Tuesday, 26 October 2010

EU collective redress regulation needed? Undoubtedly so.

Joaquín Almunia (Vice President of the European Commission responsible for Competition Policy) gave a speech in Brussels on 21 October 2010 addressing the 'State of Play and Future Outlook'.

In his speech Mr. Alumnia devotes some time to the problem of private enforcement and the lack of effective measures for collective redress.

"All EU citizens and businesses should enjoy the right to obtain compensation for damages caused by a breach of EU law. But in reality, their rights depend on where they live in Europe. About half of the Member States don't have any form of collective action, and even where this right is recognised, its use is very diverse both in scope and effectiveness.

Last week, the College of Commissioners debated these and other issues related to collective redress. The discussion was prepared by an information note I put forward together with my colleagues Reding and Dalli, developing the ideas the three of us had anticipated to the EP during our confirmation hearings last January.

The College agreed on the need for a coherent EU framework to strengthen collective redress across Europe that would draw on the different European national traditions. At the same time, we are committed to avoid the excesses and drawbacks of the US system.

Five principles for group actions across the Union were agreed:

•We should ensure effective compensation for everyone who has suffered damages, recalling that group claims are often cheaper and more practical than individual claims.

•We should put strong safeguards against abusive litigation;

•We should consider settlements or systems in addition to court proceedings to resolve disputes;

Collective judgements should be enforceable throughout the EU; and

•Finally, we should ensure that adequate financing can be allowed so as to give citizens and businesses – especially SME’s – fair access to justice.

We decided to launch a public consultation from this coming November until the end of February 2011. In light of the replies that we will receive, we will propose a framework for collective redress.

This framework would become the basis for possible legislative initiatives in several policy areas including competition, environment, consumer protection, and others.(...)"

It's good to hear that we are getting closer to having the collective redress actions for consumers sufficiently regulated.

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