Consultation on future for collective actions in Europe

On 4 February 2011, the European Commission launched a public consultation entitled "Towards a Coherent European Approach to Collective Redress". The consultation is aimed at identifying common legal principles to underpin any future EU initiatives on collective redress in particular sectors and to explore the fields in which new procedures for collective redress might be desirable.

In putting forward the consultation the Commission is keen to distance itself from the perceived abuses of US-style class actions. The Commission's press release states that it "firmly opposes introducing 'class actions' along the US model into the EU legal order, or creating incentives for abusive litigation."

Over the past few years the European Commission has taken steps toward the reform of collective redress procedures in two areas:

• Competition claims: A White Paper was published in April 2008, which included provision for opt-out actions. A draft directive based on those proposals was withdrawn just days before its planned publication in October 2009.
• Consumer claims: A Green Paper was issued 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.

The current consultation may be seen as an attempt to ensure a more joined-up approach across policy areas before introducing changes for any particular sector. It asks whether the Commission's work should be extended to other areas of EU law besides competition and consumer protection, and whether any possible EU initiative on collective redress should be of general scope or limited to specific policy fields.

The Commission emphasises that nothing is decided at this point and that all views will be taken into account "to identify whether collective redress may or may not be a suitable subject for EU legislation". In a speech in October last year, however, the Competition Commissioner indicated that once the common principles had been agreed following the anticipated consultation, the Commission intended to present a proposal on antitrust damages actions, most likely in the form of a directive setting out common standards and minimum requirements for national systems of antitrust damages actions.

Herbert Smith will be submitting a response to the consultation by the deadline of 30 April. If you would like more information, or to discuss the consultation, please contact Stephen Wisking or Maura McIntosh.