Today the European Commission published a series of common, non-binding principles for collective redress mechanisms in the Member States. European consumers shall be empowered with tools to enforce their rights and obtain compensation for the harm caused by violations of EU law. The idea behind collective redress is that many single claims related to the same case will be bundled into a single court action. Collective redress needs to be clearly distinguished from "class actions" that are common under the US legal system.
So far collective redress procedures have been introduced only in some Member States but without cross-border elements. With the recommendations the Commission aims at ensuring a coherent horizontal approach to collective redress in the European Union without harmonising Member States' systems. National redress mechanisms should be available in different areas where EU law grants rights to citizens and companies, notably in consumer protection, competition, environment protection and financial services. However, the Directive leaves it to the Member States whether or not to introduce collective redress actions in the context of private enforcement of competition law.
The principles should ensure that Member States adopt a common approach:
- Private individuals and entities should seek court orders ceasing infringements of their rights granted by EU law (so called "injunctive relief") and to claim damages for harm caused by such infringements (so called "compensatory relief") in a situation where a large number of persons is harmed by the same illegal practice.
- Collective redress procedures are fair, equitable, timely and not prohibitively expensive.
- Procedural safeguards are recommended to avoid abuse. The entities which are representing claimants have to be of non-profit character to ensure that they are guided by the interests of those affected in situations of mass damages.
Monique Goyens, Director General of the European Consumer Organisation (BEUC) criticised: “It is a pity the European Commission has dragged its feet on this burning issue. The absence of a uniform collective redress mechanism has been a glaring omission of the Single Market for decades. 79% of European consumers have called for it, lamenting the fact their rights remain on paper.“ Moreover the recommendations by the Commission are not a binding measures which would oblige full legal uniformity across the EU, adds Goyens.
Gerd Billen, Executive Director of the Federation of German Consumer Organisations – vzbv embraces the proposal by the Commission as overdue: “The procedural barriers for consumers were way too high to enforce their rights, especially with regards to claims for damages.”
The European Commission will allow the Member States two years time to implement a consumer friendly legal enforcement system.
Source: European Commission