A Significant Step Forward for European Collective Redress
“Last week heralded a welcome and significant step forward for consumer rights in Europe as the Parliament’s Legal Affairs Committee (JURI) voted unanimously to allow the draft Directive on collective redress to move to the next stage of the legislative process.
The draft Directive on representative actions for the protection of the collective interests of consumers was published in April 2018 as part of the Commission’s ‘New Deal for Consumers’ package and repeals the Injunctions Directive (2009/22/EC). The Directive proposes something that ought not to be controversial: that consumers affected by the wrongful actions of a trader should to be able to band together to seek redress for the harm caused to them, rather than each having to pursue their own individual claim through the courts. It is well-acknowledged, including by European policymakers and particularly in the wake of Dieselgate, that consumers in many Member States who have suffered as a result of corporate harm do not have effective access to justice and that a well-balanced and peculiarly European system of collective redress is a necessary tool in consumers’ armoury.
Whilst opponents of collective redress have lobbied very hard against the draft Directive, the JURI committee voted to reject amendments which would have severely limited the Directive’s scope and effectiveness (including as to third-party funding and the types of actions which should be able to be brought). This is a strong and positive indicator that European lawmakers appreciate the threat to economic and consumer confidence caused by unaddressed corporate scandals and that they will no longer tolerate any further widening of the power imbalance between consumers and businesses. The draft Directive will now go forward to a full vote in the Parliament and we are hopeful that lawmakers will approve the legislation such that it can move forwards.”