On January 28, 2025, the Grand Chamber of the Court of Justice of the European Union (CJEU) delivered a pivotal judgment (C-253/23, ASG 2 v. Land Nordrhein-Westfalen) that will have far-reaching implications for litigation funding and collective redress in the field of EU competition law. This decision addresses the conditions under which claimants harmed by anti-competitive conduct can assign their right to damages to legal service providers, enabling the bundling of claims—an issue central to mass harm and cartel damages actions.
Background of the Case
The case originated from a claim pursued by ASG 2 Ausgleichsgesellschaft für die Sägeindustrie Nordrhein-Westfalen GmbH (“ASG 2”) against the state of North Rhine-Westphalia (Germany) on behalf of several sawmills. These sawmills had transferred their claims for damages, resulting from an alleged illegal cartel in the raw timber market, to ASG 2, a legal service provider authorized under German law to recover claims on behalf of third parties in return for contingency-based compensation.
German law (the RDG—Rechtsdienstleistungsgesetz) governs the ability of legal service providers to recover assigned claims. While the German Federal Supreme Court previously supported similar collection models for small individual damages or consumer claims, their admissibility in antitrust mass harm cases—especially those not following a prior competition authority finding (“stand-alone” actions)—remained hotly contested.
Key Legal Questions
The Dortmund Regional Court referred crucial questions to the CJEU, asking whether EU law—including Article 101 TFEU, Directive 2014/104 on damages actions for competition law infringements, and Article 47 of the EU Charter of Fundamental Rights—prohibits national law from denying the assignment of damages claims to a legal services firm for aggregation and collective redress, especially when other effective means of joint prosecution are unavailable.
The Court ruled that EU law opposes national rules that effectively prohibit injured parties from assigning their claims for aggregated legal action by licensed legal service providers, if there are no alternative effective mechanisms for grouping individual claims that can guarantee the effective exercise of the right to compensation.
The decision specifically applies where litigation is especially complex, lengthy, or expensive (as in competition damage), making individual claims impractical or excessively difficult, thus undermining the right to judicial protection. If national law cannot be interpreted in a manner consistent with these EU requirements, the domestic courts must disregard those national provisions to preserve the full effectiveness of EU law and access to justice.
Implications for Litigation Funders
This ruling represents a major advance for collective redress and litigation funding in Europe because it established that mass assignment models and claim aggregation by specialized service providers, often backed by litigation funders, may not be automatically barred by restrictive national rules, even absent a prior regulatory infringement finding.
On the long run, this will facilitate greater opportunity for bundling claims in mass harm, cartel, or competition cases, using assignment and collection models; i.e., better chance to get proper justice.