CCBE comments on the proposed Directive regarding collective redress
On 18 May, the Council of Bars and Law Societies of Europe (CCBE) issued a set of preliminary comments on the recently published proposal from the Commission for a Directive on representative actions for the protection of the collective interests of consumers.
The CCBE represents the bars and law societies of 45 countries, and through them more than 1 million European lawyers. The CCBE regularly responds on behalf of its members on policy issues which affect European citizens and lawyers.
The CCBE’s response was mainly triggered by the Commission’s press release announcing its proposal which suggested that law firms should not take part in the process of collective redress in order to avoid “abusive or unmerited litigation”. This statement clearly misrepresents the role of lawyers. Qualified entities or groups of consumers will naturally need the advice and assistance of lawyers in order to prepare and file proceedings. Lawyers are key defenders of consumers’ and citizens’ rights. Their involvement serves the rule of law and extends access to justice.
Therefore, the principal issue addressed by the CCBE in its observations is that the proposal reserves the possibility to initiate representative actions aimed at the protection of the collective interests of consumers to qualified entities only. The CCBE considers that there are other and less restrictive mechanisms to prevent unreasonable, artificial and vexatious actions, such as introducing the loser-pays-principle or by prohibiting the right of representative entities or lawyers to receive a share of what was obtained in the proceedings. The proceedings are likelier to be treated diligently and efficiently, if those who are bringing the collective redress proceeding are qualified legal professionals. Moreover, the monopoly provided to qualified entities raises various difficulties, for example, in case of absence or inaction of qualified entities, conflict of interest, or refusal or obstruction of qualified entities.
The CCBE has also serious concerns about the assistance which qualified entities may receive from Member State authorities (Article 15). This may lead to procedural inequality and actions that are politically motivated or, for reasons that are not made clear, target traders in certain Member States.
In addition, the CCBE disagrees with the decision of the Commission (contrary to its previous recommendations of 11 June 2013) to establish an opt-out instead of an opt-in procedure. As collective redress is based on individual claims, the opt-in principle, whereby the natural or legal persons joining the action should do so based on their express consent only, is the only way to respect appropriately and guarantee the freedom of every single consumer to decide individually whether to pursue their claim or not in a self-determined and active way. Consumers should be required to say “yes” to opt-in to collective redress proceedings and should not be forced to take an action in order to not be part of a collective redress mechanism they do not agree with.
Another concern includes the effects of final decisions which applies unilaterally in favour of the consumers/qualified entities establishing the existence of an infringement (Article 10). To guarantee procedural equality, the binding effect should also apply to the defendant so that no other action can be brought by another qualified entity based on the same alleged infringement.
The CCBE will carry on assessing this proposal and, in due course, issue a more detailed position paper.
The Law Society would like to thank our guest contributer for authoring this article:
Simone Cuomo, Senior Legal Advisor at CCBE