Private enforcement of competition law is gaining momentum in Poland. Although the national legislation implementing Directive 2014/104/EU on damages for competition law infringements (the “Directive“) entered into force in 2017, its provisions did not trigger as many cases as expected for the first few years. This has now changed and the possibility to seek compensation for competition law infringements is now firmly on potential claimants’ radar.
The limitation period applicable to competition claims has been a key issue in the lawsuits filed to date in Poland. In the first two private enforcement lawsuits, the courts dismissed the claims as time barred. While those rulings are subject to appeal, limitation looks set to be an important battleground for future cases.
Article 10 of the Directive provides that the limitation period for competition damages claims shall not begin to run before the infringement of competition law has ceased and the claimant knows, or can reasonably be expected to know,
(i) of the behaviour and the fact that it constitutes an infringement of competition law;
(ii) of the fact that the infringement of competition law caused harm to it; and
(iii) the identity of the infringer.
It also provides for a minimum limitation period of five years and for a suspension or interruption of the limitation period in certain circumstances.
Prior to the implementation of the Directive, competition damages claims were subject to the regular three-year limitation period for tort claims pursuant to Article 4421 of the Polish Civil Code. This period started on the day the injured party learned of the damage and the person liable for it. This provision has since been amended to include the following wording: “or might have learned about the delict and the person liable to redress it if he had exercised due diligence” (although this principle had been recognised by the Polish courts long before the amendment).
As the Polish implementing legislation does not apply retrospectively (echoing Article 22 of the Directive), two private enforcement lawsuits were decided by two different courts of first instance on the basis of Article 4421 of the Polish Civil Code.[1] In both cases, the claimants sought to recover an alleged overcharge attributable to an alleged anti-competitive conduct. The defendants argued that the claims were time-barred. The following facts were relevant for the limitation issue:
- the products were tailor-made for the claimants and were purchased following detailed procurement procedures;
- in the context of a continuous, long-term economic relationship between the parties, there had been a sudden and significant spike in the prices offered by the defendants, after which the prices returned to their previous level;
- approximately two years after the decrease of prices, the Polish Competition Authority required the claimants to provide financial data relating to the price changes for the purpose of its investigation into potential price-fixing, as a result of which the claimants reviewed (among other elements) offers submitted by the defendants and the level of the price change; and
- the Authority found that the defendants had fixed prices, had shared the market and rigged bids in breach of competition law (this decision was not binding and has been appealed by the defendants).
The claimants declared that they had learned of the damage and the entity obliged to compensate them from the Authority’s non-binding infringement decision, prior to which they had not been aware that the price change constituted “damage” or that they were the result of an illegal behaviour of the defendants. The courts rejected this argument and agreed with the defendants that the limitation period had begun much earlier, such that the claims were time-barred.
In both cases, the courts observed that the claimants should have monitored the prices of products on an ongoing basis and could have recognised that the price increases constituted damage once they had received (and answered) the Authority’s letters sent during its competition investigation. In the courts’ view, although the claimants were not parties to the investigation, they had enough information to learn about the damage and the entity obliged to redress it within the meaning of the limitation rules.
Article 4421 of the Polish Civil Code did not require the claimants to know more about the extent of the damage or the details of the illegal behaviour, such that the infringement decision did not substantially improve the claimants’ knowledge beyond what they already knew from the information requests they had received and responded to during the investigation. The limitation period started to run from the date the claimants answered the Authority’s last letter sent during the investigation.
As demonstrated by these cases, and a number of other cases at EU and Member State level, the beginning of the limitation period is of crucial importance. Recent CJEU jurisprudence on this issue (especially in case C-637/17 Cogeco), as well as a recent Advocate General opinion in case C-267/20 AB Volvo, provide no guidelines which would undermine the Polish approach. It remains to be seen whether the courts’ approach at first instance will be upheld on appeal and whether the courts’ view that the ordinary duties of a company conducting its business and the official correspondence from the Polish Competition Authority had to be taken into account will be confirmed. In any event, statute of limitation issues will likely remain important in private enforcement actions going forward, given their complexity and complicated factual backgrounds. This is particularly true for “transitional” cases in which the old three-year limitation period or the new five-year limitation period may apply. Thus, clarity as to when exactly the statute of limitations starts to run point is essential.
[1] The judgment of the District Court in Gliwice dated 9 July 2021 in case X GC 114/20 and the judgement of the District Court in Katowice dated 15 December 2021 in case XIII GC 284/21 (not published yet). In both cases B&M represented the Defendants.
