and issues of law.
A further appeal from the court of appeal can be made to the Spanish Supreme Court. Only decisions that must be challenged in order to “unify legal doctrine” (i.e., the challenge is brought on the basis that a given decision is contrary to the interpretation of the law established in preceding case law) or exceed a certain monetary threshold can be appealed to the Supreme Court.
Availability of class actions for infringement of competition law and/or damages in Spain
Spanish legislation does not contain any specific provision regarding the standing of classes, groups or representative bodies to bring actions challenging agreements or a claim for damages based on an infringement of EU or national law.
The provision most similar to a “class action” is Article 11 of the Spanish Civil Procedures Act, which refers to the protection of the interest of consumers.
In cases where potential victims can be easily identified, Article 11.2 allows those groups of consumers or end-users, consumer and user associations and other legally constituted entities (the purpose of which would be the defense of the consumers) to bring claims for the protection of the collective interest of the group before a court and to claim damages.
Where the affected parties are an unascertainable group of consumers or end-users, or a group whose members cannot be easily identified, Article 11 of the Spanish Civil Procedures Act is more restrictive. Only consumer associations (which, according to the law, represent general consumer interests) may claim on their behalf. Acting through an association requires it to be recognized as a “formal association” (Articles 11.3 and 11.1 of the Spanish Civil Procedures Act).
Where a judgment is made in respect of this type of “consumer action,” each individual consumer must then apply to the court separately: (i) to be recognized as a member of the class or group; and (ii) so that the court can quantify the damages caused to that individual. In these cases, Spanish law requires that the individual appears in the proceedings and formally becomes a claimant. The defendant needs only to pay damages to the identifiable individuals.
Class actions are only available for the protection of the rights of consumers and end-users who, for example, have suffered a loss arising from anti-competitive conduct. Other types of affected groups (not representing the interests of consumers/end-users – e.g., a group of companies affected by a cartel formed by its suppliers) that wish to bring a claim will have to do so either individually or collectively (under the same legal representation). In such cases, the judgment will only affect the claimants involved in bringing the proceedings. It will not bind other parties that might also have suffered losses or damages as a result of the same infringement but who did not participate in the action.
Reportedly, to date there is only one case in which a consumer association has claimed for damages. The claim was submitted by the AUSBANC association against Telefónica on the basis of Telefónica’s margin squeeze in the Spanish broadband market 3 which, according to AUSBANC, would have caused damages of EUR458 million to Spanish consumers. However, the Spanish courts dismissed this claim on procedural grounds due to the fact that AUSBANC did not fulfill the formal conditions required to submit a claim on behalf of an unascertainable group of consumers. Therefore, the possibility of “class actions” remains mostly unexplored.
After the very recent CNMC Decisions sanctioning motor vehicle manufacturers and numerous dealers for alleged exchange of information and cartel behavior, a Spanish Consumer Association (“OCU”) has decided to bring damages actions. For the moment, available information indicates that the OCU has made a call to consumers that may have been affected by these anti-competitive practices. The development of such damages claims remains to be seen.
Conduct of proceedings and costs
Burden of proof
The claimant bears the burden of proof in establishing whether there has been an infringement. The required legal standard is to prove the existence of the facts constituting an infringement – there is no concept equivalent to the “balance of probabilities” or beyond reasonable doubt.
In cases where there is a prior final infringement decision of the CNMC, the Regional Competition Authorities or the European Commission, the court must accept that the infringement is established. 4 In such cases, the claimant only needs to prove causation and loss. Decisions from other national competition authorities may be accepted as evidence of the existence of an infringement, but will not be sufficient in themselves to establish such infringements.
In any event, the claimant must show a direct causal link between the infringement and any loss suffered. To do this, the claimant must demonstrate that the damages are the direct consequence of the infringement. If the defendant alleges the existence of possible causes of the claimant’s loss other than its own conduct, then the defendant will have the burden of proof with respect to those other causes and their effect on the claimant.
Spanish procedural legislation establishes that the court will take into account the degree of access that each party has to relevant evidence (Article 217 of the Spanish Civil Procedures Act).
Rebuttable presumptions as evidence can play an important role depending upon the specific factual circumstances. In competition law rebuttable presumptions could, for instance, be admissible with regard to damages and loss suffered if there is a sufficient factual basis in the case at stake.
The burden of proof in establishing that an agreement merits exemption under Article 101(3) TFEU or Article 1.3 of the Spanish Competition Act rests on the alleged infringer.
Joint and several liability of cartel participants
For non-contractual liability (such as liability arising from cartel offenses), Spanish case law indicates that, where several parties have acted jointly and caused damages as a result, and the particular actions of each infringing party cannot be separated, liability for the damages caused will be joint and several. To our knowledge, to date no Spanish competition case has been decided where liability has been apportioned between defendants.
Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege
In contrast with common law systems, in Spanish law there is no discovery and the parties are under no obligation to disclose their private documentation. Parties may use any documentation and evidence they can obtain through their own resources. They may also request specific and identifiable documents in the possession of the other party to be brought into the proceedings.
There is no obligation upon the CNMC to disclose investigation evidence to third parties in order to assist in a private enforcement action, although a court order may be obtained requiring such disclosure.
Legally privileged documentation may not be used by the CNMC, unless the privilege is waived, and should also not be used by the parties. However, the latter circumstance is considered an ethical obligation, not a legal obligation.
Pre-action disclosure
The applicable Spanish legislation does not provide for pre-action disclosure (i.e., the request of documents from the opposing party before the commencement of the trial) as a general preliminary measure. However, in certain cases it may be possible to obtain particular documents and evidence prior to the commencement of the trial.
Average length of time from issue of claim to judgment in Spain
A claim in the commercial courts typically takes from a year to a year and a half to reach the final judgment in the first instance, mainly depending on the workload of the court handling the case. An appeal to the Court of Appeal (on matters of either fact or law) will take about the same length of time.
Finally, appeals to the Supreme Court are usually lengthier and can add another 2 to 4 years to the duration of the proceedings. An appeal to the Supreme Court on matters of fact is only possible if the appellant can prove that the interpretation by the lower court was arbitrary, contradictory and clearly inaccurate.
It should be noted that claims in excess of EUR600,000 may be appealed to the Supreme Court for reasons of incorrect interpretation or application of either procedural or other legal rules. In contrast, claims with a value of under EUR600,000 may only be appealed to the Supreme Court if there is contradictory case law in the resolution of similar cases.
Average cost from issue of claim to judgment in Spain
The cost of litigation varies widely, depending on the complexity of the case and, usually, on the amounts claimed. As a general indication, a range of between EUR25,000 and EUR90,000 would not be unusual for first instance damage cases under competition law. In case of a costs award, the court commonly follows the criteria of the local Bar Association.
In Spain, the court will always order the party who loses the case to pay the costs and expenses of the other party, unless the case raises serious doubts as regards the facts or the application of the relevant law. In cases where the claimant’s petition and arguments are dismissed only in part, the court will not issue an order regarding costs, and each party will pay its own expenses.
Third party/alternative funding
There is no rule preventing alternative funding of litigation. We are not aware of any third party funding in Spanish law. Some insurance companies, however, provide legal defense insurance.
Alternative methods of dispute resolution
Alternative means of dispute resolution are available. Claims may, in principle, be submitted to arbitration.
Both the Arbitral Court of Madrid and (“Corte de Arbitraje de Madrid”) and the Barcelona Arbitration Tribunal (“Tribunal Arbitral de Barcelona”) are well-established arbitration organizations.
No Spanish arbitration awards dealing with competition issues or granting damages for an infringement of competition law have been published to date. However, arbitration awards are essentially private and therefore not generally available to public.
Relief
Availability of damages and quantification
Claimants may seek full compensatory damages – including damages, loss of profit and interest – for breaches of competition law in accordance with the judgments of the Court of Justice of the European Union in Courage v Crehan and Manfredi.
There are no specific Spanish rules regarding liability for damages for breach of EU and national competition law. Thus, the general rules on damages based on liability in tort are applicable. The Spanish Civil Code differentiates between two types of damages: actual damages (damnum emergens) and damages in the form of lost profits (lucrum cessans). The court may award compensation for both types of damages suffered by the claimant, provided that the amount of each is duly evidenced during the proceedings. Additionally, moral damages or those affecting the claimant’s reputation may also be claimed.
Generally, only losses directly suffered by a claimant may be compensated. Therefore, if a claimant has “passed on” all or part of the inflated cost of the products to its clients and has thus minimized the losses incurred, the court should take this into account and either reduce the amount of the compensation accordingly or reject the claim for damages on the basis of lack of evidence of the losses suffered. Otherwise, such a situation could give rise to unjust enrichment. The “passing-on” defense has been explicitly recognized by the Spanish Supreme Court. The burden of proof of the damages that would have been “passed on” by the claimant remains on the defendant.
There is no presumption under Spanish legislation that higher prices have been “passed on” to the end-purchasers. Thus, any defendant raising this argument will have to prove it to the court in a sufficient manner. 5
Given that damages are generally awarded to restore a claimant’s position, it is unlikely that fines imposed by competition authorities will be taken into account by the commercial courts when awarding damages (although this has not been addressed by the courts to date). This would require exceptional circumstances.
In any event, although the claimant is not obliged to do so, it is advisable to submit some expert economic evidence in order to prove the causation of the damages and the losses. In most cases, the defendant will submit its own expert report. The experts producing such reports may be obliged to attend the hearing to defend them.
Damages are mainly calculated by aggregating the economic damages suffered by the claimant and the economic loss of profit. Both must be proven, either through expert reports or the documentation that the claimant can provide to the proceedings. According to the Spanish Supreme Court, the expert reports must formulate a reasonable hypothesis concerning the damages suffered by the claimant founded on reliable data. In this sense, in its most recent judgments, the Supreme Court granted all the damages claimed by the claimants (and supported by the claimant’s expert reports) because the defendant’s expert report only refuted the claimant’s arguments but did not propose a different and equally reasonable calculation of the damages.
Moral damages are unilaterally determined by the court, based on previous case law and the repercussion, if any, of the infringement in the market.
For example, in a case affecting the electricity market, where a utility company limited access to a database managed by electricity distributors to only one of the electricity marketers, the judge decided that this was an abuse of dominant position and awarded damages based on the customers that the marketer would have obtained if it had unrestricted access to the database and the benefit that it would have obtained by each additional client.
Punitive and exemplary damages
Punitive or exemplary damages are not available in Spain.
Availability of interim or final injunctions in respect of an alleged competition law infringement
Interim injunctions preventing the defendant from continuing to infringe competition rules pending full trial of the issues may be sought from the commercial courts in interim injunction proceedings. There are no summary proceedings, only the possibility of an interim injunction.
To obtain an interim injunction, the applicant has to prove: (i) that there is a prima facie “appearance of good right” (fumus boni iuris); and (ii) that there is a risk that the final decision cannot be enforced without an interim remedy (periculum in mora). Additionally, in some cases it may be rational to stop the infringement, thereby preventing further damages from being suffered.
The claimant is obliged to submit bail in order to compensate the defendant for any damages that may be caused as a result of the injunction if the claim on the merits eventually fails. If the claimant loses the case overall, the defendant may indeed be entitled to claim further damages in specific follow-on proceedings.
Emerging Trends
In the last several years, the Spanish courts have ruled on several private litigation cases. The majority of these cases related to commercial disputes in the petrol station sector where the parties had requested the nullification of contractual clauses in the agreements between the petrol suppliers and the petrol station. The basis for these requests was that the relevant contractual clauses were contrary to competition law or the parties used the argument of breach of competition law to defend themselves from an alleged contractual infringement. These claims have been accompanied by requests for compensation for the losses and damages suffered. In addition, recent judgments of the Supreme Court have clarified some procedural matters regarding damage claims and paved the way for additional claims as the damage claimed were fully granted by the Supreme Court.
We expect that more civil claims will occur in the near future. The new EU directive 2014/104/EU on Antitrust Damage Actions will contribute to this trend too.
1 Supreme Court judgments of November 7, 2013 and June 8, 2012.
2 Recently, the Supreme Court has recognized that the prescription starts when the claimant is aware of the extent of the losses suffered from the infringement (i.e., the date when the claimant has clear knowledge of the damage suffered). See judgment of the Supreme Court (Case 528/2013), of September 4, 2013.
3 See judgment by the EU Court of Justice (Case C-295/12 P) of July 10, 2014, confirming in full a European Commission decision of 2007 that had fined Telefónica for a margin squeeze in the Spanish broadband market, in breach of EU antitrust rules.
4 See judgment of the Supreme Court of November 7, 2013. Nevertheless, in a recent judgment by the Commercial Court nº 12 of Madrid (Case 00088/2014) of May 9, 2014, the judge considered that, although the facts of the case did not constitute a cartel (following the judgment of the Court of Appeal), those same facts could constitute other anti-competitive conduct such as boycott. The claimant had to prove that those facts amounted to boycott, that the claimant had suffered a loss and that the loss resulted from the anti-competitive conduct.
5 The Supreme Court has clarified that, in order to prove the “passing-on” defense, is not enough for the defendant to prove that the claimant raised the prices to its clients. It is necessary that the defendant prove that, when raising the prices to final clients, the claimant managed to pass on all the damages suffered from the cartel. See judgment by the Supreme Court (Case 651/2013), of November 7, 2013, Sugar Cartel.