On 6th December 2018, the Legal Affairs Committee voted in favour of allowing Europe’s consumers to bring combined action if they have been damaged collectively. This is a positive development, which the AK very much welcomes. A very good result could also be achieved for Europe’s workers as regards cross-border conversions, mergers and divisions of companies.
From the AK’s point of view, positive results were achieved in the European Parliament’s Legal Affairs Committee (JURI) on 6th December 2018. In the wake of “Dieselgate”, European consumers shall be able - based on the adopted report on collective redress - to bring combined action as a group against a trader or a company to gain redress once damage has occurred.
In a circular, the European Consumer Organisation BEUC talked about a strong signal, which had been sent by the JURI Committee. MEPs did the right thing by not putting up any further unnecessary barriers as regards collective redress - and this in spite of intensive lobbying by business. Those EU Member States, which had already introduced such collective redress measures, had not experienced a development towards a “claims industry”, a phrase coined by business. The amendments tabled by Conservatives, which aimed at restricting the scope of the Directive, were not successful. Hence collective redress could also be brought with regard to passenger rights, data protection and financial services. Amendments, which stipulate “opt-in” models for collective redress, where damaged parties would have to take action in order to be able to participate in collective redress, were also not adopted. In general, the AK supports “opt-out” proceedings, where damaged consumers may be added automatically to the collective redress. This model is significant in particular in case of small claims to ensure that the instrument can be effective.
However, in spite of a basically positive result, the JURI report also includes some problematic developments. For example, according to the JURI report, collective redress should also involve mandatory characteristics and functionalities, which might threaten the collective redress systems in the Member States. In addition, 50 damaged parties are required to be able to lodge collective redress in the first place. The AK is in favour of no or at least a significantly lower threshold value of 10 people. It might be possible for the plenary of the European Parliament to confirm the Committee result at the start of 2019 and to give the trilogue mandate. One can only hope that the Council will not put off a common approach for much longer and that agreement will be reached soon.
Apart from the issue of collective redress, another vote took place as regards EU company law, which was a great success for the report drafted by Evelyn Regner (S&D). For example, in case of relocation, companies would have to grant their staff significantly more co-determination rights than has hitherto been the case. According to Regner, not only stricter controls should be introduced, but also information and consultation rights of the staff as well as participation. The new regulation would make it much more difficult to set up letterbox companies. This would be in contrast of the Polbud ruling by the ECJ in autumn 2017, which allows companies to relocate even if these companies do not pursue any economic activities at this location. Of course, this also facilitates the bypassing of undesired cooperation rights of workers and other national legislation. From the AK’s point of view, the report by MEP Evelyn Regner is a positive result, which could mean a significant improvement for European workers.