price fixing Irish Trucker Sues Over Cartel

European truck manufacturers are accused of price fixing and face a landmark case as one lawyer representing truck customers uses the Irish courts to seek damages.
Truck cartel sees sun setting on price fixing.

 

John Lenaghan works hard for his money. He has been in the haulage business for more than 30 years, and in recent times has traveled regularly from Ireland to France and Germany in his DAF truck.

He leaves on Sunday evening, often not returning to his hometown of Ballyhaunis in Ireland before Saturday. “He spends 36 hours at home over the weekend, and then it’s back on the road,” said his lawyer Evan O'Dwyer.

There is a reason Mr. Lenaghan has a lawyer. He paid €87,350 (about $97,600) for his model XF530 truck from the Dutch manufacturer DAF in September 2005. He believes he overpaid by a few thousand, and has hired a lawyer to get some money back.

His case is based on a proven instance of price fixing.

Christopher Rother of the law firm Hausfeld, estimates there are total damages of €100 billion, or €10,000 per truck.

Between 1997 and 2011 DAF agreed prices with its competitors behind the scenes for trucks sold on the European market. Daimler, MAN, Volvo and Iveco were also involved in the cartel. At the end of July, the European Commission imposed fines of €3 billion on the companies. These record fines could increase still further, because one action against Scania is still underway. The Swedish subsidiary of Volkswagen is contesting the action.

According to the E.U. Commission, these illegal activities also had considerable effects on the economy. In the 14 years of the cartel’s existence around 10 million trucks were sold in Europe. Christopher Rother of the law firm Hausfeld estimates there are total damages of €100 billion, or €10,000 per truck.

Even in a worst-case scenario, the concerns will hardly have to pay that amount. But the cartel could still wind up costing the manufacturers billions. All over Europe lawyers like Hausfeld are preparing claims for damages against the truck manufacturers.

Mr. O'Dwyer is not what you would call a big player on the international legal scene. Up to now he represents a few dozen haulage firms, which between them have 250 trucks on the road – from all manufacturers. But the lawyer from the town of Ballyhaunis in the west of Ireland is the first in Europe to bring an action.

This was possible because of peculiarities in the Irish legal system. Unlike in Germany or France, the plaintiff only has to submit his claim. So while Mr. O'Dwyer’s colleagues in the rest of Europe are looking for evidence of the cartel, he can start proceedings.

He has now called for the manufacturers to let him have a copy of the E.U. Commission’s judgment with regard to the fine. This document is of course known to the cartel offenders, but their customers don’t get to see it. With this unilateral information policy, the E.U. Commission wants to protect those firms that helped to uncover the wrongdoing from financial damage. In the case of the truck cartel this was above all the VW subsidiary MAN, which gave the authorities information.

Mr. Lenaghan’s lawyer, Mr. O'Dwyer has now brought an action against all the cartel firms in the Dublin High Court, the second highest in the land. In the legal indictment, a copy of which Handelsblatt has obtained, it is argued that all the companies were guilty of damaging his client with their price-fixing policy. If Daimler, Volvo & co. don’t submit the papers he has called for, then Mr. O’Dywer can apply for them at court.

If the application is granted, then it would be an ideal situation for plaintiffs in other countries. In Ireland, these documents are usually published along with details of the court case, meaning every truck client has access to the papers and can use them to support claims for damages.

But first it has to be shown whether the cartel’s clients really were damaged. Daimler, Scania, DAF, Iveco and Volvo were not prepared to comment on the action. A spokesperson for MAN emphasized that there were no indications truck customers had suffered any financial disadvantages.

It should be known in a few months whether the companies or the trucker Mr Lenaghan are adjudged to be in the right. Another peculiarity of Irish law is that trials tend to be wound up quickly.

 

Martin Murphy specializes in the automotive, defense and steel industries. To contact the author: [email protected].