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BackThere has been an ongoing discussion for years at EU level on introducing European rules for collective redress. The European Commission has invited all interested citizens, organisations and corporations to give their opinion within the scope of a Consultation on collective redress. Apart from this, the Commission invited to a public hearing this week. With 350 participants attending, the interest was huge; apart from consumer organisations and public authorities, in particular lawyers and business organisations were extremely strongly represented. Especially corporate lobbyists and legal representatives were putting the brakes on: alternative dispute settlement procedures were much better; one would warn against USA-like conditions.
During the event, the Director General of the European Consumers' Organisation BEUC, Monique Goyens, criticised that one had been turning in circles for years with regard to collective legal protection. However, the time had come to take a step forward in the interest of consumers. Collective redress would be only one of the many instruments to implement consumer rights: consumers would look for other ways first to get their rights. However, a survey showed that 79 percent of all consumers concerned would go to court if the instrument of collective legal protection would exist. According to Goyens, this shows the great need for this measure. Public authorities should be encouraged to use the instrument of collective redress. Currently, there would be 14 Member States, who already had regulations on collective legal protection. Apart from that, a European system would help to solve cross-border cases easier.
Significantly more cautious was the representative of the EU business organisation Business Europe, Jérôme Chauvin. He demanded that the Commission took a coherent approach and emphasised that it was vital that consumers would gain access to legal resp. public authorities. Consumers wanted a quick solution; out-of-court paths had to be given preference. Apart from this, there would be instrument, which would not be adequately exploited, such as SOLVIT for example.
Consumer organisations for collective legal protection
There were also a number of requests to speak from the public: The European Community of Consumer Cooperatives Euro Coop, a non-governmental organisation of elderly people, a Dutch consumer association and a savings association were clearly in in favour of an EU system for collective redress. The representative of a business association worries that collective legal protection would put even more pressure on national courts. A French business association believes that alternative dispute settlement is the better solution and is against procedures, which are not to be carried out by public authorities. The Belgian consumer organisation Test-Achats reported of a national discussion on collective legal protection. However, the Belgian legislator wanted to wait for a European solution, which meant that current steps towards collective redress were blocked. A lawyer from the USA said that collective redress must not lead to excesses as seen in the USA; in the end the entire society had to bear the additional costs. One had to try to find other mechanisms.
There will be no collective redress as in the USA
Another speaker of the hearing, Graham Jones, a former judge from Great Britain, made it clear from the outset, that there was no need to be concerned because of the experiences made with collective redress in USA. The European Union had a completely different legal system. According to Jones, statutory violations should result in fines and compensation for consumers. However, private enforcement mechanisms would not be as efficient as public mechanisms; there should always be access to jurisdiction. At the beginning of any collective redress should be a mandatory certification procedure. A minimum number of complainants should also be required. Furthermore, it had to be clarified how such a procedure would be financed. Time and costs should not be excessive. And limits should be set in respect of compensation.
The next speaker, Benedicte Federspiel of the Danish Consumer Council agreed with the previous speaker. She pointed out that in Denmark collective redress would exist in addition to alternative dispute settlement. Initially, there had been voices against introducing collective redress; negative scenarios had been described, but they had not occurred. The public authority should be in charge of such procedures and financing needed to be clarified - currently, every state would handle the issue in a different manner.
Following the two speakers, several business representatives requested to make their contribution. They voiced their concern against collective law enforcement. They worried among others that the procedural rules could lead to a system similar to the one in the USA. Judges should play a key role in these procedures; apart from that, an overview over costs and the number of collective legal procedures to be expected should be provided. The system should not be open to abuse.
In future it shall be easier to sue for small amounts, which, however, occur in large numbers
In his contribution, Daniel Zimmer, Professor of Law in Germany supported collective legal protection for several reasons: this instrument would enable individuals to get their right, even if the damage was so minor, that a complaint would not pay; however, a collective procedure would make sense. It might also happen that courts are flooded with individual complaints, as happened in case of a German telecom company. A horizontal approach, which covers several legislative areas such as environmental, consumer or capital markets law, would be sensible. However, first the different legal conditions had to be adapted.
The last speaker of the hearing, Pawel Pietkiewicz, a lawyer from Poland, criticises that collective legal protection would show characteristics, which would make it difficult to avoid disputes. Such procedures could become very expensive. In case of collective redress it could take some time to establish who the chief negotiator was. The question would also arise, what damage would be covered exactly. The right of minorities had to be protected, said Pietkiewicz.
Cross-border collective redress should be possible
In the last round of the audience discussion it was suggested by a speaker of the Finnish Chamber of Commerce to first revise the Consumer Rights Directive; then there would be no longer so many problems with different legal statuses. The non-governmental organisation PEOPIL criticised that it was currently difficult to make a cross-border complaint, in particular when it concerned smaller amounts. However, companies that used unfair practices should be made liable. A representative of the European Trade Union Confederation demanded that collective redress should also include labour law. Many circumstances concerned a large number of workers - in cross-border cases.
Finally, the last speaker from the audience critically addressed the Commission. They had said not one single word about collective legal protection and it was time that they would clarify matters.
The Commission remains silent
The Commission limited itself to pointing out that the Consultation on this subject would be open to interested people until the end of April. A Communication would be published at the end of the year, depicting the results from the consultation procedure, said the representative of the extremely taciturn Commission. Whether a concrete legislative proposal on collective redress will happen in the near future remains to be in the laps of the gods.
Significantly more cautious was the representative of the EU business organisation Business Europe, Jérôme Chauvin. He demanded that the Commission took a coherent approach and emphasised that it was vital that consumers would gain access to legal resp. public authorities. Consumers wanted a quick solution; out-of-court paths had to be given preference. Apart from this, there would be instrument, which would not be adequately exploited, such as SOLVIT for example.
Consumer organisations for collective legal protection
There were also a number of requests to speak from the public: The European Community of Consumer Cooperatives Euro Coop, a non-governmental organisation of elderly people, a Dutch consumer association and a savings association were clearly in in favour of an EU system for collective redress. The representative of a business association worries that collective legal protection would put even more pressure on national courts. A French business association believes that alternative dispute settlement is the better solution and is against procedures, which are not to be carried out by public authorities. The Belgian consumer organisation Test-Achats reported of a national discussion on collective legal protection. However, the Belgian legislator wanted to wait for a European solution, which meant that current steps towards collective redress were blocked. A lawyer from the USA said that collective redress must not lead to excesses as seen in the USA; in the end the entire society had to bear the additional costs. One had to try to find other mechanisms.
There will be no collective redress as in the USA
Another speaker of the hearing, Graham Jones, a former judge from Great Britain, made it clear from the outset, that there was no need to be concerned because of the experiences made with collective redress in USA. The European Union had a completely different legal system. According to Jones, statutory violations should result in fines and compensation for consumers. However, private enforcement mechanisms would not be as efficient as public mechanisms; there should always be access to jurisdiction. At the beginning of any collective redress should be a mandatory certification procedure. A minimum number of complainants should also be required. Furthermore, it had to be clarified how such a procedure would be financed. Time and costs should not be excessive. And limits should be set in respect of compensation.
The next speaker, Benedicte Federspiel of the Danish Consumer Council agreed with the previous speaker. She pointed out that in Denmark collective redress would exist in addition to alternative dispute settlement. Initially, there had been voices against introducing collective redress; negative scenarios had been described, but they had not occurred. The public authority should be in charge of such procedures and financing needed to be clarified - currently, every state would handle the issue in a different manner.
Following the two speakers, several business representatives requested to make their contribution. They voiced their concern against collective law enforcement. They worried among others that the procedural rules could lead to a system similar to the one in the USA. Judges should play a key role in these procedures; apart from that, an overview over costs and the number of collective legal procedures to be expected should be provided. The system should not be open to abuse.
In future it shall be easier to sue for small amounts, which, however, occur in large numbers
In his contribution, Daniel Zimmer, Professor of Law in Germany supported collective legal protection for several reasons: this instrument would enable individuals to get their right, even if the damage was so minor, that a complaint would not pay; however, a collective procedure would make sense. It might also happen that courts are flooded with individual complaints, as happened in case of a German telecom company. A horizontal approach, which covers several legislative areas such as environmental, consumer or capital markets law, would be sensible. However, first the different legal conditions had to be adapted.
The last speaker of the hearing, Pawel Pietkiewicz, a lawyer from Poland, criticises that collective legal protection would show characteristics, which would make it difficult to avoid disputes. Such procedures could become very expensive. In case of collective redress it could take some time to establish who the chief negotiator was. The question would also arise, what damage would be covered exactly. The right of minorities had to be protected, said Pietkiewicz.
Cross-border collective redress should be possible
In the last round of the audience discussion it was suggested by a speaker of the Finnish Chamber of Commerce to first revise the Consumer Rights Directive; then there would be no longer so many problems with different legal statuses. The non-governmental organisation PEOPIL criticised that it was currently difficult to make a cross-border complaint, in particular when it concerned smaller amounts. However, companies that used unfair practices should be made liable. A representative of the European Trade Union Confederation demanded that collective redress should also include labour law. Many circumstances concerned a large number of workers - in cross-border cases.
Finally, the last speaker from the audience critically addressed the Commission. They had said not one single word about collective legal protection and it was time that they would clarify matters.
The Commission remains silent
The Commission limited itself to pointing out that the Consultation on this subject would be open to interested people until the end of April. A Communication would be published at the end of the year, depicting the results from the consultation procedure, said the representative of the extremely taciturn Commission. Whether a concrete legislative proposal on collective redress will happen in the near future remains to be in the laps of the gods.