Collective Redress in Europe

The Commission of the European Communities has just released its latest Green Paper on Consumer Collective Redress. It cites several current problems for consumers in Europe, one of which is a weak enforcement framework:

15. As a consequence of the weaknesses of the current redress and enforcement framework in the EU, a significant proportion of consumers who have suffered damage do not obtain redress. In mass claim cases that affect a very large number of consumers, although sometimes the harm may be low for the individual consumer, it can be high for the size of the market. As these markets become more cross-border in nature, effective cross-border access to the mechanisms of redress become necessary. Today, close to 10% of collective redress claims have a cross-border element. For example, a UK company recently distributed scratch cards in Irish newspapers offering "free" holidays, whereas in reality this offer cost each consumer a minimum of EUR 130. With further integration of the markets this percentage is likely to rise.

The Green Paper surveys the existing instruments for collective redress, such as its existing recommendations to facilitate ADR and the Consumer Protection Cooperation Regulation. After finding these inadequate, the Commission proposes several options and invites comment. Briefly, the options include 1) no European Communities action, that is, keep the status quo; 2) cooperation between member states to, for example, create a collective redress network; 3) mix of policy instruments such as improving ADR mechanisms, extending small claims procedures to mass claims, expanding the Consumer Protection Cooperation Regulation's scope, encouraging improvement of businesses handling complaints, and raising consumer awareness; and 4) judicial collective redress procedure, which would create a measure that ensures adequate redress for mass cases through representative actions, group actions, or test cases (it has left open the question of whether the procedure should be opt-in or opt-out).

Here is the call for action and contact information:

With this Green Paper the European Commission calls on the interested persons to express their views by sending in their replies (marked “Response to the Green Paper on Consumer Collective Redress”) no later than 1st March 2009 to:
European Commission
Directorate-General Health and Consumers
Rue de la Loi 200
1049 Brussels
Belgium
Or by e-mail to Sanco-consumer-collective-redress@ec.europa.eu Contributions will be published on the website of the Health and Consumers Directorate-General of the European Commission. It is possible to request that submissions remain confidential. In this case, contributors should expressly state on the first page of their submission that they oppose publication. The Commission will examine the contributions and publish a summary thereof in the first half of 2009. On the basis of the outcome of the consultation, the Commission will present another policy paper in 2009.

ECB