The European Commission’s public consultation on collective redress was published on Friday. Collective redress (often referred to as “class actions”) is a hot topic in the EU and is viewed by the Commission as an instrument to strengthen the enforcement of EU competition and consumer law. The drive towards a coherent European approach to collective redress stems from concerns about the diversity of existing national systems and a fear that national courts are ill-equipped to deal with mass individual claims triggered by breaches of EU law.
There are fears in the business community that the consultation could result in the adoption of US-style class actions, which create economic incentives for parties to bring a case to court even if, on the merits, it is not well founded. Those incentives include the availability of punitive damages, the absence of limitations on standing and the possibility of contingency fees for the lawyers involved.
The consultation seeks views on what added value an EU system of collective redress would bring, what laws should govern such a system and what safeguards can be used to prevent abusive litigation. We intend to submit a response to the consultation, the deadline for which is 30 April 2011, and would be interested to hear any comments or feedback that you might have.
On February 7, 2011