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BackEuropean consumer organisations have been demanding a legal framework to introduce class action for years. Collective redress shall make things easier for claimants: if for example, several consumers have suffered the same damage by a service or product supplied by a company, they can take class action rather than having to bring individual lawsuits. Such a legal instrument would significantly increase the pressure on companies with dubious business practices. The only fly in the ointment concerning the initiative of the Commission: this is only a non-binding recommendation to the EU Member States; a binding legal act is not in the offering.
This week now, the Commission has published the recommendation on introducing collective class action procedures. These shall apply in areas, where EU laws guarantee EU citizens and companies rights, in particular in respect of consumer protection, competition, environmental protection and financial services. The proposal to the Member States contains several principles. According to the European Commission, collective redress shall be fair, just, swift and affordable. It advises against success-related fees; instead organisations that represent claimants should be non-profit making.
Why the Commission has issued only one recommendation is explained with different legal traditions concerning collective redress, which the Commission wants to respect. Respect which, however, the Commission has not mustered in relation to implementing its own EU Sales Law – against the wishes of consumers as well as large parts of the economy. The now published text by the Commission on collective redress is a very small step in the right direction; however, without binding laws it will just remain toothless paper tiger.
Why the Commission has issued only one recommendation is explained with different legal traditions concerning collective redress, which the Commission wants to respect. Respect which, however, the Commission has not mustered in relation to implementing its own EU Sales Law – against the wishes of consumers as well as large parts of the economy. The now published text by the Commission on collective redress is a very small step in the right direction; however, without binding laws it will just remain toothless paper tiger.