New Era Of Collective Actions In Europe?

Despite 20 years of robust legislative activity in the field of consumer protection and the 2013 European Commission recommendation on collective redress mechanisms, a harmonized approach to collective redress such as group or class actions does not exist throughout the European Union. That may change if the European Commission's "New Deal for Consumers" is adopted; the legislative package, published on April 11, 2018, introduces, in a proposal for a directive, an EU-wide compensatory redress mechanism to protect the collective interests of consumers. The proposed directive is currently being discussed by the European Council, in particular its Working Party on Consumer Protection and Information, and member states are providing their opinions.

The Commission cited large-scale cross-border infringements of EU consumer law such as the Volkswagen diesel emissions case — which reportedly affected over 8 million consumers across various EU member states and saw compensation offered to U.S. but not EU consumers — and the rise of economic globalization and digitalization as examples of the difficulties consumers face when seeking to claim collective redress across unharmonized redress regimes in the 28 EU member states.

Background

The EU has a comprehensive set of consumer rights in place, and all member states have collective redress available for infringements of consumer law in the form of injunctive relief under the Injunctions Directive 2009/22/EC. However, compensatory collective redress (i.e., damages) is not presently available in all member states, and where it is an option, it is often limited to specific sectors (generally those where claims are made by consumers). The European Commission's January 2018 report on the subject concluded that where collective redress was available, it was underused, including due to rigid conditions set out in national legislation, the lengthy nature of procedures and the perceived excess in costs in relation to the expected benefits.

Compensatory collective redress is not presently available in all member states, and where it is an option, it is often limited to specific sectors.

Each member state has its own approach. In the United Kingdom, for example, individual consumers might together seek a "group litigation order" (as car owners suing Volkswagen did in connection with the so-called "Dieselgate" emissions litigation) or, for a competition law claim, a collective proceedings order from the...