The Saw on the Legal Services Act

By: Christian Kersting (D’KART)

Christian Kersting, Director of the Institute for Competition Law at Heinrich Heine University, examines the ECJ’s ruling in Case C-253/23 – ASG2 (ECLI:EU:C:2025:40). Originating from the Landgericht Dortmund, the case addresses a key issue in competition law damages claims: Under what conditions can claimants assign their claims to a third party? This question arose in a stand-alone action brought by German sawmills against the Land of North Rhine-Westphalia, seeking damages for an alleged antitrust violation.

Background

Cartel damages litigation is often complex and expensive, making it impractical for individuals or small businesses to pursue low-value claims. Consider the impact of cartels on everyday goods like sugar, coffee, or beer—few end consumers ever seek compensation. Even at higher market levels, individual lawsuits may not be economically viable. In the absence of effective collective redress mechanisms (see LG Dortmund, order of 13 March 2023, 8 O 7/20 (Kart), NRWE para. 63 et seqq., 69 et seqq. = BeckRS 2024, 5354 para. 25 et seqq., 28 et seqq.), claimants have turned to bundling claims through assignment models to reduce litigation costs.

However, German law has not definitively ruled on whether claim bundling through assignment models is legally permissible (see LG Dortmund, NRWE para. 63 et seqq. = BeckRS 2024, 5354 para. 25 et seqq.). Defendants have repeatedly challenged this approach, and courts have, in some cases, declared such assignments null and void, leaving claims stranded with the original assignors—often until they expire due to time limitations. This legal uncertainty raises a critical question: If neither collective redress mechanisms nor assignment models are available, how can injured parties effectively enforce their rights? This issue forms the backdrop of the Dortmund Regional Court’s referral in the ASG2 case.

Key Questions Referred to the ECJ

In its preliminary ruling request, the Dortmund Regional Court asserts that assignment models are impermissible, at least in stand-alone actions (NRWE para. 63 et seqq. = BeckRS para. 25 et seqq.). It further argues that no alternative, equally effective mechanisms exist in Germany for enforcing mass claims or dispersed damages caused by competition law violations (NRWE para. 69-104 = BeckRS para. 28-38). As a result, the court believes that claimants in Germany lack an effective means to enforce rights granted under EU law, potentially violating both the EU principle of effectiveness and the right to effective judicial protection (NRWE para. 110 = BeckRS para. 42). Consequently, the court has referred the following key questions to the ECJ:

1. Does EU law—including Article 101 TFEU, Article 4(3) TEU, Article 47 of the Charter of Fundamental Rights, and Directive 2014/104—preclude national laws that prohibit claimants from assigning their damages claims to a legal service provider for collective enforcement, particularly where no equivalent alternative mechanism exists? This includes situations where procedural constraints or economic factors make it practically impossible or excessively difficult to pursue damages individually.
2. Does EU law impose the same requirement in stand-alone actions (i.e., cases where no prior infringement decision from a competition authority exists) if, in the absence of such assignments, no private or public enforcement action would be pursued under Article 101 TFEU?
3. If either of the above questions is answered affirmatively, must the conflicting provisions of German law be set aside to ensure compliance with EU law, thereby validating assignment-based enforcement models and ensuring effective legal redress?

The ECJ’s response to these questions will have far-reaching implications for cartel damages litigation in Germany and across the EU, particularly concerning collective redress mechanisms and access to justice for victims of antitrust violations…

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