COLLECTIVE REDRESS

The European Commission published a Green Paper on Consumer Collective Redress in November 2008 and followed this up with a consultation paper in May 2009. This considers ways of making it easier for consumers across Europe to bring joint claims for compensation. The Commission has expressed a wish to avoid introducing elements of US-style class actions, contingency fees, punitively high damages, advance disclosure of the defendant’s commercial position and an opt-out rule that brings all victims of the same malpractice into a claim unless they have asked to be removed. Instead the Commission has proposed five options:

1. No action, relying instead on the existing national and EU measures to achieve adequate redress for consumers. At European level, consumer redress would be based on the Injunctions Directive, the European Small Claims Regulation (effective 1 January 2009), and the Mediation Directive (to be implemented by 2011).
2. Developing self-regulation. This aims at encouraging development within businesses of self-regulatory measures on complaints handling.
3. Cooperation between EU Member States, so that consumers throughout the EU would be able to use non-binding collective redress mechanisms, including existing Alternative Dispute Resolution (ADR) schemes, already available in different Member States.
4. Binding setting up of collective ADR schemes and judicial collective redress schemes with benchmarks in combination with additional powers under the Consumer Protection Co-operation Regulation.
5. An EU-wide judicial collective redress mechanism including collective ADR.

ABTA Position

ABTA will be making representation via ECTAA. In the absence of a single, coherent legal framework across the EU, we do not believe that the EU has a role in attempting to establish a single framework for consumer collective redress and so we oppose options 4 and 5. It would be better to encourage development of self-regulatory measures on complaints handling within businesses, underpinned by sectoral Codes of Practice and recognising international standards already in existence on complaints. There are a number of existing and upcoming initiatives that need to be properly assessed before even considering new binding tools. These include the upcoming Mediation Directive and recently introduced European Small Claims Procedure, the existing Injunctions Directive and a review of the Consumer Protection Co-operation Regulation (CPC). Our aim is to increase cooperation between national public authorities across the EU to reduce the risk of consumer detriment from unfair and deceptive practices. This can be better achieved by using the Unfair Commercial Practices Directive and proposed Consumer Rights Directive coupled with the CPC to ensure that public enforcement works better.

Last updated: 23 November 2009