National Library of Australia. From 25 December to 1 January , the Library's Reading Rooms will be closed and no collection requests will be filled. Collection delivery service resumes on Wednesday 2 January Further information on the Library's opening hours is available at: Collective action in the European union: London ; New York: Collective Action in the European Union is the first ever systematic investigation of collective action issues at the EU level itself.
Bringing together an impressive array of EU and interest group scholars to investigate a key issue in European political economy, this study considers whether collective action is driven at the European transnational level by rational, utility maximising behaviour, or whether explanations couched in social terms are more convincing. The first chapters identify and address wider issues in transnational collective action.
Later chapters apply these issues to specific domains, such as business, the professions, consumers, and environmental interests.
Many of these chapters introduce fresh empirical evidence, including original surveys of the constituency of Euro groups and of national groups who operate at the European level. Request this item to view in the Library's reading rooms using your library card. To learn more about how to request items watch this short online video.
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New search User lists Site feedback Ask a librarian Help. Advanced search Search history. Browse titles authors subjects uniform titles series callnumbers dewey numbers starting from optional. See what's been added to the collection in the current 1 2 3 4 5 6 weeks months years. Cite this Email this Add to favourites Print this page. Catalogue Persistent Identifier https: Finally, such a measure would avoid contradictions in jurisprudence between courts in the different EU Member States called upon to settle similar cases. The introduction of a common system for all European countries would therefore make it possible to provide consumers with improved protection, whilst enhancing the confidence of the business world and, as a result, boosting trade within the EU.
The introduction of a European collective action, as defined above, would have a beneficial effect in respect of private international law in view of the difficulties in interpreting and applying the standards for resolving contractual and extra-contractual disputes Rome I and Rome II. This would apply, in particular, to the recent Unfair Commercial Practices Directive. Such practices are often used simultaneously in several Member States, causing harm to many consumers but giving them no opportunity to seek collective redress.
Group action is a complementary procedure vital to the effective implementation of this directive. All of the currently known directives in the field of consumer protection, as transposed into national law by the Member States, would therefore be made more effective by the recognition of collective actions in the fields covered by these directives. It would be desirable for small and medium-sized enterprises SMEs also to benefit from the application of the provisions in question as they, too, find themselves in a similar situation.
It goes without saying that the bringing of collective actions at EU level, as a final means of seeking to resolve disputes, in no way precludes recourse to systems of out-of-court settlement of consumer disputes. The latter measures have received the unqualified support of the EESC and their potential should be further explored in detail and further developed.
In order to be able to properly identify the subject of the proposal, agreement must be reached on the type of legal action in question. As the survey of the different systems adopted in the various Member States demonstrates, the designation and contents of the various types of action vary considerably. Representative actions can be brought only by consumer associations or administrative bodies the Ombudsman and similar bodies , with a view to securing the cessation of acts which infringe the rights of the consumer and even, in the case of some countries, securing the abolition of unfair or unlawful terms in consumer contracts.
Recourse to collective actions is not necessarily limited to just the fields of consumer protection and competition. As things stand at present, even though consumer law has mainly come into being on the basis of the benchmark Article 95 of the EC Treaty, consumer protection policy, as envisaged here, clearly represents a measure designed to promote the economic interests of consumers.
There is no doubt that collective actions will provide a high level of protection and will enable consumer organisations to organise themselves with a view to protecting the interests of consumers, i. This solution could be considered since collective actions could be used in the case of both cross-border disputes and national litigation and in fields other than that of consumer law. The collective action should, at all events, respect the principles of subsidiarity and proportionality; it should never go beyond the bounds of what is required to meet the objectives set out in the Treaty, insofar as such objectives cannot be adequately achieved by the Member States and are thus better realised by taking action at Community level.
C 74 of 12 July , which are presented as common principles despite the diversity of legal cultures that exist in the Member States. Representative actions are open only to a number of specially authorised bodies consumer associations and the Ombudsman. Under this procedure consumers are generally not able to obtain redress for damage suffered by individuals.
The main aim of these procedures is to secure the cessation of acts which infringe consumer rights and even, in some countries, to secure the abolition of unfair or unlawful terms in consumer contracts in respect of which the courts are unable to make provision for any compensation. Certain countries have made adjustments to these mechanisms in order to make it possible to compensate consumers. Such compensation is not, however, paid to individual consumers but retained by the representative bodies or paid to the State to be used for social purposes.
Representative actions are thus, in practice, not to be equated with real collective actions, in which all consumers are compensated in a single legal proceeding. The introduction of a European collective action must not result in the establishment in Europe of US style class actions. In the USA, court decisions are delivered by people's juries and elected judges. In the USA, the compensatory damages awarded may be accompanied by punitive damages.
These damages, which are set by the juries and elected judges, frequently attain astronomical proportions. Punitive damages are not applied in most EU Member States. Lawyers in the USA are remunerated by means of a generally applicable system of contingency fees. This system is prohibited — either by law or under lawyers' codes of professional conduct — in the majority of EU Member States.
In the light of an examination of the collective action procedures adopted in the Member States, these procedures may be classified into two categories, depending on the main mechanism which underpins the initiation of the action and the intervention of the consumer in the procedure. In the latter case, the consumer always retains the right to choose not to be covered by the procedure. The drawing-up of a European collective action thus inevitably involves selecting the mechanism which is to underpin such an action.
Under the opt-in system the persons concerned have to make known their desire to be party to the procedure. The persons concerned must therefore make themselves known and expressly ask to be part of the action before the decision is delivered. These procedures are similar to collective actions based on the opt-in principle since, in the case of test cases too, the persons concerned must make themselves known in order to be able to be party to the procedure and to lodge individual claims.
The distinctive feature of the test case mechanism does, however, lie in the fact that the judge selects one of the individual claims and gives a ruling on that claim alone.
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The ruling given under the test case procedure will then be applicable to all the other individual claims lodged with the court. Each member of the group in question has to make himself or herself known in order to be party to the procedure; the way in which this is done is generally by signing a register. It is therefore a question of making known an express desire to participate; this enables the procedure to be in line with the principle of freedom to take legal proceedings.
The plaintiff only takes action on behalf of the persons concerned once they have given their formal agreement. Under the opt-in method, the foreseeable extent of the damages at stake may be determined ex ante. This is important for the defendants who are directly concerned by the claim for compensation, generally, and it enables them to take out insurance policies to cover part of the potential damages.
Sufficient funds will therefore be held in reserve to meet legitimate compensation claims. These mechanisms are difficult to administer and are expensive: The management of the individual files becomes a complex matter once a large number of persons in involved. This leads to very long procedural delays since the court has to organise and deal with each of the individual dossiers. In the case of mass litigation, from which most collective actions derive, the damages suffered by individuals are relatively homogenous and frequently do not need to be examined on an individual basis.
Turning to the test case procedure, the judge does not always lay down the amount of compensation due and sometimes transfers cases to individual procedures. This gives rise to administrative problems and extends the time limits of the procedure. Furthermore, an analysis of collective actions under the opt-in procedure and the test cases instigated in those states which provide for such a mechanism shows that a large proportion of consumers do not lodge a claim before the courts because they do not have proper information on the existence of the procedures in question.
A large proportion of the persons concerned also refuse to initiate legal proceedings because of the material, financial and psychological obstacles thrown up by legal proceedings demands as regards time and money and the fact that the whole matter is extremely complex. There is therefore a sizeable drop-out rate between the number of persons who really do take action and the potential number of persons concerned.
The compensation for damages awarded to consumers is therefore incomplete and any profit unlawfully acquired by commercial operators as a result of the practice in question may, in large, part be retained by them. The deterrent goal of the procedure is not achieved. These procedures also give rise to a problem with regard to the relative effect of the judgement delivered. The decision delivered in connection with a collective action will be applicable only to those persons who were party to the action. Consumers who had not made themselves known will therefore be fully at liberty to initiate individual actions which could give rise to decisions which are in contradiction with those secured in the case of the collective action.
A number of European States have drawn up a sui generis procedure in respect of collective actions based on the abovementioned system. An analysis of national systems based on the opt-out principle shows that this procedure is simpler to administer and more effective than the other procedures adopted by some Member States. The system in question ensures that the persons concerned have real access to justice and, consequently, goes so far as to provide fair and effective compensation to all consumers who are the victims of particular practices.
This procedure also avoids administrative difficulties for both the plaintiff and the courts the members of the group covered by the collective action make themselves known only at the end of the procedure and not in advance of the procedure. The procedure also has a real deterrent effect on the liable party, since the latter is obliged to compensate all the persons who have been victims of a given practice and may have to refund the unlawful profit derived from the practice in question. Account should also be taken of the advantages which this type of procedure offers to the commercial operator against whom the case is brought.
Having recourse to collective actions makes it possible to achieve savings in human resources and financial savings with regard to the defence of the commercial operator involved and to organise the defence in a much more effective way. Rather than having to manage, simultaneously a vast number of similar cases being tried by a whole range of different courts, the party in question prepares his or her defence before a single court.
This mechanism could be regarded as being at variance with the constitutional principles of a number of states and with the European Convention on Human Rights and, in particular, with the principle of the freedom to take legal proceedings, insofar as persons are deemed to be automatically part of the group covered by a collective action without having given their express agreement to be so included. If the persons concerned do not ask to be excluded, they could be bound by the decision that is delivered. It is, however, perfectly possible to preserve this individual freedom.
This could be achieved in one of two ways: The other way in which this goal could be achieved is by giving members of the group concerned the right to ask to be excluded from the procedure at any time, even after the decision has been delivered and, if the decision taken is not favourable to them, to enable them to initiate individual actions.
The rights of the defence, such as the principle of an adversarial process and the principle of equality of arms would also be safeguarded: Under the opt-out system it is indeed the case that all the persons concerned would perhaps not be designated by name and would not be known to the commercial operator against whom the action has been brought. The latter party could therefore find it impossible to invoke individual means of defence.
However, in the context of a collective action, the individual situations are inevitably homogeneous and the judge is the guarantor that this shall be the case. Litigation linked to consumer rights and competition mainly derives from contracts and the situation of the interested parties is therefore virtually identical. The legal issue causa petendi is one and the same. It is therefore difficult to see how the commercial operator could invoke a specific means of defence in respect of a single consumer.
Throughout the procedure the judge may have the possibility of throwing out an action in cases where he establishes that the situations of the claimants are characterised by considerable differences of law and fact. Finally, when it comes to setting compensation, the judge has the possibility of establishing sub-groups in order to adjust, for example, the amount of compensation in the light of individual situations and therefore also in the light of possible reductions in liability. The system recently selected by both Denmark and Norway makes provision for both opt-in and opt-out procedures.
The judge may decide to have recourse to an opt-out system if the litigation in question involves small amounts, if the claims are similar and if it would be difficult to pursue an opt-in procedure. There are many cases of consumer litigation in which consumers are unable to obtain an effective individual remedy because of the large number of individuals concerned and the small financial sums involved.
Use of the opt-out procedure makes it possible to take account of all the persons concerned and to secure a penalty which is on a par with the level of unlawful profit which may have been made.
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In the case of litigation involving high levels of individual damage, the opt-in system is selected, making it necessary for each consumer to make themselves known in order to be party to the procedure. The administration of the procedure is rendered easier in the case of mass litigation. The goal of providing redress is achieved if effective publicity is provided.
The goal of serving as a deterrent is likewise achieved. Any possible infringements of constitutional principles or the European Human Rights Convention are offset by the effectiveness of the process in respect of providing redress and serving as a deterrent. Attention should be drawn first of all to the difficulty in defining the boundary between the two procedures of opt-in and opt-out.
The two states which have adopted these procedures have done so only recently and no concrete cases are yet available. The relevant laws refer only to: This problem of the lack of a clearly-defined boundary could give rise to very long debates during the procedure and to appeals which would extend the length of the procedure. In this particular type of procedure, which pits a large number of claimants against each other, the powers that are vested in the judge are of crucial importance. In the majority of the procedures involving the opt-out principle, an initial phase of the procedure involves an examination carried out by the judge to determine whether the action is admissible.
This same aim is served by the examination of the individual file in respect of test cases. The importance of the stage involving verification of whether or not a case is admissible lies in the fact that this stage makes it possible to halt, at the beginning of the procedure, any claims which are manifestly unjustified or of a fanciful nature and which could unlawfully damage the image of the opposing party; this objective is achieved by preventing abusive or inappropriate procedures from being taken further.
It is the judge who guarantees that this stage of verifying whether a procedure is admissible is properly carried out. In concrete terms, he has the task of verifying whether the conditions set out in law for undertaking collective actions are respected. At a later stage, it is also important that the judge is able to validate any proposed transaction or reject it if, in his estimation, it is not in the interests of the members of the group.
Mark Aspinwall (Author of Side Effects)
To be in a position to do this, he must have greater powers than simply those of approving transactions, which are the powers usually vested in judges by law under the majority of judicial systems which apply in the EU Member States. Given the particular nature of this procedure, there is also a need to make provision for appropriate procedures for the production of evidence. The judge must be able to use powers of injunction with regard to the opposing party or third party in order to secure the production of documents or he must be able to order measures of inquiry with a view to establishing new evidence.
The legislation establishing collective actions must expressly stipulate that the judge may not refuse to take the abovementioned action once it has been requested by the claimants. In order to enable judges to take on these powers in the most effective way possible, it would appear to be necessary to stipulate that only particular courts, designated by name, will have jurisdiction for collective actions. The judicial structures of the Member States should therefore be adapted accordingly and provision also needs to be made for judges sitting in the courts in question to receive special training.
Collective actions must enable claims to be made for compensation for material damage financial damage , physical damage and compensation for pain and suffering and other forms of non-pecuniary loss. Since the aim of the action is both to compensate consumers and to provide a deterrent, it seems necessary to make provision for compensation of all forms of damage if this goal is to be achieved.
It should also be possible to provide courts with simple, inexpensive and transparent evaluation methods, without abandoning the principle of compensation for damages.
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Claimants involved in collective actions must also be able to secure several forms of damage from the court. In addition to stipulating the cessation of particular behaviour or the invalidity of an act which can still be carried out, compensation of damages must be able to take a direct or indirect form. Provision must also be made for compensation to be backed up by other forms of remedy, such as advertising the publication of the court's findings, public notices etc. Direct, individual compensation must not be the only form of compensation envisaged, as under certain hypotheses, it would be difficult — if not impossible — to bring about, either because the members of the group concerned cannot be identified under the opt-out mechanism or because there are too many such persons, or yet again, because the amount represented by their individual damages is too low.
The key requirements are that the persons involved should always be compensated — even indirectly — and that the deterrent effect should be achieved. Appropriate machinery should be devised to address the following cases: Appropriate machinery should likewise be devised to address cases where distribution of payments to individuals proves to be too expensive in view of the small amounts of individual damages involved. In the same way, if the sums are not all distributed, priority should be given to a measure of indirect compensation in respect of the residue of the compensation.
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In his decision the judge should set out in detail the action to be funded by the residue and he should adopt the procedures for monitoring this operation; responsibility for implementing these procedures may be delegated to a third party. Should even this measure of indirect compensation prove to be impossible, the total amount of the residue determined by the judge shall be paid into a fund for supporting collective action in order to enable it to finance new actions.
If the judge is unable to calculate the amount to be paid to each individual by way of compensation in cases in which it is not possible to identify all the members of the group this applies solely in the case of the opt-out mechanism , he must be able to establish an assessment grid for the different categories of damages.
Responsibility for distributing the compensation sums may be delegated to the court registry, the lawyer representing the group or a third party insurance agent, account, etc. In the case of the second hypothesis, the judge must be able to make provision for individual compensation for members of the group who have made themselves known following the publication of information on the judgement; the residue of the compensation is to be allocated to actions providing indirect compensation for the damage suffered by the group.
Bearing in mind the importance of a the need to ensure that victims are compensated without delay and b making certain that the rights of each of the parties have been properly appreciated, there is a need to reconcile each party's right to lodge an appeal against the decision with the abovementioned overriding needs.
The recognition of this right of appeal should therefore oblige the Member States to establish a rapid appeal procedure in order to avoid the application of a purely stalling mechanism. Furthermore, having the certainty that proper provision has been made in the accounts of the liable party for the compensation which it has been ordered to pay also provides a guarantee for the victims in the event of an appeal. Given that it is not desirable, or even possible, to introduce a blanket system of US-style contingency fees, since such a system runs counter to the European legal system, it is essential to make provision for a form of financing which would enable claimants who do not have the requisite funds to instigate a collective action to obtain an advance in respect of their legal costs lawyer's fees, cost of expert opinion in connection with the inquiry measures undertaken by the judge, etc.
The support fund may also a have the role of centralising all the information relating to ongoing collective actions and b be instructed to pass on information relating to the steps to be taken by the persons concerned with a view to making themselves known, excluding themselves from a collective action or securing compensation. Legal instrument to be employed: Provision could be made for the introduction of collective actions at EU level by having recourse to either a directive or a regulation; it is considered that a mere recommendation would, by definition, fall short of what is required for creating the conditions for effective, uniform action which are necessary to enable such a measure to be adopted in a harmonised way in 27 Member States.
Provided that the content envisaged is extended to cover other matters and not only consumers' rights, and provided that Articles 65 and 67 of the EC Treaty are selected as the legal basis, the adoption of a regulation could be considered, on a par with, for example, the regulations on: