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COLLECTIVE REDRESS IN EUROPE: MOVING FORWARD OR TREADING WATER?

Published online by Cambridge University Press:  02 May 2022

Duncan Fairgrieve  and
Rhonson Salim
Duncan Fairgrieve
Affiliation:
Senior Research Fellow in Comparative Law and Director of the Product Liability Forum, British Institute of International and Comparative Law, d.fairgrieve@biicl.org.
Rhonson Salim
Affiliation:
Lecturer, Aston Law School, r.salim@aston.ac.uk.
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Abstract

The recent Representative Actions Directive 2020/1828/EC is a welcome advance in developing collective redress in Europe. However, this article contends that whilst the Directive is a positive development, shortfalls in its design restrict its potentially transformative impact for consumers. Critical examination is made of the Directive's rules on scope, standing, remedies, alternative dispute resolution (ADR), cross-border claims, funding, awareness and the provision of information. The article further considers whether the Directive will serve to improve co-ordination in civil procedure in this area which has traditionally been very diverse at a Member State level.

Keywords

EU lawRepresentative Actions Directivecollective redressconsumer redress
Type
Shorter Articles
Information
International & Comparative Law Quarterly , Volume 71 , Issue 2 , April 2022 , pp. 465 - 479
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press for the British Institute of International and Comparative Law

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References

1 Reference will also be made in this article to both English and Scottish law, as the United Kingdom, whilst no longer part of the EU, still remains highly influenced by European law due to its long membership of the EU, as well as the incorporation of EU law instruments domestically as part of retained EU law. It is to be noted, however, that the UK has not adopted the EU Representative Actions Directive 2020/1828/EC.

2 For a good overview of the history of EU involvement in collective redress, see Opinion of the European Economic and Social Committee on Defining the collective actions system and its role in the context of Community consumer law [2008] OJ C162/1.

3 Commission, ‘Supplementary Communication from the Commission on Consumer Redress’ COM(87) 210 final, 3. See also the European Commission's seminal publication in 1985, A New Impetus for Consumer Protection Policy, and the Council of Europe's Recommendation No R(81)2 of 1981 on the legal protection of the collective interest of consumers.

4 Commission, ‘Three Year Action Plan of Consumer Policy’ COM(90) 98 final, 15. See also Opinion of the European Economic and Social Committee on access of consumers to justice and the settlement of consumer disputes in the Single Market [1994] OJ C295/1, conclusion (m).

5 Directive 98/27 of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers’ interests [1998] OJ L166/51.

6 See eg Parcu, P, Monti, G and Botta, M, Private Enforcement of EU Competition Law: The Impact of the Damages Directive (Edward Elgar 2018)CrossRefGoogle Scholar.

7 See eg Commission, ‘EU Consumer Policy strategy 2007–2013: Empowering consumers, enhancing their welfare, effectively protecting them’ COM(2007) 99 final, point 5.3.

8 Both DG-SANCO and DG Competition were active in this area, see the following: Commission, ‘Green Paper: Damages actions for breach of the EC antitrust rules’ COM(2005) 672 final; Commission, ‘White Paper on Damages actions for breach of the EC antitrust rules’ COM(2008) 165 final; Commission, ‘Green Paper on Consumer Collective Redress’ COM(2008) 794 final.

9 See Howells, G and Wilhelmsson, T, EC Consumer Law (Dartmouth 1997)Google Scholar and Weatherill, S, EU Consumer Law and Policy (Edward Elgar 2005)CrossRefGoogle Scholar.

10 Commission, ‘EU Consumer Policy Strategy 2007–2013’ COM(2007) 99 final.

11 Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law [2013] OJ L201/60. The Recommendation was accompanied by a Communication on collective redress mechanisms in Member States, setting out the Commission's position on a range of key issues.

12 E Lein et al., ‘State of Collective Redress in the EU in the Context of the Implementation of the Commission Recommendation’ (BIICL 2017).

13 Commission, ‘Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the implementation of the Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union law (2013/396/EU)’ COM(2018) 40 final.

14 The Commission published its ‘Fitness Check of Consumer and Marketing Law’ on 29 May 2017 (SWD(2017) 209 final). The report presented an analysis of EU consumer and marketing rules and identified that enforcement needed to be improved.

15 Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC [2020] OJ L409/1.

16 An exception is the Netherlands where, under the new Collective Damages Act (Wet Afwikkeling Massaschade in Collectieve Actie) (WAMCA), which entered into force in January 2020, there are no restrictions on the subject matter of claims that can be brought or settled collectively. It thereby develops the previous Dutch collective settlement scheme, Wet Collectieve Afwikkeling Massaschade (WCAM). See, generally, Tzankova, I and Kramer, X, ‘From Injunction and Settlement to Action: Collective redress and Funding in the Netherlands’ in Uzelac, A and Voet, S, Class Actions in Europe: Holy Grail or a Wrong Trail? (Springer 2021)Google Scholar.

17 A collective redress procedure for consumer claims was introduced in France in 2014 (Loi Hamon) and has since been extended on a number of occasions, so as to encompass claims in the spheres of the environment, pharma, data and discrimination claims.

18 See (n 16).

19 The reform of the Belgian Code of Economic Law in 2014 made actions for collective redress available in consumer cases such as product liability, data, financial services, as well as competition law, IP matters and certain regulated industries, such as natural gas and electricity. This was extended in 2019 to the protection of human rights or fundamental freedoms recognised by the Belgian Constitution.

20 Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers’ interests [2009] OJ L110/30.

21 Directive (EU) 2020/1828 (n 15) art 3.

22 Recital 7 of Commission Recommendation of 11 June 2013 (n 11).

23 The main exception being the Dutch scheme: see (n 16).

24 See (n 17).

25 Directive (EU) 2020/1828 (n 15) art 3(5). On standing in collective redress generally, see I Tzankova, ‘Collective and Mass Litigation in Europe: Model Rules for Effective Dispute Resolution’ in A Stadler, E Jeuland and V Smith (eds), Collective and Mass Litigation in Europe (Edward Elgar 2020).

26 Directive (EU) 2020/1828 (n 15) arts 3(10) and 9(1).

27 See eg Fairgrieve, D and Howells, G, ‘Collective Redress Procedures: European Debates’ (2009) 58 ICLQ 379CrossRefGoogle Scholar.

28 See France (n 17) and Belgium (n 19).

29 Directive (EU) 2020/1828 (n 15) art 4(4).

30 For a perspective on this, see D Freiin von Enzberg and K Bär, ‘The EU Directive on Consumer Representative Actions Enters into Force’ (TaylorWessing, 29 January 2021) <www.taylorwessing.com/en/insights-and-events/insights/2021/01/the-eu-directive-on-consumer-representative-actions-enters-into-force>.

31 Directive (EU) 2020/1828 (n 15) Recitals 23 and 31.

32 ibid Recital 23.

33 ibid art 3(7).

34 ibid art 4(3)(a).

35 ibid art 4(3)(c).

36 It is also stipulated that the entities ‘should be independent and should not be influenced by persons other than consumers who have an economic interest in the bringing of a representative action, in particular by traders or hedge funds, including in the event of funding by third parties. Qualified entities should have established procedures to prevent such influence as well as to prevent conflicts of interest between themselves, their funding providers and the interests of consumers.’ (ibid Recital 25).

37 ibid art 4(3)(e).

38 ibid art 5.

39 ibid art 6(1).

40 It is, however, possible for a Member State to examine whether the purpose of the qualified entity is justified in specific cases—ibid Recital 32

41 ibid Recital 23.

42 P Gosselin and L Vichnievsky, ‘Rapport d'Information sur le bilan et les perspectives des actions de groupe’ (Registered with the Presidency of the Assemblée Nationale, 11 June 2020) 13.

43 Note that only 30 class actions have been commenced in France since 2014; three have been settled and six others were dismissed at first instance. No company has yet been found liable under the procedure. Generally, see M-J Azar-Baud, ‘30 : le nombre d'actions de groupe introduites à ce jour en France’ (Revue Lamy : Droit civil, October 2021).

44 Proposition de Loi pour un Nouveau Régime de l'Action de Groupe (15 September 2020).

45 Directive (EU) 2020/1828 (n 15) art 12(1).

46 Gosselin and Vichnievsky (n 42) 32.

47 Section 606ff of the German Code of Civil Procedure (Zivilprozessordnung, ZPO).

48 Freiin von Enzberg and Bär (n 30).

49 Directive (EU) 2020/1828 (n 15) art 7(4).

50 Directive 2009/22/EC (n 20).

51 Directive (EU) 2020/1828 (n 15) arts 3(10) and 9(1).

52 ibid art 9(6).

53 As noted by the Commission, compensatory collective redress is available in only 19 Member States (but in over half of them it is limited to specific sectors, mainly to consumer claims). See COM(2018) 40 final (n 13).

54 Directive (EU) 2020/1828 (n 15) Recital 43.

55 ibid art 8(3).

56 Azar-Baud, M-J, ‘Allegro ma non troppo (à propos de la transposition en France de la directive sur les actions représentatives en protection des intérêts collectifs des consommateurs)’ (2021) 4 Recueil Dalloz 232Google Scholar.

57 ibid.

58 Each Member State is left to determine this, which is in line with the Directive's drive for balance between procedural autonomy and harmonisation.

59 Directive (EU) 2020/1828 (n 15) art 9(3).

60 See WAMCA (n 16) and art 1018f (1) and (5) DCCP in the Netherlands. This is also the approach in the UK.

61 Commission Recommendation of 11 June 2013 (n 11) paras 25 and 26.

62 Directive (EU) 2020/1828 (n 15) Recital 54 and art 11.

63 Addressed in para 27 of the Commission Recommendation of 11 June 2013 (n 11). Article 16 of the Directive is silent on limitation periods and their applicability to pre-trial ADR.

64 See eg the WCAM in the Netherlands (n 16) and the collective procedures in France (n 17) and Belgium (n 19).

65 See eg E Onţanu, ‘Court and Out-of-Court Procedures: In Search of a Comprehensive Framework for Consumers’ Access to Justice in Cross-Border Litigation’ in L Cadiet, B Hess, M Requejo Isidro (eds) Privatizing Dispute Resolution (Nomos 2019) 47.

66 Directive (EU) 2020/1828 (n 15) Recitals 20 and 23 and art 3(7).

67 ibid (emphasis added). See also ibid Recital 32. This power seems analogous to an exequatur for standing.

68 Lein et al., ‘State of Collective Redress in the EU in the Context of the Implementation of the Commission Recommendation’ (n 12) 21.

69 Directive (EU) 2020/1828 (n 15) Recital 12.

70 Recital 21 makes clear that the Directive does not affect the application of the rules on private international law. For further discussion, see H Muir Watt, ‘The Trouble with Cross-Border Collective Redress: Issues and Difficulties’ in D Fairgrieve and E Lein, Extraterritoriality and Collective Redress (Oxford University Press 2012).

71 See E Lein, ‘Cross-Border Collective Redress and Jurisdiction under Brussels I: A Mismatch’ in Fairgrieve and Lein (ibid) 141 and F Rielaender, ‘Aligning the Brussels Regime with the Representative Actions Directive’ (2021) ICLQ 1.

72 Article 7(6) of the Directive explicitly refers to the qualified entity as the claimant in proceedings. See also Recital 36.

73 Article 18 is an explicit forum actoris for consumers. On preclusion of representative organisations from utilising this base of jurisdiction: Case C-167/00 Henkel EU:C:2002:555, para 33 and Case C-89/91 Shearson Lehman Hutton [1993] ECR I-139. Additionally, a requirement of Section 4 is a contractual relationship between the consumer and the defendant.

74 See Case C-498/16 Schrems EU:C:2018:37, paras 44–45. The CJEU took the view that the consumer is protected by the provisions of Section 4 only in so far as he is, in his personal capacity, the plaintiff.

75 Case C-21/76 Handelskwekerij GJ Bier BV v Mines de potasse d'Alsace SA [1976] ECR 01735. See also Recital 16 of Brussels Ibis.

76 See eg Case C-343/19 Verein für Konsumenteninformation EU:C:2020:253.

77 Case C-364/93 Marinari EU:C:1995:289. In Case C-68/93 Shevill EU:C:1995:61, the rationale for this position is that the court is territorially the best placed to assess the delict committed in that State ‘and to determine the extent of the corresponding damage’ (para 31). See also A Pato, Jurisdiction and Cross-Border Collective Redress (Hart 2019) who argues that Article 7(2) enables representative entities to bring injunctive actions for the protection of indivisible consumer interests in the State where they are established (at 205).

78 See P Jiménez Blanco, ‘El tratamiento de las acciones colectivas en materia de consumidores en el Convenio de Brusselas’ (2003) 5709 Diario La Ley 1574 who advocates for the focus of Article 18 to be on the issue at stake rather than the nature of the relationship between the parties. See an additional argument on the liberalisation of interpretation of Article 18 to enable representative entity use in P Mankowski and P Arnt Nielsen, ‘Introduction to Articles 17–19’ in U Magnus and P Mankowski (eds), Brussels Ibis Regulation: Commentary (Otto Schmidt 2016) 451 and M Danov, ‘The Brussels I Regulation: Cross-Border Collective Redress Proceedings and Judgments’ (2010) 6(2) JPrivIntL 359, 376.

79 See Smith, M and Leslie, N, The Law of Assignment (2nd edn, Oxford University Press 2018) Ch 11Google Scholar.

80 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC [2016] OJ L119/1 (GDPR).

81 ibid art 80.

82 Article 80(1) sets down the requirements for a representative organisation/body, association to act. As the GDPR is included in Annex 1 of the Directive, it is arguable that the stricter standing requirements in Article 4 of the Directive would apply to representative bodies under the GDPR bringing a cross-border claim. The organisation may act pursuant to a mandate from the data subject (Article 80 (1)) or based on an empowerment from a Member State to independently act without a data subject's mandate (Article 80 (2)). It is recognised that a limitation on the representative body's ability to claim compensatory damages exists—it would be dependent upon the law of each Member State.

83 Unless the controller or processor is a public authority acting in the exercise of its public powers (GDPR (n 80) art 79(2) (emphasis added)). Recital 147 of the GDPR confirms that the GDPR provisions are a lex specialis, regardless of the jurisdictional rules under Brussels Ibis.

84 Commission Recommendation of 11 June 2013 (n 11) arts 14–16.

85 Directive (EU) 2020/1828 (n 15) art 10, and see also Recital 25.

86 M Napier et al., ‘Code of Conduct for Litigation Funders’ (Civil Justice Council, January 2018)

87 Directive (EU) 2020/1828 (n 15) art 4(3)(f).

88 ibid art 10(3).

89 Such as Ireland, due to operation of the maintenance and champerty rules under the Maintenance and Embracery Act (Ireland) 1634.

90 The loser pays rule is subject to the provision that it is applied ‘in accordance with conditions and exceptions provided for in national law applicable to court proceedings in general’ (Directive (EU) 2020/1828 (n 15) art 12(1)).

91 Under Article 700 of the French Code de Procédure Civile.

92 It is to be noted that Article 20 obligates Member States to take measures to assist qualified entities in financing the bringing of claims under the Directive, albeit that this is expressed in very general terms.

93 See Commission Recommendation of 11 June 2013 (n 11) para 10.

94 COM(2018) 40 final (n 13) para. 2.1.4.

95 Directive (EU) 2020/1828 (n 15) Recitals 58, 59 and 62.

96 ibid Recital 58. The Directive accepts that the level of detail of the information required could vary according to the measure being sought and/or whether the mechanism is opt-in or opt-out.

97 ibid Recital 61.

98 ibid art 18. Recital 69 also suggests procedural measures for refusal to comply with a disclosure order.

99 ibid art 23(3) and Recital 73.

100 An example of an ombudsman-type mechanism at a domestic level is the German Ombudsstelle which was created following a settlement between Volkswagen and the Verbraucherzentrale Bundesverband (a consumer organisation) to facilitate the payment of compensation to German consumers following the VW dieselgate scandal: see ‘Ombudsstelle für VW-Vergleich’ (Verbraucherzentrale Bundesverband, 19 March 2020).

101 Directive (EU) 2020/1828 (n 15) Recital 31.

102 ibid Recitals 11 and 12.

103 See eg the Croatian legal system in Lein et al., ‘State of Collective Redress in the EU in the Context of the Implementation of the Commission Recommendation’ (n 12).