Global Guide to Competition Litigation Poland

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1 Global Guide to Competition Litigation Poland 2012

2 Table of Contents Availability of private enforcement in respect of competition law infringements and jurisdiction... 1 Conduct of proceedings and costs... 2 Relief... 4 Emerging Trends... 5 Contact Information... 6

3 Poland Marcin Kolasiński and Katarzyna Mrzygłód A. Availability of private enforcement in respect of competition law infringements and jurisdiction 1. Scope for private enforcement actions in Poland A private civil action can be brought on either a stand alone or follow-on basis in respect of any type of practice that might be deemed anti-competitive under Polish or EU competition law (including abuse of a dominant position and anti-competitive agreements). Private actions founded on a competition law infringement may be brought under the general damages provisions of the Polish Civil Code and the Civil Procedures Code (there being no specific legislation on private competition litigation) or under the Act on Assertion of Claims in Class Actions The approach to the issue and conduct of proceedings is the same for both corporations and individuals, whether domestic or foreign. Claims may include damages suffered outside of Poland where the Polish court has jurisdiction to hear the claim. 2. Applicable limitation periods The applicable limitation period for issuing a claim for damages in accordance with the Polish Civil Code and the Civil Procedures Code is three years from the date on which the potential claimant becomes aware of: i) the occurrence of damage; and ii) the identity of the person responsible for the damage or otherwise liable to compensate the claimant for that damage. The three-year period of limitation cannot apply more than ten years after the date on which the event causing damage occurred. It does not therefore matter when the fact of infringement is actually discovered by the claimant if the behaviour complained of came to an end ten years or more since discovery. The rules on limitation do not take account of circumstances in which the potential claimant does not become aware of the event causing damage within ten years (for example, in the case of a longrunning secret cartel). There is no period of limitation specifically tailored to private actions for competition infringement and no case law on how the standard applicable limitation period might be interpreted in such circumstances. The Polish courts have interpreted the scope of limitation restrictively in other fields of law, such as medical negligence, and, it is likely that a strict approach on limitation will also be applied in damages cases resulting from cartels to the extent EU competition law has not been infringed. As Polish law currently stands, it is not possible to sue participants in a cartel for damages resulting from their infringement if ten years or more have passed since the cartel was active. Hypothetically one might argue that a long-stop on limitation is not consistent with the Manfredi judgment but we are not aware of any such argument being raised before the Polish courts to date and so it is unclear whether this argument would succeed to circumvent the rules on limitation or not. Further, when litigating a single continuous infringement that occurred over a period lasting more than ten years, a claimant may try to recover all damage but the defendant may raise the statute of Baker & McKenzie 1

4 Global Guide to Competition Litigation - Poland limitations and thus, the claimant will only be able to recover damage suffered within the limitation period. 3. Appeals A ruling by the Polish Regional Court in respect of a private damages action may be appealed to the Appeal Court on grounds of either fact or law. Extraordinarily, a claim might be appealed further on a point of law to the Polish Supreme Court (cassation) if (a) an important legal issue is involved; (b) there is a need to clarify the application of legal provisions that raise substantial doubts or where there is divergence in jurisprudence; (c) there is an invalidity of proceedings; or (d) the appeal is obviously justified. 4. Availability of class actions for infringement of competition law and/or damages in Poland The Act on Assertion of Claims in Class Actions 2010 provides for a possibility for a group of ten people or more, who have claims of the same type and whose claims are based on one or the same factual ground, to file a collective claim. The Act uses a Polish word which may be understood to refer to either individuals or legal entities. We are not aware of any competition damage claims brought in reliance on these provisions. Claims are brought by a single person or the local consumer ombudsman acting as representative for the group. The ombudsman is a public position. He is not obliged to agree to act in every case and he acts in the interests of individual consumers only. If the group of claimants cannot agree on quantum of damages to be claimed, the group may restrict its claim to establishment of defendants liability and then bring individual actions in respect of damages owed to each of them. If permission to bring a class action is granted, the court announces the class action in national press and other interested persons are permitted to opt in to the action. The announcement of the court will indicate a deadline by which interested persons must opt-in the proceedings (from one up to three months). B. Conduct of proceedings and costs 5. Burden of proof The claimant bears the burden of establishing whether there has been an infringement of competition law and in demonstrating that, "but for" that infringement, loss would not have been suffered. The claimant must prove every element of its claim - including all the circumstances justifying the claim and all of the facts to which they attribute legal consequences (concrete loss and precise quantum). A decision issued by a competition authority may be strong evidence of infringement but, despite past judgments of the Polish Supreme Court suggesting that a civil court may be bound by the decision of the competition authority, it is not yet accepted that a competition authority's decision is definitive proof of liability in Poland. According to current case law, the court assessing the case may make its own findings as to whether an infringement has occurred, regardless of whether a competition authority has made a decision or finding in that case. Where a civil claim has been issued and a competition authority subsequently starts an investigation into the same matter, the Court may stay proceedings pending determination of the investigation but is not obliged to do so. Even if a decision of a competition authority exists and is accepted by the court as evidence that the infringement occurred, the claimant will still be obliged to prove that damage has been suffered as a result of the infringement. The court determines whether the given circumstances have been proved 2 Baker & McKenzie

5 to a satisfactory standard. Where the exact amount of damage cannot be proved or where providing the proof is excessively difficult, the court is able to award an amount that it considers appropriate. 6. Joint and several liability of cartel participants According to the Polish Civil Code, the general rule is that if more than one person might be deemed liable for an unlawful activity, those persons will be held jointly and severally liable for the resulting loss. Joint defendants are considered to share liability in full, i.e. each defendant is deemed wholly liable for the resulting damage. A court will not apportion liability between defendants on judgment, as the court simply declares joint and several liability rather than apportioning responsibility for damage between defendants. The main benefit to a defendant in joining other parties as defendants is that they will then be able to question the way that the proceedings are conducted by the first sued defendant in order to shift a greater portion of responsibility to the sued defendant. 7. Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege It is possible to apply to obtain non-confidential copy infringement decisions from the Polish competition authority. The authority is obliged to disclose so-called "public" information, however access to such information may be restricted if it contains business secrets. There is no standard disclosure obligation in Poland. However, a claimant may apply to the court to order defendants to disclose specific documents and information necessary in order to support the claim and to require that these documents are treated as non-confidential (even where covered by legal privilege). However, from a practical point of view it will be very difficult to identify documents to be disclosed as, in competition litigation, it is unlikely that the claimant will have knowledge of what documents exist as evidence of anti-competitive behaviour. 8. Scope of pre-action disclosure There is no scope to apply for pre-action disclosure under Polish civil procedure. 9. Average length of time from issue of claim to judgment in Poland Private enforcement is at a nascent stage in Poland. It is therefore difficult to specify how long it might take to resolve a competition claim from issue to judgment at first instance in comparison with other types of actions for damages. Generally, complex damages actions take from three to five years to reach judgment at first instance. As with other jurisdictions, the estimated time for any given case will depend on its complexity. Evidential issues concerning proof and amount of damages, such as arise in competition claims, are particularly difficult and will likely add to the complexity of any case. All will take a approximately 1-2 years to be resolved, depending on the complexity of the case and the court assigned to hear it. 10. Average cost from issue of claim to judgment in Poland The claimant must pay a court fee on filing the statement of case (in this type of case, likely 5% of the value of the claim within a range of PLN 30 (approximately 7) and PLN 100,000 (approximately 25,000). Baker & McKenzie 3

6 Global Guide to Competition Litigation - Poland The general rule on costs is that costs follow the event and the losing party pays the reasonable costs incurred by the winning party as well as bearing its own costs. In determining what costs are reasonable, the Polish Courts will objectively assess whether the costs incurred were necessary in conducting the case and the extent to which such costs can be justified. Even in cases where costs incurred are considered justified, the court may nonetheless in its discretion order that only part of costs should be paid by the losing party or not order any payment of costs at all. According to legal rules of procedure, this happens in particularly justified cases and it is for the judge to decide if the rule may be applied based on the circumstances of the case, (e.g. this may be because the claimant has caused some costs to be incurred by virtue of its negligent or unfair behaviour). 11. Third party/alternative funding There is no real precedent on the concept of third party funding in Poland. There are no rules prohibiting such funding but only the parties to the proceedings may ask for an order for recovery of the costs that they have incurred. It is possible to transfer the rights to a claim from one person to another, without the defendant's consent, and so it is theoretically possible for a third party to bundle claims in respect of damages claimed in competition litigation proceedings. 12. Alternative methods of dispute resolution Parties can choose to submit claims to arbitration or mediation, provided that the case arises from contractual relations and that the parties have agreed to submit the disputed issue to arbitration or mediation. To date, there are no public reports of arbitration or mediation proceedings occurring in respect of competition law disputes in Poland. C. Relief 13. Availability of damages and quantification The Polish Civil Code provides for compensation of two types of losses - damnum emergens (actual loss arising) and lucrum cessans (lost profits). An injured party has the right to sue for both, although a claim is restricted to monetary compensation when restitution is impossible, or could involve excessive difficulties or costs for the defendant. The damages awarded are designed to restore the claimant to the position in which it would have been had the breach not been committed. Accordingly, damages cannot exceed the amount of loss actually incurred by the claimant. A "passing-on" defence does not exist in the Polish legal system. However, it should be emphasised that the principle of compensatio lucri cum damno has a similar effect upon the amount of damages recoverable by an injured party. According to this principle, and as noted above, the damages awarded cannot exceed the amount of loss incurred so, if passed on, no recoverable loss can in fact be demonstrated by the claimant. Interest is available and is applied from the date of lodging suit. 14. Punitive and exemplary damages Punitive or exemplary damages are not available under Polish law. 4 Baker & McKenzie

7 15. Availability of interim or final injunctions in respect of an alleged competition law infringement An interim injunction may be granted without notice in circumstances where a claim is established as having potential basis and it is likely that, in the absence of an interim injunction, it will be impossible or extremely difficult to enforce the judgment or achieve the objective of the proceedings. Under Polish law, an interim injunction may be granted prior to proceedings being commenced. However, if an interim injunction is granted in such circumstances, a statement of claim must be issued within two weeks. On issue of the claim, the circumstances justifying the motion must be substantiated and the court will decide whether the injunction may be justified on an ongoing basis. 16. Other types of relief There are no other types of relief available to claimants. D. Emerging Trends No actions for damages resulting from infringement of competition law have yet been publicly reported as issued in Poland. Without changes to the Polish Civil Code and the Civil Procedures Code (or the overarching European regime) to address some of the difficulties in bringing such actions, particularly in respect of burden of proof and causation, significant growth seems unlikely. Baker & McKenzie 5

8 Global Guide to Competition Litigation - Poland Contact Information Marcin Kolasiński Phone: Katarzyna Mrzygłód Phone: Baker & McKenzie

9 Baker & McKenzie has been global since inception. Being global is part of our DNA. Our difference is the way we think, work and behave we combine an instinctively global perspective with a genuinely multicultural approach, enabled by collaborative relationships and yielding practical, innovative advice. Serving our clients with more than 3,800 lawyers in over 40 countries, we have a deep understanding of the culture of business the world over and are able to bring the talent and experience needed to navigate complexity across practices and borders with ease Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an office means an office of any such law firm. This may qualify as Attorney Advertising requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

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