European Union

COLLECTIVE REDRESS

The introduction of a law on collective redress – which could include a form of class action – at European Union (EU) level has been debated for many years. Having failed in previous attempts to propose legislation on collective redress, the European Commission, the executive arm of the EU, is again looking to introduce one or more collective redress mechanisms. The current European Commission, which took office in 2010, decided early on “to look into the issue of collective redress” and not abandon the idea.

The main argument used by the European Commission in order to justify a possible EU laws on collective redress is that access to justice needs to be increased – both for citizens and for businesses – and mass litigation would be a useful way of achieving this goal. The European Commission is therefore considering whether to propose laws which would oblige all 27 EU Member States to have specific procedural rules allowing for collective redress.

The main focus of the Commission’s work to date has been collective redress for breaches of EU anti-trust rules. However, it is increasingly likely that it will also come forward with additional collective redress laws for other areas, such as consumer protection, environmental liability or financial services.

Work within the European Commission is currently being led by the European Commission’s Directorate-General for Justice (DG JUSTICE), led by Commissioner Viviane Reding. DG JUSTICE is coordinating the work undertaken by all Directorates-General on the issue, such as DG Competition (DG COMP), headed by Commissioner Joaquín Almunia, and DG Health & Consumer Protection (DG SANCO), led by Commissioner John Dalli. Mr. Almunia announced recently that he would like to see the European Commission publish a legislative proposal for collective redress for breaches of EU anti-trust rules. While DG SANCO has in the past called for a collective redress mechanism, more recent work seems to focus more on how to improve access to out-of-court dispute resolution.

In order to decide on its next steps, the European Commission in February this year organized a public consultation in which it asked stakeholders for input on how collective redress might be developed in the EU including, in particular, the key principles that should guide the EU’s approach (see below for full and summary versions of the contribution prepared by ILR). The input received will feed into a statement from the Commission (expected towards the end of 2011). At that time, the Commission is expected to announce its intention to bring forward a legislative proposal on collective redress for breaches of EU anti-trust rules. Such a proposal will most likely be put forward in the course of 2012.

In parallel with this process, the European Parliament is currently working on an ‘own initiative’ report on the issue of collective redress. The leading draftsperson is Mr Klaus-Heiner Lehne, a Member of the European Parliament and the Chair of the Legal Affairs Committee.

ALTERNATIVE DISPUTE RESOLUTION

In addition to its activities on collective redress, the European Commission, and in particular DG SANCO, is increasingly focused on improving Alternative Dispute Resolution (ADR) in the European Union. ADRs purpose is to enable a consumer with a legitimate grievance to obtain fair compensation for harm suffered as a consequence of an illegal practice by a trader without needing to resort to court-based litigation. In order to further explore its options, DG SANCO published in January 2011 a public consultation in which it asked for stakeholder comments (see below for ILR’s contribution). DG SANCO has already announced that it intends to present a proposal for an EU Directive in order to promote ADR and increase consumer awareness of various ADR schemes in Europe.

ILR’S ACTIVITIES IN THE EU

ILR is deeply involved in EU developments concerning collective redress and ADR. In addition to advocating for business interests on the ground in Brussels (and in other major capitals such as Berlin, London and Paris), it has provided support to European business associations and contributed to both of the European Commission’s recent public consultations.

ILR’s full contribution to the consultation on collective redress can be accessed here. A shorter, summary version setting out ILR’s key messages and themes is also available for download here, as is ILR’s contribution to DG SANCO’s consultation on ADR.