Monday, 24 May 2010

Let's stick together

On 18 May the European Economic and Social Committee (EESC) published an Opinion on the ‘Green Paper on Consumer Collective Redress’. The EESC points out that the question of collective judicial redress (‘class action’) has been under discussion since 1985 and urges for decisions to be taken and schemes being implemented without further delay. It maintains that consumer redress is a fundamental right and that ‘[c]ollective redress mechanisms are necessary to give consumers a realistic and efficient possibility to obtain compensation in cases of damages of distinct, numerous and similar nature’. However, it takes care to emphasise that a European collective action should respect the limitations imposed by the Treaty and the national differences in procedural and constitutional law.

Taking into account these factors, the EESC is in favour of:

- an EU Directive to ensure a basic level of harmonisation and to leave at the same time sufficient leeway for those countries which to date do not have collective judicial redress systems in place (…);

- safeguards to make sure that collective actions do not take the form of the class actions employed in the USA (…);

- a combined system of group actions, which combine the advantages of the two systems of ‘opt in’ and ‘opt out’, depending on the nature of the interests at stake, the determination of the group members or the lack of it, and the extent of individual damage (…);

- granting individuals the right to opt-in to aggregate litigation proceedings rather than simply presuming them to be a party to it unless they opt out (…);

- the Commission’s statement that any EU mechanism ought to prevent unmeritorious claims and that the judge can play an important role in establishing whether a collective claim in unmeritorious or admissible (…);

- granting victims full compensation of the real value of the loss suffered (…);

- such a collective judicial mechanism [being] guaranteed sustainability in terms of adequate funding;

- the system (…) cater[ing] for a system of appeals.

Furthermore, the EESC recommends the Commission to take further action to encourage the development of alternative means of consumer redress (internal complaint handling systems, alternative dispute resolution), which consumers could use before they resort to the judicial system.

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