Abstract
After many years of debate on collective redress, the European Commission has proposed to introduce a representative mechanism to be controlled by public bodies and consumer associations that satisfy certain criteria. However, the Commission has only considered a single mechanism (the litigation-based class or representative action), which is in fact “old technology.” There are several other mechanisms that deliver collective redress—new technologies. The first is the partie civile mechanism in which a civil claim “piggy backs” onto a criminal conviction. The most important mechanisms are “regulatory redress”—where a regulatory authority intervenes and agrees or orders redress to be paid—especially if coupled with an ombudsman scheme (not arbitration-based alternative dispute resolution (ADR) schemes). The regulatory redress mechanism was proposed by the Commission in the revised Consumer Protection Cooperation (CPC) Regulation but what emerged was not ideal. All these mechanisms have recently been evaluated against criteria such as their speed, cost, and ability to deliver effective outcomes. The empirical data clearly demonstrate that the new technologies are better than the old technologies. The new technologies also deliver more functions than the old: not just resolution of a dispute or delivery of redress but also assistance to consumers and traders and the ability to aggregate data on trading issues that is fed back to improve compliance, behaviour, and performance in the market place. This evidence leads to the conclusion that the Commission’s proposals are unlikely to deliver effective collective redress for consumers. The proposed method is out of date technology, and other mechanisms are clearly preferable and should be adopted instead. Member States are permitted to maintain existing collective redress mechanisms. That will lead to considerable confusion and diversity, which does not support an integrated single market. Further, the proposal will lead to a diversity of available mechanisms between Member States and hence confusion and competition between intermediaries—forum shopping. The way forward is for the EU to adopt regulatory redress and consumer ombudsmen, rather than the old fashioned litigation model. The analysis also reveals that the Impact Assessment system has flaws.
Highlights
HodgesIt is axiomatic that redress should be paid whenever due. Too often, redress is either not paid, or is reduced by transactional costs (intermediaries’ rents), or is delayed so long that the restorative effect is reduced or irrelevant
After many years of debate on collective redress, the European Commission has proposed to introduce a representative mechanism to be controlled by public bodies and consumer associations that satisfy certain criteria
Part A summarizes four major techniques for delivering collective redress: private collective litigation, the partie civile mechanism, the involvement of public regulatory authorities, and a form of alternative dispute resolution (ADR) namely consumer ombudsmen
Summary
It is axiomatic that redress should be paid whenever due. Too often, redress is either not paid, or is reduced by transactional costs (intermediaries’ rents), or is delayed so long that the restorative effect is reduced or irrelevant. Those who are familiar with civil procedure focused on litigation solutions for delivering redress, namely class actions, collective actions, and representative actions Those who work in public law, or in alternative dispute resolution (ADR), focus on other mechanisms with which they are familiar. This can lead to a series of enclosed debates that can fail to consider the true range of mechanisms that exist or to undertake a comparative review of their advantages and disadvantages. They can focus attention on a particular technique (e.g., litigat ion) rather than the desired policy outcome (delivering redress).
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