On 30 June and 7 July 2020 respectively the Council of the European Union and the European Parliament’s Legal Affairs Committee confirmed the compromise text of a new Directive on representative actions for the protection of the collective interests of consumers, repealing Directive 2009/22/EC and paved the way for its formal adoption in Council and Parliament.
The Directive aims to increase consumer protection and it is part of the “New Deal for Consumers” which was launched in 2018. The new rules introduce a harmonisation of collective representative actions in Member States both in cross-border and domestic cases. The main elements are:
- Consumers in every Member State must have access to (?) at least one representative action procedure for injunction and redress measures which allows for representative action at national and EU level;
- The scope of collective action includes trader violations in areas such as data protection, financial services, travel and tourism, energy, telecommunications, environment and health, as well as air and train passenger rights, in addition to general consumer law;
- Qualified entities (organisations or a public bodies) will be empowered and financially supported to launch actions for injunction and redress on behalf of groups of consumers and will guarantee consumers’ access to justice;
- The rules distinguish between cross-border cases and domestic ones on designation criteria for qualified entities. For cross-border case, entities must comply with a set of harmonised criteria: they have to demonstrate 12 months of activity in protecting consumers’ interest prior to their request to be appointed as a qualified entity, have a non-profit character and ensure they are independent from third parties whose economic interests oppose the consumer interest. For domestic actions, member states will set out their own criteria consistent with the objectives of the directive and which could be the same as those set out for cross-border actions;
- The “loser pays principle” is introduced, to ensure that the defeated party pays the costs of the proceedings of the successful party;
- It is left to the discretion of the Member States whether the representative action can be brought in judicial or administrative proceedings, or both;
- Member States should provide for an opt-in or opt-out mechanism, or a combination of both, and should be able to decide at which stage of the representative action the individual consumers could exercise their right to opt in or opt out from the proceedings;
- It is always possible to reach a settlement of redress, either on a proposal by the parties or on invitation by the court; the settlement must be approved by the court it is binding for the parties and the consumers concerned.
The proposal can be found here.