EU proposes class action rights for European consumers

Posted on 28 Nov 2008 at 10:29

The European Commission is considering whether to allow consumers to group together to take legal action against companies by implementing class action lawsuits.

Class actions are common in the US, allowing complainants to band together to present a common case against a company. Apple and Microsoft, for example, frequently face such actions.

EU consumer commissioner Meglena Kuneva outlined the proposals in a new discussion paper on Collective Consumer Redress amid concerns that where large numbers of consumers have suffered there is currently no working mechanism for redress.

“Consumers who are victims of illegal activities, such as overcharging, misleading advertising or outright scams, have a right to compensation," she said. "Currently, particularly where there are small scattered claims, this right is often theoretical because of the obstacles to exercising it in practice.

“There is a justice gap, a welfare gap and there are black holes in our redress system that is leaving consumers with nowhere to go. The present situation is clearly unsatisfactory. We must find a way to make the basic right to consumer redress a reality for more people.”

But she said that any decision to allow class actions “should avoid elements which are said to encourage a litigation culture such as is said to exist in some non-European countries, such as punitive damages, contingency fees and other elements”.

Kuneva is also concerned that class actions should not be prohibitively expensive. Possible measures to avoid this include exempting plaintiffs from paying court fees or capping legal fees. Alternatively the EU could provide public funds, she says.

Author: Simon Aughton

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