The 2013/07/16 at 08:59
Marie Luginsland, in Germany
Keen to boost consumer rights, Europe is advocating a new defensive tool: the class action suit. Europeans who are fans of American political thrillers may already be familiar with this practice, but until now, it has been unseen on the Old Continent.
By raising the possibility of introducing class action suits, Brussels is driving a change in European legal traditions according to which legal action is undertaken on an individual basis.
If the European Union made the recommendation, on 11 June, that its Member States take on collective action mechanisms in the next two years, it is because it wishes to facilitate access to justice for a majority of citizens, primarily in domains such as consumer protection, competition, environmental protection and financial services.
However, national mechanisms will remain sovereign and the sole goal of the recommendation is to homogenise the approach to collective action. “Our initiative aims to bring more coherence when EU law is at stake,” declares Vice-President of the European Commission Viviane Reding, also the EU’s Justice Commissioner.
À la française
France, which in November 2012 carried out a large public consultation under the aegis of the Directorate General of Competition, Consumption and the Repression of Fraud (DGCCRF), has already anticipated this development. The French nation has marked out class action as a key measure in the Draft Bill on Consumption voted in by the National Assembly on 3 July. For the French government, it is a matter of “rebalancing power between consumers and professionals, re-establishing a form of equality of arms between economic players, and acting on the fixed costs of French people in order to release disposable income.”
Class action suits à la française are to allow “a large number of consumers wronged by the one economic operator to carry out collective legal action to obtain damages for the prejudice undergone,” specifies Benoît Hamon, Minister for the Social Economy and Consumption. He adds that “at this point in time, there exists no adapted procedure”.
Meanwhile, Marisol Touraine, Minister for Social Affairs and Health, has declared that she is “in favour of associations undertaking class action suits in the domain of health with specific rules taking into account the fact that our bodies and health are affected. This will represent a major democratic advance.”
She has also indicated that a system to provide for this need will emerge at the start of 2014 in a draft bill specifically for the health sector. In any case, class action suits, whether French or European, will not be mere copies of the American model.
Protection for SMEs
The European Commission has also reiterated its desire to “improve access to justice while ensuring appropriate procedural guarantees to avoid abusive litigation”.
So it is out of the question for Brussels to set up a “US-style system of class actions and the risk of frivolous claims and abusive litigation”. Indeed, the reference of the US model worries businesses that see this new development as opening the door to abusive situations. “Specialised law firms will wallow in these practices that have no origins in our culture or our trade practices. We can expect to see recourse to justice for damages and interest,” declares Stephan Wernicke, a lawyer at DIHK, the German federation of Chambers of Commerce and Industry.
Tonio Borg, European Consumer Policy Commissioner, counters this criticism by saying that “Member States should ensure that the collective redress procedures are fair, equitable, timely and not prohibitively expensive.” In this way, contrary to the case of the United States, Member States are not to authorise, for example, contingency fee arrangements that are likely to encourage abusive legal procedures. In addition, the bodies representing claimants should be non-profit organisations. In addition, the system should benefit enterprises, in particular SMEs, which, as EU Vice-President Joaquín Almunia, in charge of competition policy, recalls, “often face strong obstacles in obtaining effective compensation”. Chamber bodies may therefore overcome their reserves about the new system by envisaging class actions as a new tool for defending businesses.