On 26 January 2018, the European Commission (the "Commission") published a report on the implementation of collective redress mechanisms in EU Member States (the "Report"). The Report is the Commission's opportunity to comprehensively review the implementation of its 2013 Recommendation on common principles for injunctive and compensatory collective redress mechanisms for breaches of EU law (the "Recommendation").
As a non-binding instrument, the Recommendation set out basic principles for national collective redress mechanisms while taking into account the many different legal systems present throughout the EU. The Commission also sought to achieve a balance between the goal of ensuring effective access to justice and the need to prevent abusive collective actions.
The Report canvasses the extent to which those principles and recommendations have been incorporated into national law by Member States. It finds broad inconsistencies and significant differences in national practice across the EU. In its conclusion, it commits to continuous monitoring and a follow-up in the forthcoming "New Deal for Consumers", a proposal to reform EU consumer rights law.
The Recommendation applies to all breaches of rights conferred on a person by EU law, although redress is mandatory only in the field of consumer rights. Directive 2009/22/EC on injunctions for the protection of consumers' interests (the "Injunctions Directive") requires that an injunctions procedure for the protection of collective consumers' interests be available in all Member States.
In competition law, Directive 2014/104 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the "Antitrust Damages Directive" – see VBB on Competition Law, Volume 2014, No. 11, available at www.vbb.com) provides that a finding of an infringement in a final decision of a national competition authority or by a review court is to be considered irrefutable evidence in follow-on actions for damages in that Member State. A finding by the competition authority of another Member State is to be considered as prima facie evidence of an infringement. The Antitrust Damages Directive applies to collective actions where they exist, but does not require Member States to introduce collective actions into their legal systems.
In this context, the Report finds that collective redress mechanisms are not available consistently across the EU and safeguards against abuse vary from one Member State to another. Nine Member States do not provide any mechanism to claim collective compensation in case of harm. Of the 19 Member States in which compensatory collective redress is available, over half limit the redress to specific sectors, mainly consumer complaints. In other Member States, conditions are such that it is too risky, costly, difficult or time-consuming to avail of the formal right to collective action. The Recommendation has led to new legislation being adopted in only four Member States (Belgium, France, Lithuania and the UK).
Other areas where little progress was found include rules on third party financing of collective actions, harmonisation of procedures relating to the awarding of costs and broader grounds for follow-on actions. The variety of national practices also makes it difficult to coordinate cross-border collective actions.
Despite these mixed results, the Commission has said that it intends to continue its efforts in promoting the Recommendation. Further reviews and analysis will be undertaken, and the forthcoming "New Deal for Consumers" is likely to be of interest also.
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