German Federal Court of Justice rules on collective action assignments in cartel damages claims: Permissible, but subject to limits

The German Federal Court of Justice (Bundesgerichtshof) has issued a significant decision on the permissibility of collective actions (Sammelklage-Inkasso) in the context of cartel damages claims.

Until now, the admissibility of such models has been highly controversial in German Law. It has frequently been argued that the bundling of claims through collection service providers violates the German Legal Services Act (Rechtsdienstleistungsgesetz, “RDG”).

Following its landmark rulings on collective enforcement models in tenancy law (German Federal Court of Justice, judgment of 27 November 2019 – case no. VIII ZR 285/18, “Lexfox I”) and in the field of air passenger rights (BGH, judgment of 13 July 2021 – case no. II ZR 84/20, “AirDeal”), the German Federal Court of Justice has now addressed this issue in the context of cartel damages claims, specifically in relation to the truck cartel.

Key findings of the German Federal Court of Justice

The German Federal Court of Justice confirms that cartel damages claims can, in principle, be bundled and asserted by collection service providers pursuant to Section 260 of the German Code of Civil Procedure (Zivilprozessordnung, “ZPO”). However, this is subject to an important limitation: such bundling is only permissible as long as courts are able to guarantee effective legal protection.

Where the aggregation of claims becomes practically unmanageable – for example due to excessive size, complexity, or heterogeneity – courts are entitled to suggest a separation of claims into multiple proceedings under Section 145(1) ZPO.

If such separation is not carried out despite corresponding indications by the court, the claim may be deemed inadmissible as an abuse of rights by the collection service provider and a violation of the RDG. 

The case at hand

The case decided by the German Federal Court of Justice concerned an exceptionally large-scale collective action assignment, involving:

• more than 3,000 claimants
• claims arising in 21 jurisdictions
• over 70,000 individual transactions
• a time period starting in 1997
• partially unverified claims

This resulted in a procedural structure that a single court could not realistically handle within a reasonable timeframe.

Practical implications

The decision does not eliminate the underlying claims. However, it significantly complicates and prolongs their enforcement. The next step will involve restructuring and fragmentation of the aggregated claims. This is likely to have a substantial impact on procedural timelines and litigation strategies.

Relevance for the insurance sector

The decision has important implications for insurers, particularly in the areas of D&O, financial lines, and litigation risk.

• Increased procedural risk: While the ruling confirms the general admissibility of collective action assignments in cartel cases, it may also lead to more fragmentation of large-scale claims. This could result in parallel proceedings, higher coordination efforts, and extended timelines.
• Rising defence costs: Multiple proceedings and longer litigation durations are likely to increase defence costs, even where individual claims remain comparatively modest.
• Exposure uncertainty: The threshold at which claim bundling becomes impermissible remains case-specific, making it more difficult to assess exposure and set reserves.
• Claims handling and strategy: Insurers will need to closely monitor the risks associated with collective claims and their potential fragmentation at an early stage.
• Underwriting considerations: The decision is likely to influence the assessment of mass claims risks and collective enforcement mechanisms more generally.

Conclusion

Collective action assignments remain a key instrument for the enforcement of cartel damages claims. However, the German Federal Court of Justice has made clear that their use is subject to procedural limits. These limits will have direct implications for litigation strategy, cost development, and risk assessment going forward.