European Commission to launch broad consultation on collective actions before progressing proposals for competition claims

Over the past few years the European Commission has taken steps toward the reform of collective redress procedures in two areas: (i) damages actions for breach of EC competition law (by consumers or business); and (ii) consumer claims more generally. Until recently, these two strands have progressed separately, with the competition proposals having been considerably further advanced:

• In April 2008 the Competition Commissioner published a White Paper on Damages Actions for Breach of EC Antitrust Rules, which included provision for opt-out actions. A draft Directive based on those proposals was however withdrawn just days before its planned publication in October last year.
• The Consumer Affairs Commissioner issued a Green Paper on Consumer Collective Redress in December 2008 and a further consultation paper in May 2009. These papers set out various options ranging from taking no action to ensuring that a judicial mechanism for collective redress exists in all member states.

It now seems that the competition proposals are to be reigned back pending the development of a broader framework for collective actions in Europe. In May 2010 the EU Competition Commissioner, Joaquin Almunia, announced that the Commission would launch a broad consultation on collective actions in autumn this year, with the aim of defining "common legal principles to guide any future sector-specific legislative proposal concerning collective action".

The position in the UK is similarly uncertain following the withdrawal of proposals relating to collective actions from the Financial Services Act 2010 before it received Royal Assent (see post). Before the election the Conservatives indicated that if elected they would consult further on the proposals and consider how any new collective action mechanism should fit in with existing procedures. The new government has, however, not yet clarified its policy in this area, and the issue is not specifically addressed in either the Coalition Agreement or the Queen's Speech.