Collective Redress Research Articles

Heading Towards an Effective Mechanism for the Protection of Collective Interests of Consumers – Some Comments on the Proposal for a Directive on Representative Actions

In April 2018, the European Commission introduced a long awaited Proposal for a Directive on represented actions, which aims to modernize the existing European collective redress system. The aim of this paper is to answer the question whether the solutions put forward in this Proposal will improve the landscape of collective redress in the EU. For this purpose, I analyse the existing model of collective consumer redress in the EU, as set forth by Directive 98/27/EC, Directive 2009/22/ EC and Recommendation 2013/396/EU; I also evaluate it from the perspective of its functionality with special consideration of key problematic issues. Against this background, I present the legal provisions put forward in the Proposal for a Directive on representative actions. The comparison of both legal structures makes it possible to give an answer to the question whether the proposed legislation can remedy the existing problems of the collective redress system and, thus, to answer the question whether it will contribute to strengthening the mechanism for the protection of collective consumer interests in the EU.

CONSUMER PROTECTION IN PRACTICE - TRANSNATIONAL COMPARATIVE ACCOUNT OF COLLECTIVE REDRESS MECHANISMS

This article constitutes a continuation of the research conducted so far in the domain of collective consumer redress in the European Union. The aim of the article is to discuss the issue of various legal mechanisms functioning in the selected EU Member States that serve consumers as a means of collective redress. In the first part of this paper, it was presented that the models of consumer protection vary significantly in the individual Member States. After having scrutinized some terminological remarks regarding consumer law enforcement, the main analysis focuses on the legal solutions adopted in Belgium. In the second part of the discussion, the author presents relevant legal solutions adopted in the UK and the Netherlands. Specifically, the author discusses the various approaches to the issues fitting in the dichotomic scheme, that is, the so-called opt-out and opt-in mechanisms. Special consideration is devoted to the issue of admissibility of collective redress and legal standing to bring collective actions. The paper employs dogmatic and analytical methods for the process of interpretation of the normative material and the analysis of case law. The study uses the comparative perspective to identify solutions emerging from effective practices found in legal systems of the EU Member States. The findings emerging from the analysis show how significantly the Dutch and English systems of collective redress vary. The article also provides some tentative conclusions that would make it possible to decide which legal solutions operating with success in those jurisdictions could be adopted into Polish law.

Book review: Collective Redress and Private International Law in the EU, by Thijs Bosters. (The Hague/Vienna: T.M.C. Asser Press/Springer, 2017)

Book review: <i>Collective Redress and Private International Law in the EU</i>, by Thijs Bosters. (The Hague/Vienna: T.M.C. Asser Press/Springer, 2017)

Class Arbitration in Australia: A Bright Future or a Pipe Dream?

Class arbitration has been a hotly debated issue in academic circles since the turn of the century throughout the world. Much literature has recognized that class arbitration could be an effective means of resolving the ever-increasing number of mass claims with cross-border implication. However, the cross-border advantage of class arbitration is dependent on the legal community’s ability to craft a procedure that is acceptable across a diverse tapestry of legal systems around the world. In continental European legal systems there appears to be a jurisprudential battle underway with some supporting class arbitration, and many fundamentally objecting to it (some authors have even argued that class arbitration would be unconstitutional). These objections have not halted the development of alternative collective redress regimes in EU Member States, (albeit they are disparate and often incomplete) demonstrating an underlying appetite for collective redress. Australia has had a wealth of experience with judicial class actions, whilst there is little literature considering the possibility of class arbitration. This paper: (1) considers whether class arbitration would even be possible under Australian law, and (2) proposes a ‘less is more’ class arbitration regime that would be harmonious on an international level.

Recommendation on Common Principles for Collective Redress Mechanisms

Recommendation on Common Principles for Collective Redress Mechanisms

Data protection and the construction of collective redress in Europe: exploring challenges and opportunities

... The European Union (EU) is currently revising its collective redress policy. The European Commission has defined the term as follows: Collective redress is a procedural mechanism which allows for reasons of procedural economy and/or efficiency of enforcement, many single claims (relating to the same case) to be bundled into a single court action … It thus constitutes a key mechanism to ensure that rights do not only exist on paper but are enforced.1 Between May and August 2017, the European Commission held a public consultation to assess the impact of its Recommendation 2013/396/EU2 and ‘to check effectiveness and efficiency of the rules put in place in the Member States’ in order to consider whether further measures are necessary.3 In this Recommendation and the related Communication,4 the Commission called on all Member States to have horizontal collective redress ‘mechanisms at national level for both injunctive and compensatory relief concerning violations of rights granted under Union Law’.5 These documents also set out certain common principles to adhere to in the national collective redress schemes. The appropriate measures were supposed to be put in place by 26 July 2015. As a result of its assessment and some recent consumer mass harm controversies, in April 2018, the European Commission released a proposal for a stronger instrument—a Directive on representative actions.6

Law’s Financialization: Litigation Finance and Multilayer Access to Justice in Canada

AbstractIn the aftermath of the Global Financial Crisis, states around the world have experienced sustained growth in the emerging industry of litigation finance in light of the perceived insularity of courtrooms from the instabilities and fluctuations of financial markets. In Canada, this nascent industry has been dominated by class actions given the high costs, risk exposures, and attractive rewards associated with collective redress. Such investments have been legitimated as promoting access to justice, a fundamental human right. This paper traces the historical and contemporary development of this legal dynamic of financialization by documenting the progressive liberalization of maintenance and champerty laws from the nineteenth century to the current period through a series of case studies, before exploring the legal economics of the emerging industry in Canada. In so doing, this paper critically examines the impacts of law’s financialization on multilayer access to justice.

Collective Redress: The Need for New Technologies

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.

Kollektív igényérvényesítés Európa egyes államaiban

&#x0D; &#x0D; &#x0D; &#x0D; Kollektív igényérvényesítési mechanizmussal, a csoportos és a reprezentatív típusok különböző fajtáival Európa legtöbb országában találkozhatunk (kivételek például Svájc vagy Csehország, ahol a tömeges jogsértések kezelésére szolgá- ló általános kollektív eljárásokat nem vezettek be). A kollektív igényérvényesítési rendszerek számos jogpolitikai célt szolgálhatnak, melyek közül legjelentősebbnek a joghoz jutás elősegítését, a költségek csökkentését, az igazságügy működésének gazdaságosságát, a felek közötti tényleges egyenlőség biztosítását, az eltérő döntések elkerülését, valamint a gazdasági szereplők viselkedésmintáinak javítását tekinthetjük. A tömeges szinten nyújtott szolgáltatások elkerülhetővé teszik a bírósági eljárások megtöbbszöröződését, ezért egyre fontosabbá válnak. &#x0D; &#x0D; &#x0D; &#x0D;

The adaptability of international arbitration: Reforming the arbitration mechanism to provide effective remedy for business-related human rights abuses

This paper analyses the potential for international arbitration to provide effective remedy for business-related human rights abuses. Since the proliferation of international arbitration, the default arbitration mechanism as it stands has been contemplated by and large for the resolution of cross-border commercial disputes where the primary interests are efficiency and finality. However, there is evidence that human rights issues have emerged in international arbitration. Accordingly, if arbitration is to be used in such cases, the mechanism must be adapted in light of the particular issues that arise in the adjudication of human rights; the balance between transparency and confidentiality, reprisals against victims and human rights defenders, collective redress, financial assistance, the applicability of human rights standards. If proper procedures are in place to contemplate the particular interests involved in cases where the substantive claims involve human rights, the advantage of international arbitration is that it can provide direct access in a neutral forum for holding companies accountable where national jurisdictions are unavailable or difficult to access. This article begins by analysing the historical development of international arbitration so as to demonstrate a pattern of adaptability and flexibility vis-à-vis the subject matter of cross-border disputes. The article will then contemplate the potential of and concerns for international arbitration, putting forward specific recommendations for reforms of the international arbitration mechanism in cases where the substantive claims involve business-related human rights abuses.

Enforcing EU equality law through collective redress: Lagging behind?

Whilst the enforcement of EU law was initially based on individual and institutional “vigilance”, it has progressively expanded to embrace collective redress. However, collective redress mechanisms remain mostly nested in market-oriented areas, like competition law, consumer protection and data protection. Drawing on EU secondary law and soft law, this article contends that collective redress procedures should also be encouraged in more socially-oriented areas, focusing, in particular, on EU equality law. This is essential not only to address the rise of xenophobia in Europe, but also to ensure the substantive supremacy and uniform application of EU equality law, and to achieve more consistency within EU law.

‘What’s a consumer?’ (Some) clarification on consumer jurisdiction, social-media accounts, and collective redress under the Brussels Ia Regulation

‘What’s a consumer?’ (Some) clarification on consumer jurisdiction, social-media accounts, and collective redress under the Brussels Ia Regulation

Collective redress in the EU: a rainbow behind the clouds?

In early 2018, the tortuous process towards the establishment of a framework for collective redress at the EU level reached new milestones. In January, the European Commission published its long-awaited report assessing the practical implementation of the 2013 Recommendation. As many had predicted, the Recommendation has failed to secure a consistent and coherent framework for collective redress in the EU and national legal landscapes remain highly fragmented. In April, the Commission presented new measures supporting collective redress for consumers in the context of its ‘New deal for consumers’. In particular, a new draft Directive intends to maximise the potential of injunctions orders to facilitate redress in mass harm situations. The question is now whether the proposed instrument is likely to successfully put an end to the collective redress conundrum and to provide an effective tool for resolving mass claims in the EU.

Class Actions and Arbitration: Alternative Approaches Based on the (Ever Evolving) Dutch Experiences with Collective Redress

This article first aims to contribute to an understanding of the Dutch regime for collective redress against the background of pending discussions on the possibility, desirability, and practicability of the settlement of mass claims by means of arbitration. Secondly, it assesses to what extent arbitration may play a part in the Dutch context. The article proceeds in two sections. After the introduction, section 2 analyses the Dutch collective redress regime. It is concluded that Dutch law does not allow for class action arbitration. This, however, does not mean that arbitration cannot play a part under Dutch law in the context of collective redress. It is submitted in section 3 that Dutch law provides for two options. First, an arbitral tribunal may be engaged to assess whether a collective claim at law exists. This mechanism allows collective claim vehicles and (purported) wrongdoers to assess their position at law in the realm of a confidential arbitration. In this context arbitrators serve as facilitators to a collective settlement that is subsequently brought before the court in order to be declared binding. Secondly, disputes over rights of individual claimants under a settlement agreement that has been declared binding may be settled in arbitration.

‘A chain reaction’ or the necessity of collective actions for consumers in cartel cases

As a particularity of competition law, damage caused by a legal violation generally travels down the supply chain. An overcharge incurred by the direct purchaser is often at least partially passed on to the next level in the supply chain, and so on, ending with the final consumer. Damage is typically widespread once it reaches the consumer level. Thus, the consumer’s rational response is not to initiate an individual lawsuit. The classical solution is to improve the incentive structure with some form of collective redress. The principle of effectiveness as defined in Article 4 of the Antitrust Damages Directive requires an effective procedural remedy for each victim of a competition law infringement, but the Directive is silent regarding collective actions. Drawing on arguments on the rational apathy problem with consumer lawsuits, we analyse why this ‘silence’ upsets the European principle of effectiveness. We show why this omission is particularly harmful in the competition law case. We conclude that the time to introduce collective actions to ensure the effectiveness of European competition law has arrived. Such mechanisms do not have to be entirely harmonised across the European Union – different shapes in different Member States or even alternative solutions to the same effect are perfectly permissible.

Opt-out systems in collective redress EU perspectives and present situation in the Czech Republic

It is common nowadays for a person to suffer an injury as a result of a widespread illegal practice by a particular entity. Individual redress mechanisms prove to be insufficient. It is therefore crucial to provide a suitable way for an injured party to achieve remedy. Collective litigation serves this exact purpose. This article defines opt-in and opt-out systems of collective redress, asseses their strengths and weaknesses and offers possible solutions. The author does not omit two related topics: time limits for opt-in and opt-out, and notice of initiation of the proceeding. The article also contains a comparative study of Danish, Norwegian, Dutch, Portuguese, British and Belgian systems as representatives of opt-out systems. Lastly, the article also describes the current state in the Czech Republic, where a debate is currently taking place over the possible form of collective redress. The aim of this article is to provide a complex view of pros and cons of the opt-out system of group proceedings and to show that the opt-out system can be functional and suitable for collective redress.

Collective Redress in Consumer Protection in South East Europe: Cross-National Comparisons, Issues of Commonality and Difference

Collective Redress in Consumer Protection in South East Europe: Cross-National Comparisons, Issues of Commonality and Difference

Data Protection and the Construction of Collective Redress in Europe: Exploring Challenges and Opportunities

Article 80 on collective redress in the GDPR contains some of the famous circa 50 derogations that have diluted the degree of harmonisation in this EU main data protection instrument in force since May 2018. The provisions on collective action available in this framework law were not transcribed in a straightforward manner into the lex specialis to the GDPR - the proposal for the reformed e-Privacy Directive (redesigned as an e-Privacy Regulation) - and have required the co-legislators’ intervention to make them more explicit. The efforts required to bring collective redress dimension into the enforcement of the rights to privacy and data protection in the EU can be better understood if discussed in the context of the overall development of this type of remedy here. The process has been fragmented whilst a binding horizontal EU-wide measure is yet to be stipulated. In the meantime, as showcased by the recent CJEU decision in Schrems v Facebook, there are important and urgent questions such as the cross-border element that need to be answered both in terms of the real exercise of access to justice in enacting data protection as well as for consumer rights more broadly. The provisions on collective redress in the new EU data protection legislation have been bold steps in strengthening fundamental rights, but their real impact will depend on other processes developing in parallel, such as the national collective redress schemes, the horizontal EU-level instruments and the case law of the CJEU and national courts.

Regulation Through Litigation — Collective Redress in Need of a New Balance Between Individual Rights and Regulatory Objectives in Europe

Abstract The EU Collective Redress Recommendation has invited Member States to introduce collective redress mechanisms by July 26, 2015. The claim of the well-known reservations concerns the potentially abusive litigation and potential settlement of not well-founded claims resulting from controversial funding of cases by means of contingency fees and from “opt-out” class action procedures. The Article posits that apart from that claim, at bottom there may be some danger that the European Commission and private interest-groups may try to pursue the enforcement of their regulatory agendas in this way at the expense of individual claimants’ interests. However, in contrast to the situation in the United States, the need to complement regulatory enforcement by collective action may not appear as strong because of the relatively strict regulatory control and enforcement, which may explain EU Member States’ longstanding reluctance to adopt collective proceedings due to their concern for plaintiffs’ individual rights. Therefore, a comparative analysis is carried out to see to what extent individual rights as opposed to regulatory goals are taken into account in the different newly revised systems in place across Europe. As an interim result, the Dutch settlement procedure for mass damage claims, the English Group Litigation Order and the German test case procedure turn out to be relatively well-suited to dealing with mass damage claims. At the same time, none of them can quite reach an optimal balance between individual rights and regulatory goals and therefore each of them is subject to criticism. That is why the further question is raised as to how far these procedures could complement each other, thus contributing to the enforcement of individual rights without overregulating markets in Europe.

Representative Actions in Russia

Class action is an important safeguard to protect the rights and legitimate interests of large groups of people and it has already proven successful in advanced foreign legal systems. One of the most popular forms of class action in countries with acontinental legal system (France, Sweden, Argentina) is a representative action, which is initiated by non-profit associations, i.e., “ideological claimants” (associations, foundations, non-profit organizations) in defense of violated collective rights of a large group of people or unspecified persons in the most vulnerable areas of economic life. The institution of collective redress by representative bodies is less popular in countries with common law legal systems (the USA, Australia, Canada), which traditionally use class actions. Nevertheless, countries with common law legal systems such as the United Kingdom (England and Wales) actively use the legal tools for the social protection of the violated rights and interests of citizens. This article analyzes the legislative consolidation and application of representative actions in the Russian Federation. The absence of amechanism (for filing alawsuit before the decision) of judicial protection of professional representatives’ collective rights and public interests according to the generally accepted international practices involving interested persons whose rights have been violated (opt-in or opt-out), creates barriers to the development of representative actions in Russia. At the same time, the scope of these claims and the judicial protection of collective rights and public interests by public associations has its own characteristics, which can be used by legislators to effectively protect human rights.