On 10 November 2022, the Court of Justice of the European Union (CJEU) delivered its judgement ruling that Article 5(1) of the Damages Directive must be interpreted as meaning that the disclosure of “relevant evidence” in the control of the defendant or a third-party may include documents that are required to be created anew (ex novo) by the party to whom the request to disclose evidence is addressed, by compiling or classifying information, knowledge or data. However, the CJEU confirmed that national courts must limit the disclosure of evidence to what is relevant, proportionate and necessary.
Background to the dispute
In 2016, the European Commission imposed a fine on a number of truck manufacturers for their participation in a cartel concerning medium and heavy trucks. The infringement decision opened the door to a number of damage claims across Member States. In 2019, the claimants in the present case applied to the Barcelona Commercial Court to obtain access to certain evidence held by the Defendants (PACCAR and others). The Claimants argued that it was imperative to obtain this evidence to quantify an artificial price increase. However, the Defendants argued that some of the documents requested had to be drawn up on an ad hoc basis. According to the Defendants, such an obligation leads to an excessive burden on them, goes beyond a mere ‘order to disclose’ evidence, and is contrary to the principle of proportionality. Driven by uncertainty regarding the interpretation of Article 5(1) of Directive 2014/104/EU ("Damages Directive"), in November 2021, the Barcelona Commercial Court submitted a request for a preliminary ruling to the CJEU. In short, according to this provision, national courts in cartel damages proceedings should be able to order the defendant or a third party to disclose relevant evidence that lies in their control, subject to certain conditions.
The CJEU's judgment was largely in line with the opinion of Advocate General Szpunar and favored a broad interpretation of Article 5(1) of the Damages Directive. The CJEU noted that the wording of Article 5(1) as regards disclosure of evidence might lead to imply that it only concerns pre-existing evidence as it uses the terminology "evidence which lies in the control of defendants". However, the Court pointed out that due consideration should be given to the definition of the term "evidence" as described in Article 2(13) of the Directive which has a broad scope and therefore, does not necessarily correspond only to pre-existing documents.
Further, the CJEU also states that by referring in the Damages Directive to evidence "in [the] control" of the defendant or a third party, the EU legislature is making a factual observation illustrating the information asymmetry that can exist between a defendant and a claimant. The CJEU considers that to exclude at the outset the possibility of requesting disclosure of documents or other evidence that the party to whom the request is addressed would have to create ex novo would, in some cases, lead to the creation of obstacles making the private enforcement of EU competition rules more difficult. However, the CJEU also notes that Article 5(1) of the Damages Directive cannot result in defendants to main proceedings taking the place of claimants to main proceedings in their task of demonstrating the existence and scope of damage suffered.
The CJEU ultimately rules that Article 5(1) of the Damages Directive also covers those documents which the party to whom the request to disclose evidence is addressed must create ex novo by compiling or classifying information, knowledge or data in its possession, subject to strict compliance with Article 5(2) and (3) of that directive, which requires the national courts seised to restrict the disclosure of evidence to that which is relevant, proportionate and necessary, taking into account the legitimate interests and fundamental rights of that party.
The CJEU has thus confirmed that under the Damages Directive, and if certain requirements are met, there can be a basis for requests to disclose documents that are to be created ex novo. It is equally important to note that the judgment of the CJEU is not a blank cheque in favour of the claimants enabling them to make excessively broad or limitless requests for disclosure. The CJEU in this regard has made it clear that it is for national courts to also limit any disclosure of evidence to that which is relevant, proportionate and necessary.