Members of the European Parliament's Legal Affairs Committee on Thursday 6 December supported the proposal to create a collective redress mechanism in the EU for European consumers deliberately harmed by unfair and illegal practices of the same company, to obtain compensation for the damage suffered. The ‘dieselgate’ scandal was on everyone's mind.
By adopting the amended report by French MEP Geoffroy Didier (EPP), MEPs strengthened the European Commission's proposal in the interests of consumers by a very large majority (21 votes to 2 with no abstentions). All the compromise amendments supported by the S&D, Greens/EFA, GUE/NGL, ELDD and, to a lesser extent, ALDE, were adopted (see EUROPE 12153).
The proposal for a Directive on representative actions in the field of the protection of the collective interests of consumers was presented in April as part of a ‘New Deal for Consumers'. The rapporteur has been given the mandate to open negotiations with the Council - a way of putting pressure on this institution which has not yet decided its position.
Mr Didier tried to ensure that this mandate was not voted on, arguing that the Council will not be ready until May and wishing a vote at first reading in plenary "so that we can hold a consolidated European Parliament position before the European elections and Parliament can keep its hand". According to one source, it is reportedly the German coordinator within the EPP who would have liked this postponement. The other political groups decided otherwise, by a vote.
Mr Didier described this vote as a "first victory for consumers", while stressing the importance of the balance between "facilitating access to justice for European citizens by giving them new rights and protecting businesses by creating safeguards to prevent the risk of possible abusive claims".
Under the agreed text, the future directive will cover infringements of European law that protects the collective interests of consumers in a wide range of areas, such as data protection, financial services, travel and tourism, telecommunications, the environment, but also health, MEPs said.
Only eligible entities, such as consumer associations and certain independent bodies designated by Member States, not-for-profit and free of any agreement with a law firm, could represent consumers. MEPs introduced the 'loser pays' principle to encourage justified collective action and discourage any frivolous action.
The future rules would strengthen the right of access to justice by allowing consumers to join forces across borders and jointly demand an end to illegal practices, or compensation for the damage suffered. They would also: - harmonise collective redress mechanisms and eliminate disparities between Member States; - reduce the financial burden and make redress more accessible through collective representation; - ensure a balance between citizens' access to justice and the protection of companies against unfair prosecution.
Mady Delvaux (Luxembourg), shadow rapporteur for the S&D group, welcomed the result. "Despite strong lobbying from multinational companies and right-wing groups, we have managed to strengthen these proposals. We have ensured that there is no exception for air and rail passenger rights," she commented. And to welcome the fact that consumers will not have to wait years to obtain compensation, since the proposal, if adopted, will allow parallel legal proceedings, one on the offence itself, the other on the subject of the redress.
"Thanks to a coalition of progressive forces, this text has been amended to be more consumer friendly than the Commission's proposal," said Virginie Rozière (S&D, France), citing the extension of the scope to data protection and health.
At Eurochambres there is consternation. The organisation believes that the text does not guarantee the desired balance and "will only contribute to the creation of an abusive litigation culture [...] which is neither beneficial to consumers nor to businesses", according to Eurochambres director Arnaldo Abruzzini. His association would have liked in particular the requirement of a consumer mandate to launch a collective action (opt-in principle).
The European Consumers Organisation (BEUC), which has been calling for a real class action for years, welcomed the vote. "The diesel emissions scandal three years ago showed how poorly equipped consumers are when a company the size of Volkswagen deceives them. This vote is a strong signal that the situation must change," said the organisation's director, Monique Goyens.
If the Council does not adopt its position quickly, it is likely that the dossier will be submitted to a first reading vote in the European Parliament at the February or March plenary session. (Original version in French by Aminata Niang)