European Court of Justice highlights positive effects of third party litigation funding
It is the duty of the member states of the European Union to ensure that all national rules and procedures are designed and applied in such a way as not to make it practically impossible or unduly difficult to exercise the right to full compensation for the harm caused by a violation of competition law. This duty is even more relevant where cases typically require complex factual and economic analysis. Indeed, in view of the particularly complex, time-consuming and costly nature of an individual action on competition law infringement, injured parties would tend to forego bringing such an individual action if there were no possibility of assigning the relevant claim.
Based on these principles, set out in Directive 2014/104/EU, in its January 28, 2025 judgment in Case C-253/23, it highlighted that the right to compensation under EU law for damages resulting from infringements of EU and national competition law requires that each Member State have procedural rules to ensure the effective exercise of that right.
The European rules establish the right to obtain compensation for damage caused by violations of Union competition law, particularly with regard to standing and the definition of damage, as ruled by the case law of the Court of Justice, and does not affect any further development. Any person who has suffered damage caused by such an infringement may claim compensation for the loss of earnings of which he or she has been deprived, plus interest.
The right to compensation is granted to any natural or legal person, consumers, businesses and public authorities, regardless of the existence of a direct contractual relationship with the infringing enterprise, and regardless of whether or not a competition authority has previously found an infringement.
The Court recalled that under the principle of effectiveness, Member States must ensure that all national rules and procedures relating to the exercise of the right to claim damages are designed and applied in such a way that they do not make it practically impossible or excessively difficult to exercise the right, conferred by the Union, to full compensation for the damage caused by an infringement of competition law.
The Court’s ruling concerns the German legal system, but it is also relevant for the other countries of the European Union and, of course, for Italy, in that it expressly recognizes that the assignment of the res litigiosa constitutes a valid and effective tool within the scope of the aims and objectives set by EU competition law rules.
