The European Collective Redress Debate after the European Commission's Recommendation
| Author | Csongor István Nagy |
| Published date | 01 August 2015 |
| Date | 01 August 2015 |
| DOI | http://doi.org/10.1177/1023263X1502200404 |
| Subject Matter | Article |
530 22 MJ 4 (2015)
THE EUROPEAN COLLECTIVE REDRESS
DEBATE AFTER THE EUROPEAN
COMMISSION’S RECOMMENDATION
One Step Forward, Two Steps Back?
C I N*
ABSTRACT
e paper examines, through the pr ism of the European Commission’s Recommendation,
the European approach on collective redress. First, it demonstrates that the introduction
of collective redress in respect of small claims is necessary and the opt-out scheme is
preferable. Second, it refutes the major arguments and fears against the opt-out system.
ird, it demonstrates that the pivotal question of collective redress is nancing and the
law should provide a risk premium to the g roup representative.
Keywords: class act ion; collective redress; comparative law; EU law; legal tra nsplants
§1. IN TRODUCTION
On 11June 2013, the European Commission published a Recommendation on collective
redress (the Recommendation),
1
proposing that Memb er States adopt collective redress
* Csongor Istvá n Nagy,LL.M.,Ph.D., S .J.D, dr. juris is an Associate Profes sor in Hungary, the head of
the Depart ment of Private International L aw at the University of Szeged, Facu lty of Law, the leader of
the Federal Ma rkets ‘Momentum’ Research Group at the Ce ntre for Social Sciences of the Hung arian
Academy of Sciences, a nd an attorney-at-law admitte d to the Budapest Bar. Furt hermore, he is visiting
professor at the Sapienti a University of Transylva nia (Romania) and at t he Riga Graduate Scho ol of Law
(Latvia). His paper w as written with t he generous support of the Hungari an Scienti c Research Fund ,
within t he frame of the OTKA PD-101612 research programm e. e author is indebted to Professor
Albert Foer, Profess or Marie-Pierre Gr anger, Professor Antonio Gid i, Professor Joël Monéger, Mr
Frédéric Pelouze and P rofessor Spencer Weber Waller for their help a nd comments on the earlier d ra
of this paper. Of cour se, all views and any error s remain the author’s own. He is current ly Fulbright
visiting profe ssor at Indiana Universit y, Bloomington.
e European Col lective Redress Deb ate a er the European C ommission’s Recommendation
22 MJ 4 (2015) 531
mechanisms for violations of EU law. e Recommendation adopted a conservative
approach, expressing a strong preference towards the opt-in system.
2
is mea ns that only
those group members in a class action who expressly assented to the collect ive action are
involved in it: contrary to t he ‘notice and opt-out’ (herea er, ‘opt-out’) system, where silence
implies assent and those g roup members who do not want to get involved have to opt out.
e Recommendation seems to put an end to a decade-long European debate on
collective redress, w hich – on the level of EU law – ignited in the context of competition
law’s private enforcement and then gradually al so spread to other elds of law.
Collective redres s is an extremely controversial issue, and its h istory in Europe is ful l
of hesitation, scare-mongering and phobia of novel legal s olutions.
By way of example, although Italy adopted a law on col lective proceed ings in 2007, the
entry into force of this law was suspended for two yea rs and, nally, a new act was adopted in
2009.3 In Hungary, the President of the Republic vetoed an Act on clas s actions adopted by
the Hungarian pa rliament in 2010 (the act followed the opt-out approach).4 In July 2009, the
conversion of the opt-in scheme into an opt-out system was refused in E ngland and Wales.5
It is an interesting facet of the history of collective redres s in Europe that proposals
and conceptions elaborated by scholars and ex perts are torpedoed by intensive economic
lobbying6 and fai l to get through the politica l lter: in some cases the y were fully rejected
1 Comm iss ion Re com mend ati on of 11 June 2013 o n com mon p rin cipl es fo r inj unc tive and c omp ensa tor y
collective redress mechanisms in the Member States concerning violations of rights granted under
Union Law, [2013] OJ L 201/60.
2 Comm iss ion Re com mend ati on of 11 June 2013 o n com mon p rin cipl es fo r inj unc tive and c omp ensa tor y
collective redress mechanisms in the Member States concerning violations of rights granted under
Union Law, para. 21 (‘ e claimant party should b e formed on the basis of ex press consent of the
natural or lega l persons claim ing to have been harme d (“opt-in” principle). Any exception to this
principle, by law or by court order, should be duly justi ed by reasons of s ound adminis tration of
justice.’). For a general over view on the Recommend ation see S. Weber Waller, ‘ e Fa ll and Rise of t he
Antitrus t Class Action’, SSRN (2015), http://ssrn.com/abstract=2641867, p.14–20.
3 See Act 244 of 24D ecember 2007 (Legge 24 Dicem bre 2007, n. 244), Act 99 of 23July 2009 (Legge 23
Luglio 2009, n. 99), www.tedioli.com/Italian_class_action_text_english_version.pdf; M. Siragusa and
E. Guerri, ‘Col lective Actions in Ita ly: Too Much Noise for Nothing?’, 1 Global Competition Litig. Rev.
(2008), p.32; R. Nashi, ‘Ita ly’s Class Action Exper iment’, 43 Cornell Int’ l L.J. (2010), p.147.
4 See Proposal No T/11332 on the Amendment of Act I II of 1952 on the Civil Procedu re (T/11332. s zámú
törvényjavasl at a polgári perrendtartá sról szóló 1952. évi III. törvény mó dosításáról). As noted above,
the proposal wa s vetoed by the President of the Republ ic of Hungary. e Budapest Bar a lso expressed
its concerns as to t he text of the Proposal .
5 e Government’s Response to th e Civil Justice Cou ncil’s Report, Improv ing Access to Justice t hrough
Collective Actions (2009), http://collections.europarchive.org/tna/20100208150045/http:/www.justice.
gov.uk/about/docs/government-response- cjc-collective -actions.pdf. S ee C. Hodges, ‘Colle ctive Redress
in Europe: e New Model’, 29 Civil Jus tice Q. (2010), p.370, 376–379; C. Hodges, ‘From Class Actions
to C olle ct ive R edr ess : A Re volu tio n in A ppro ach to Co mpen sat ion’, 28 Civi l Just. Q. (20 09), p.41, 50– 66 .
6 ‘ e re is a strong, well-or ganized, wel l-funded and in uential opposition to t he proposal on clas s
actions’. P.H. Lindblom, ‘Grupptryc k mot grupptalan’ (Group Pressure again st Group Action), Svensk
Juristti dning (1996), p.85, quoted in M. Väli mäki, ‘Introducing C lass Actions in Finla nd – Lawmaking
Without Economic Ana lysis’, SSRN (2007), http://ssrn.com/abstract=1261623, p.9, footnote 32. S ee M.
Välimä ki, ‘Introduc ing Clas s Actions in Fi nland – Law mak ing Without Econom ic Analy sis’, SSRN (200 7),
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