Scandals Dieselgate, Cambridge Analytica, cancelled flights: consumers in the European Union cheated by the same illegal practices of large companies may soon be able to group together and be represented collectively by qualified non-profit entities to assert their rights, collectively, in court if necessary, and obtain compensation for the damage suffered.
A step in this direction was taken on Thursday 28 November. The EU Council reached political agreement (‘general approach’) in principle, by qualified majority, on the proposal for a Directive establishing minimum rules for a ‘European-style’ collective redress procedure throughout the EU.
This text, which modernises the 2009 Directive on representative actions in the field of the protection of the collective interests of consumers, was presented in April 2018 as part of the New Deal for consumers.
All delegations thanked the Finnish Presidency for the enormous amount of work done, but also all previous presidencies (Bulgarian, Austrian, Romanian).
In a public debate, most delegations welcomed the “right balance” between the effectiveness of the future mechanism in terms of consumer protection and legal certainty for businesses, the fair treatment of operators and the improvement of the conditions of fair competition.
However, Cyprus, Latvia, Luxembourg, Slovakia and the Czech Republic tabled a joint statement deploring the low level of harmonisation expected and the uncertainty that the future mechanism will generate (see EUROPE 12377/13). Germany abstained because it would have liked the requirements for qualified entities to prevent inadmissible complaints.
“This future Directive should make it possible, for the first time in the EU, to take representative action and make it available to consumers in all Member States. We expect it to have a positive impact on trade in the internal market, increased consumer confidence and support for operators who will comply with these provisions”, said Finnish Employment Minister Timo Harakka.
The general approach makes a clear distinction between domestic and transnational collective redress.
In order to avoid abusive cross-border proceedings, the EU Council draws a distinction between the eligibility criteria for qualified entities entitled to bring domestic representative actions and those entitled to bring cross-border representative actions. The former will have to fulfil the criteria set out in the law of the Member State of designation, whereas the latter will have to fulfil the harmonised criteria set out in the Directive itself.
The text maintains the autonomy of Member States by allowing them to retain their existing collective redress mechanisms.
For representative actions for redress, Member States will be free to choose between an opt-in and an opt-out system. In an opt-in system, consumers will be required to express their wish to be represented by the qualified entity for the purpose of a particular representative action. In an opt-out system, consumers who do not wish to be represented by the qualified entity for the purpose of a particular representative action will be required to make a statement to that effect.
The scope of application is extended to damage resulting from dangerous medical products or devices.
All Member States that already have a collective redress procedure have welcomed the respect for subsidiarity.
“We support the idea of mutual cross-border recognition of qualified entities”, the Czech Minister stressed to explain the reason for the joint declaration of the five countries with a reservation. These countries, notably Latvia and Luxembourg, expressed the hope that the text could be improved before the start of interinstitutional negotiations.
The European Parliament had given its opinion in March (see EUROPE 12222/11). Negotiations are expected to be difficult. The Croatian Minister indicated that consumer protection will be a priority of the Croatian Presidency.
In the opinion of Commissioner Jyrki Katainen, both Parliament's amendments and the EU Council's general approach have a common aim: to clarify the workings of this future mechanism aimed at strengthening the level of consumer protection by establishing an effective model for representative action. “However, the Commission has a reservation on the whole text”, he said. (Original version in French by Aminata Niang)