After years of debate, Europe is seeing its first regional regime for group action claims, ushering in collective redress procedures for consumers at an EU-wide level with the aim of introducing a common framework and approach to collective actions across the EU.
The EU Representative Action Directive entered into force on 24 December 2020 and EU Member States were given 24 months to transpose the directive into national law, and an additional six months to implement it. With the new law applying to representative actions filed on or after the application date of 25 June 2023, and while we do not expect to see an outpouring of US-style collective actions, this new common framework will most probably result in an increase in claims.
A pan-European panel of lawyers from our EMEA Disputes practice recently hosted a webinar on the key takeaways of the EU Representative Action Directive providing a cross-border overview of some of the key takeaways of the Directive and considering the impact that these could have on companies facing potential group actions, including:
- Qualified Entities: under the new Directive, representative actions can only be brought by organisations that have been designated as qualified entities by a Member State. How has this concept developed in each jurisdiction? Who grants qualification? What requisites need to be met in order to be considered a qualified entity?
- Opt-Out / Opt-in: the Directive provides that each Member State can decide whether it wants to set up an opt-out system (all consumers integrating the collective are considered, unless they explicitly declare their desire not to be represented by the qualified entity), or an opt-in system (only consumers explicitly declaring their desire to be represented by the qualified entity will be considered represented). Will this facilitate mass claims?
- Third party funding: the Directive states that Member States must ensure that conflicts of interest are avoided in third-party funded proceedings and that consumers’ collective interests remain protected. Will this influence the choice of jurisdiction for the claim?
- Relevant particular features appearing in national frameworks: while the Directive sets out a minimum harmonisation threshold that must be respected, Member States have, at times, introduced modifications to their domestic class action frameworks that go beyond the scope of the EU norm. Examples of this as they appear in French, German, Italian and Spanish legislations.
Our panel included team members from across the region: Jaime de San Roman, Martin Le Touzé, Alexandra Neri, Pietro Pouché, Giulia Maienza, Mathias Wittinghofer, Christoph Zuschlag.
To watch the webinar: