Europe's top truck makers could face 100 billion euro cartel damages claim

Mon Nov 14, 2016 2:12am EST
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(This story corrects Bentham Europe ownership detail to show it is solely owned by Elliott Management.)

By Kirstin Ridley

LONDON (Reuters) - Litigation management company Bentham Europe plans to fund a potential 100 billion euro ($110 billion) damages claim against Europe's biggest truck makers after they admitted to operating a 14-year price cartel.

Bentham said on Monday it intends to back a group action on behalf of truck buyers who fell victim to the cartel involving Volvo (VOLVb.ST: Quote), Daimler (DAIGn.DE: Quote), Paccar's (PCAR.O: Quote) DAF, CNH Industrial's (CNHI.MI: Quote) Iveco and Volkswagen's (VOWG_p.DE: Quote) MAN.

Four truck makers were fined a record 2.9 billion euros by EU regulators in July for price fixing and passing on to customers the costs of complying with stricter emission rules.

Volkswagen's MAN escaped a fine after it blew the whistle, but all five conceded that they had operated a cartel between 1997 and 2011 apart from VW stablemate Scania, which remains under investigation.

Bentham Europe, owned by funds managed by U.S. investment firm Elliott Management, estimates that 10 million trucks were sold across the EU in the period and that each one was overpriced by about 10,500 euros.

Bentham, which is also funding shareholder lawsuits against British supermarket chain Tesco and VW, said that it is too soon to announce which law firm would bring its proposed claim or in which European jurisdiction it would be filed.

Third-party litigation funding has become increasingly mainstream in the UK over the past seven years. Funders offer to pay for lawsuits in exchange for a share of any payout and returns can be sizeable, but it is a high-risk business and payments for successful claims can take years to materialize.   Continued...

The logo of Swedish truck maker Volvo is pictured at the IAA truck show in Hanover, September 22,  2016.  REUTERS/Fabian Bimmer