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EU principles for collective redress mechanisms 12/06/2013 The European Commission has set out a series of common, non-binding principles for collective redress mechanisms in the Member States.

EU principles for collective redress mechanisms

The European Commission has set out a series of common, non-binding principles for collective redress mechanisms in the Member States, so that citizens and companies can enforce the rights granted to them under EU law where these have been infringed.

The Recommendation aims to ensure a coherent horizontal approach to collective redress in the European Union without harmonising Member States' systems.

“Member States have very different legal traditions in collective redress and the Commission wants to respect these. Our initiative aims to bring more coherence when EU law is at stake,” said Vice-President Viviane Reding, the EU’s Justice Commissioner. “This Recommendation is a balanced approach to improve access to justice for citizens while avoiding a US-style system of class actions and the risk of frivolous claims and abusive litigation.”

The Commission's Recommendation invites all Member States to have national collective redress systems and sets out a number of common European principles that such systems should respect:

  • Member States should have a system of collective redress that allows private individuals and entities to seek court orders ceasing infringements of their rights granted by EU law (so called "injunctive relief") and to claim damages for harm caused by such infringements (so called "compensatory relief") in a situation where a large number of persons are harmed by the same illegal practice.

  • Member States should ensure that the collective redress procedures are fair, equitable, timely and not prohibitively expensive.

  • Collective redress systems should, as a general rule, be based on the "opt-in" principle, under which claimant parties are formed through directly expressed consent of their members.

  • The Commission is recommending important procedural safeguards to make sure there are no incentives to abuse collective redress systems. Member States should, for example, not permit contingency fees risking creating an incentive for abuses. In addition, the entities which are representing claimants have to be of non-profit character, to ensure that they are guided by the interests of those affected in situations of mass damages.

  • The central role in the collective litigation should be given to the judge, who should effectively manage the case and be vigilant against any possible abuses. The Commission has not ruled out third party financing for European collective redress, but proposes conditions, in particular related to transparency, to ensure there is no conflict of interests.

  • The Recommendation also promotes Alternative Dispute Resolution, requiring that this possibility is offered to the parties on a consensual basis.
     

 

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