February this year saw a possible end to the first set of private enforcement litigation proceedings in Hungary.
The Debrecen Court of Appeal upheld the first instance judgment of the Eger Court, which had dismissed a claim brought by NIF Nemzeti Infrastruktura Fejleszto Zrt. (the NIF, a State-owned road infrastructure development company) against two defendants. The two companies had been fined by the Hungarian Competition Authority (HCA) in 2005 for bid-rigging in a motorway construction tender published by the NIF in 2002. Following the HCA decision and the court rulings upholding that decision, the NIF launched several lawsuits against the cartelists at the end of 2007, the last of which ended at first instance in October 2015, and at second instance in February 2016.
The length and the outcome of the procedure may suggest that it is not particularly easy to bring successful cartel damages claims in Hungary. So far, such claims have been tried primarily in the road construction sector. The biggest difficulty claimants (mostly tender publishers) have faced is proving not only the amount of their loss, but also that it was they who suffered the loss – i.e., that they did not pass on the loss to the entity that ultimately financed the construction. For example, in the motorway cartel cases, this difficulty was pinpointed by the fact that at one point both the NIF and the Hungarian State had lawsuits filed against the same cartelists before two different courts – a circumstance that led to the automatic inadmissibility of one of the lawsuits. The courts in all the lawsuits filed by the NIF essentially held that since the State had refunded all expenditures that the NIF had spent on the motorway construction, the NIF could by definition not have suffered any loss of its own assets, irrespective of whether the cartel had a price-increasing effect.
Like all EU Member States, Hungary will have to implement Directive 2014/104/EU (the EU Private Enforcement Directive) by December this year. The Directive in itself is not of ground-breaking significance in terms of the potential possibility of bringing private enforcement claims against defendants in Hungary. For example, Hungary is one of the very few countries in Europe that introduced as early as 2009 a (rebuttable) statutory presumption that a hard-core cartel causes a 10% increase in prices. Furthermore, Hungarian courts can also consider competition damages claims where the HCA decides not to open an investigation, although such cases are rare in practice.
By Eszter Ritter, Managing Associate, Andreko Kinstellar Ugyvedi Iroda
This Article was originally published in Issue 3.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.