More than 300,000 transactions, one action: Germany's highest civil court endorses assignment model

On July 28, the German Federal Court of Justice (FCJ) handed down its judgment in the round timber cartel litigation against the federal state of Baden-Württemberg (case number KZR 11/24 – Rundholz BW), overturning the Stuttgart Court of Appeals’ 2024 judgment and remanding the case for further proceedings.

The claimant has not yet won damages. But it has won a commercially important procedural and substantive battle: confirmation that, on the facts of this case, a registered collection-services provider may combine claims assigned by 36 businesses and arising from more than 300,000 transactions in a single action. Neither the scale of the portfolio nor the funding and fee agreements made the action abusive or the assignments invalid.

For decades, Baden-Württemberg’s forestry administration jointly marketed round timber from state-owned and municipal forests, conduct the Federal Cartel Office (FCO) found to infringe competition law in a 2015 decision. Thirty-six sawmills assigned claims arising from more than 300,000 timber purchases to ASG, a claimant vehicle funded by Burford. ASG seeks approximately €270 million in principal, plus interest.

Because German law provides no general class action mechanism, the assignment model remains the principal route to bundling claims of this kind, and it has been the defendant's primary defence since the claim was filed.

Key findings

The FCJ issued three official headnotes, all favorable to the claimant, and resolved a series of further issues in its favor:

• The assignment model stands and can work at scale: Bundling more than 300,000 claims assigned by 36 assignors in a single action is not an abuse of process. Unlike the truck cartel case decided earlier (KZR 6/24 – Sammelklage-Inkasso), the claims here are largely homogeneous and have been presented in an orderly, structured way that allows the court to resolve the dispute without examining each claim individually. The assignments were valid: Neither the bundling of claims nor the success-linked fee arrangement created a structural conflict of interest. The ruling is not a general approval of every mass assignment action; portfolio design remains decisive.
• Legal finance is no obstacle: Neither Burford's parent company nor its sister company has any legally relevant right to influence the conduct of the litigation. The FCJ also rejected the state's request for disclosure of the financing agreement.
• The state acted as an undertaking: Any entity offering goods on a market engages in economic activity within the meaning of Article 101(1) TFEU, regardless of profit motive or public interest objectives. The state action defense also failed: Neither federal nor state forestry legislation compelled the conduct at issue.
• The annulled 2015 FCO decision retains evidential value: The annulled 2015 decision has no binding effect and does not itself constitute evidence. The claimant may, however, adopt its factual account as substantiated party submissions because the decision was annulled for procedural reasons rather than because its factual findings were disproved. The civil court must still determine genuinely disputed facts independently.
• The limitation defence does not dispose of the historic claims: The claims are not barred under the knowledge-based limitation rules. The sawmills lacked the requisite knowledge that the bundled sale of round timber infringed Article 101 TFEU. Even assuming that the 2015 FCO decision provided that knowledge, limitation was suspended by the 2012 FCO proceedings, although their reopening was later held inadmissible. Questions affecting the oldest individual claims, including claims dating back to 1978, remain to be addressed on remand.
• Pleading historic transactions is now more practical: The FCJ reinstated two categories of claim the Court of Appeals had dismissed, holding that claimants need neither produce an invoice for every transaction nor identify every transaction individually. Cartel-affected purchases over a defined period may be substantiated by contemporaneous accounting records, such as annual financial statements, without identifying every individual transaction.

What happens next

The FCJ was equally clear that substantial work remains before damages can be determined. On remand, the Stuttgart Higher Regional Court must determine whether the arrangements restricted competition by object or effect across the relevant periods; whether the state acted with fault; whether the conduct caused an overcharge; what evidence establishes the relevant purchases; and quantum. The FCJ also made clear that the defendant’s economic evidence must be properly considered.

Why it matters

The judgment does not award a euro. What it does is remove or narrow several threshold arguments commonly used to stop a funded collective claim before the court reaches the economic merits: assignment validity, abuse of process, conflicts in the remuneration structure, funder control, funding-document disclosure, limitation and the pleading of historic transactions.

Coming 18 months after the European Court of Justice's landmark ruling on collective redress in antitrust damages, the FCJ’s judgment provides an important further development for claimants and legal finance providers: Endorsement of the assignment model from Germany's highest civil court, together with workable standards for pleading cartel-affectedness and substantiating damages, particularly for periods for which individual records are no longer available for every transaction.

The implications, therefore, extend beyond this litigation. The judgment is directly relevant to parallel round timber cartel proceedings against other German federal states still in progress and provides guidance for the aggregation, financing and pleading of antitrust damages claims in Germany more broadly.