Articles

Romanian Chapter in “Private Antitrust Litigation 2012”

Published in “Getting the Deal Through – Private Antitrust Litigation 2012”

Legislation and jurisdiction

1 How would you summarise the development of private antitrust litigation?

Romania has not yet acquired practical experience in terms of private antitrust litigation, although recent legislative developments (amendment of the Competition Law No. 21/1996 by the Government Emergency Ordinance No. 75/2010 in July 2010 and by the Law No. 149/2011 in July 2011, together with the new Civil Procedure Code, expected to come into force soon) support private actions for damages.

Despite the possibility of obtaining compensation for damages, often potential claimants do not take cases to court, due to a series of obstacles (such as the costs and length of litigation, the difficulty of proving a proper causal link between the damage and the breach of competition law, and national courts’ limited experience in antitrust matters).

2 Are private antitrust actions mandated by statute? If not, on what basis are they possible?

To ensure the full effectiveness of competition rules, the Competition Law provides that any person may seek compensation for losses suffered due to a contract or conduct liable to restrict or affect competition; in addition, the tort liability regime under the Romanian Civil Code mandates antitrust actions for damages by providing that any person harmed by way of an illicit deed is entitled to compensation.

3 If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?

The relevant legislation applicable to private actions consists of the Romanian Competition Law No. 21/1996, the Civil Procedure Code and the Civil Code.

With regard to the subject-matter jurisdiction, the current Civil Procedure Code provides that ordinary courts shall settle all matters of little value and/or minor complexity; however, in practice, tribunals will frequently become courts with full competence to settle matters on their merits in the first instance, courts of appeal will settle the first appeals brought against the decisions of first instance, and the High Court of Cassation and Justice will become the court of common law settling the second appeals. This trend is also maintained by the new Civil Procedure Code which is soon to enter into force.

4 In what types of antitrust matters are private actions available?

The national courts are empowered to rule upon the claims of individuals and undertakings in relation to all types of antitrust matters, such as infringements of articles 5 (cartels and other agreements restrictive of competition) and 6 (abuse of dominance) of the Romanian Competition Law and articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

5 What nexus with the jurisdiction is required to found a private action? To what extent can the parties influence in which jurisdiction a claim will be heard?

As a matter of principle, the claimant has to address his or her claim to the competent court of the judicial district of the place of residence or of the registered office of the defendant. In actions based on tort liability (all actions concerning damages resulting from anti-competitive conduct), the plaintiff may also bring the action before the court where the anti-competitive practice has taken place.

In terms of subject-matter jurisdiction, the jurisdiction depends on the value of the claim. According to the Romanian Civil Procedural Code, in civil lawsuits, if the value of the claim exceeds lei 500,000, the County Tribunal is competent as first instance. As regards commercial matters, County Tribunals are competent to settle, as the court of first instance, commercial claims exceeding lei 100,000, as well as non-pecuniary commercial matters.

In terms of jurisdiction, Romania is currently a party to the revised Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters; also, as Romania is an EU member state, the Rome II Regulation (EC) No. 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations is applicable.

As such, the relevant nexus required to found a private action is the place where the harmful event occurred.

The parties cannot therefore influence the jurisdiction in which a claim will be heard, outside the generally applicable rules described above.

6 Can private actions be brought against both corporations and individuals, including those from other jurisdictions?

Private actions can be brought against both corporations and individuals. Individuals or corporations from other jurisdictions may generally be sued in Romania, the principle being that the actions filed in order to obtain compensation based on illegitimate restriction of competition shall be governed by the laws of the state where the damage occurred. Law No. 105/1992 regarding private international law relationships or the bilateral or multilateral treaties on jurisdiction may apply, depending on the nationality of the parties involved.

Private action procedure

7 May litigation be funded by third parties? Are contingency fees available?

There are no provisions prohibiting third-party financing of litigation, but such financing has not yet been seen in Romania. As to contingency fees, although success fees are allowed under Romanian law, it is forbidden to conclude a legal assistance agreement – prior to the final resolution of the matter – which establishes the entire amount of the attorney’s fees depending on the judicial outcome of the matter, regardless of whether those fees represent money, a product or a different value. Such agreements are also known as quota litis pacts and are expressly prohibited by the Romanian Statute of the Lawyers Profession.

8 Are jury trials available?

Not applicable.

9 What pre-trial discovery procedures are available?

There is no such instrument as pre-trial discovery, as it is known in the US, under Romanian procedural rules. However, the Romanian Civil Procedure Code currently in force provides for a procedure for the preservation of evidence that is considered to be a kind of in futurum enquiry, which may be requested either before an actual claim is lodged before a court or during the court proceedings. Any person who has an interest may request a court order for the urgent ascertaining of a person’s testimony, the point of view of an expert, the state of certain movable or immovable assets, for documents to be recognised or for a state of facts to be ascertained, if there is a threat that such evidence may disappear at a later stage.

In addition, during the course of the litigation, the court is entitled to order each of the parties to the proceedings to disclose the documents required for settling the dispute. Under specific conditions, a party may also request that the court orders the other party to disclose a certain document. The Romanian Civil Procedure Code provides that the court is compelled to take into consideration this kind of request in the following circumstances: the document emanates from both parties; the opponent itself referred to it during the proceedings; or a legal provision expressly provides for the opponent’s obligation to disclose such document. Non-disclosure of written evidence by the party holding such evidence within the term fixed by the court may be sanctioned by applying a judicial fine.

10 What evidence is admissible?

As a matter of principle, in order for evidence to be deemed admissible it has to be permitted by law, plausible (not seeking to prove an impossible fact), relevant (in connection to the subject matter of the case) and conclusive (related to circumstances that are able to solve the case).

In particular, the following evidence is admissible: statements of the parties, testimonies of witnesses, inspections or parties, independent experts’ opinions and, as a general rule, written documents. In practice, in order to determine/clarify the status of facts (de facto situation), the court usually requests an expert’s appraisal.

The Romanian Civil Code provides for certain limitations in relation to the possibility to use witness statements in order to prove judicial deeds in civil cases worth more than a certain amount of money and requiring written evidence.

In addition to the general civil rules referred to above, the Romanian Competition Law provides that in cases where a Competition Council decision sanctions an anticompetitive practice, the courts may ask the Competition Council for the documents in the file that was the basis for issuing that decision when settling claims for compensation.

To this end, in receiving these documents, the courts will enforce the confidentiality of information constituting trade secrets and other information classified as confidential. The Competition Council may submit observations to national courts on matters concerning the application of articles 5 and 6 of the Competition Law, as provided in the Romanian Civil Procedure Code.

11 What evidence is protected by legal privilege?

Under general procedural rules, the court will dismiss a request seeking disclosure of a document in the following cases: the document concerns strictly personal matters, or disclosure of the document would infringe a confidentiality obligation or would trigger the criminal prosecution of the party or another person, or could expose it to public contempt.

According to the statute regarding organisation of the Lawyers’ Profession, attorneys are bound to preserve the secrecy and confidentiality of their activities. Professional secrecy covers any form of information or support provided by the client to the attorney with the aim of receiving legal assistance and with respect to which the client has requested the preservation of confidentiality, as well as any documents drafted by the attorney containing information provided to the client for the same purpose and which the client has requested be kept confidential.

Written documents or goods held by the attorney may only be taken by a prosecuting officer, on the basis of a mandate issued according to the law.

According to the recent amendments brought to the Competition Law, the following two categories of documents may not be collected or used as evidence during the investigation procedures performed by the Competition Council:

• communications between the undertaking/association of undertakings and their lawyers belonging to a bar association accomplished within and for the exclusive purpose of exercising the rights of defence (either before or after the initiation of the investigation);
• Preparatory documents drafted by the undertaking or the association of undertakings for the exclusive purpose of exercising the rights of defence.

Should undertakings fail to prove the protected nature of a certain communication, competition inspectors shall seal and collect the communication, with a decision being subsequently issued in this respect by the President of the Competition Council. Should the decision also reject the protected nature of the communication, the seals may only be removed after the expiry of the term allowed for challenging the decision or after the decision of the court becomes final and binding. The undertaking concerned can challenge before the Bucharest Court of Appeal the decision of the president of the Competition Council regarding the protected nature of such document within 15 days from the date such decision is communicated to it; the decision of the Court of Appeal is subject to a final appeal within five days from the communication of such court decision to the undertaking.

Trade secrets are subject to the usual confidentiality obligations under competition rules regarding access to the file.

12 Are private actions available where there has been a criminal conviction in respect of the same matter?

Romanian competition law provides that if a natural person participates with fraudulent intent and in a way decisive to the conception, organisation or performance of practices prohibited by article 5 of the Competition Law (cartels), and is not exempted, he or she has committed a criminal offence. The respective person can be sanctioned with imprisonment for a term of between six months and four years, a fine, and prohibition from holding certain positions or fulfilling professions or activities of the nature of that used in committing the offence.

With respect to the frequency of criminal convictions for antitrust infringements, it is worth noting that the end of 2009 saw the first instance of the Romanian Competition Council referring a natural person to criminal investigation bodies. The former president of an association of undertakings was referred in the context of a cartel investigation conducted on the bread market in Romania and related markets.

In this context, private actions can also be available where there has been a criminal conviction. Note that if a criminal proceeding is pending, any civil court dealing with the same matter must stay proceedings until the criminal court renders a judgment.

13 Can the evidence or findings in criminal proceedings be relied on by plaintiffs in parallel private actions? Are leniency applicants protected from follow-on litigation?

According to the general Criminal Procedure rules, the civil courts are bound by the findings of the criminal courts only with regard to the existence of the punishable act, the identity of the offender and the form of guilt.

Regarding the influence of leniency applications on private antitrust litigation, Romanian competition law provides that the undertaking benefiting from immunity from a fine will not be held jointly liable for the damage caused through its participation in an anticompetitive practice prohibited by article 5 of the Romanian competition law and article 101 of the TFEU.

14 In which circumstances can a defendant petition the court for a stay of proceedings in a private antitrust action?

In the case of a civil claim filed in parallel with a complaint submitted to the Competition Council, the court has the option of suspending judgment on the file until the Council has concluded its investigation and issued a decision regarding the existence of the anti-competitive practice.

15 What is the applicable standard of proof for claimants and defendants?

The applicable standard of proof in private litigation is the preponderance or balance of probabilities. Under Romanian law, evidence has no pre-determined rank of importance: the court is free to appraise each piece of evidence by taking into consideration all the relevant circumstances of a specific case. According to the Latin principle of actori incumbit probation, the plaintiff has the burden of proof and is obliged to provide evidence in front of the court regarding all four elements that are to be cumulatively satisfied in order to ‘activate’ the civil tort liability: the illicit action; the damage; the causation between the damage and the illicit action; and the infringement author’s guilt.

If the defendant raises a counterclaim, the burden of proof is reversed and will be on the defendant.