Collective Actions in Europe a Comparative, Economic And
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SPRINGER BRIEFS IN LAW Csongor István Nagy Collective Actions in Europe A Comparative, Economic and Transsystemic Analysis SpringerBriefs in Law SpringerBriefs present concise summaries of cutting-edge research and practical applications across a wide spectrum of fields. Featuring compact volumes of 50 to 125 pages, the series covers a range of content from professional to academic. Typical topics might include: • A timely report of state-of-the art analytical techniques • A bridge between new research results, as published in journal articles, and a contextual literature review • A snapshot of a hot or emerging topic • A presentation of core concepts that students must understand in order to make independent contributions SpringerBriefs in Law showcase emerging theory, empirical research, and practical application in Law from a global author community. SpringerBriefs are charac- terized by fast, global electronic dissemination, standard publishing contracts, standardized manuscript preparation and formatting guidelines, and expedited production schedules More information about this series at http://www.springer.com/series/10164 Csongor István Nagy Collective Actions in Europe A Comparative, Economic and Transsystemic Analysis Csongor István Nagy University of Szeged, Department of Private International Law Hungarian Academy of Sciences Federal Markets “Momentum” Research Group Szeged, Hungary ISSN 2192-855X ISSN 2192-8568 (electronic) SpringerBriefs in Law ISBN 978-3-030-24221-3 ISBN 978-3-030-24222-0 (eBook) https://doi.org/10.1007/978-3-030-24222-0 © The Editor(s) (if applicable) and The Author(s) 2019. This book is an open access publication. 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This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Preface In the last three decades, Europe has seen a remarkable proliferation of collective action legislation, making class actions one of the most successful export product of the American legal scholarship. While its spread has been surrounded by distrust and suspiciousness, today more than half of the EU Member States have introduced collective actions for damages and, from those who did, more than half chose, to some extent, the opt-out system. This book gives an analytical presentation of how Europe made class actions in its own image. It demonstrates why collective actions have been felt needed from the perspective of access to justice and effectiveness of law and presents the European debate and the deep layers of the European reaction and resistance. It unfolds how the Copernican turn of class actions questions the fundamentals of the European thinking about market and public interest. It ana- lyzes, through a transsystemic presentation of the European national models, the way collective actions were accommodated with the European regulatory envi- ronment, the novel and peculiar regulatory questions they had to address and how and why they work differently on this side of the Atlantic. The author is indebted to Prof. Laura Carballo, Prof. Caroline Cauffman, Prof. Laura Ervo, Dr. Andre Fiebig, Dr. Pavle Flere, Dr. Maciej Gac, Prof. Clifford A. Jones, Prof. Christian Kersting, Prof. Jurgita Malinauskaite, Prof. Francisco Marcos, Prof. Manos Mastromanolis, Prof. Alexandra Mikroulea, Dr. Anton Petrov, Prof. Barry J. Rodger, Dr. Thibault Schrepel, Prof. Caterina Sganga, Prof. Miguel Sousa Ferro, Prof. Astrid Stadler and Dr. Magdalena Tulibacka for their comments. Of course, all views and any errors remain the author’s own. This volume was published as part of the research project of the HAS-Szeged Federal Markets ‘Momentum’ Research Group. It draws on the author’s following publications: Nagy CI (2013) Comparative collective redress from a law and eco- nomics perspective: without risk there is no reward! Columbia J Eur Law 19(3): 469–498; Nagy CI (2015) The European collective redress debate after the European Commission’s Recommendation: one step forward, two steps back? Maastricht J Eur Compar Law 22(4):530–552. The manuscript was closed on v vi Preface 1 April 2019. Hence, it does not incorporate the Italian legislation adopted on 12 April 2019 (Legge, 12/04/2019 n° 31. Disposizioni in materia di azione di classe (19G00038), GU Serie Generale n. 92 del 18-04-2019). Szeged, Hungary Csongor István Nagy Contents 1 Introduction ........................................... 1 References ............................................. 7 2 Why Are Collective Actions Needed in Europe: Small Claims Are Not Reasonably Enforced in Practice and Collective Actions Ensure Effective Access to Justice ........................... 9 2.1 What Are the Hurdles Faced by Small Claims in Europe ....... 11 2.2 How Do Collective Actions Overcome the Above Hurdles and Why Are They Efficient? ........................... 14 2.3 Why Are Collective Actions Not Working Spontaneously if They Are Efficient? ................................. 16 2.4 How Could Collective Actions Be Made Work?.............. 17 2.5 Summary .......................................... 20 References ............................................. 20 3 Major European Objections and Fears Against the Opt-Out System: Superego, Ego and Id ............................. 23 3.1 European Objections Against Class Actions: Scruples or Pretexts? ........................................ 23 3.1.1 Constitutional Concerns: Private Autonomy and Tacit Adherence ............................ 24 3.1.2 Opt-Out Collective Actions Are Alien to Continental Legal Traditions ............................... 30 3.1.3 It Is Very Difficult to Identify the Members of the Group and to Prove Group Membership ................... 33 3.1.4 Opt-Out Collective Actions Would Lead to a Litigation Boom and Would Create a Black-Mailing Potential for Group Representatives ........................... 35 vii viii Contents 3.2 The Headspring of European Taboos and Traditionalism: Party Autonomy and the State’s Prerogative to Enforce the Public Interest .................................... 38 3.3 Summary .......................................... 40 References ............................................. 42 4 Transatlantic Perspectives: Comparative Law Framing .......... 45 4.1 Disparate Regulatory Environments ....................... 45 4.2 Why Should Europeans Not Fear the American Cowboy? Diverging Effects of Disparate Regulatory Environments ....... 52 4.3 The Novel Questions of Collective Actions in Europe ......... 59 4.3.1 Funding in the Absence of One-Way Cost-Shifting, Contingency Fees and Punitive Damages ............. 59 4.3.2 Two-Way Cost-Shifting .......................... 62 4.3.3 Distrust of Market-Based Mechanisms in the Enforcement of Public Policy (No Private Attorney General) ..................... 62 4.3.4 European Opt-In Collective Actions and Joinders of Parties..................................... 63 4.3.5 Opt-Out Systems and the “Only Benefits” Principle ...... 64 4.4 Summary .......................................... 66 References ............................................. 67 5 European Models of Collective Actions ....................... 71 5.1 The European Landscape: To Opt in or to Opt Out? ........... 73 5.2 Purview: Step-by-Step Evolution of a Precautious Revolution .... 85 5.3 Pre-requisites of Collective Action and Certification ........... 88 5.4 Standing and Adequate Representation .................... 95 5.5 Status of Group Members in Opt-in Proceedings: Liability for Legal Costs and Res Judicata Effect ............. 98 5.6 Status of Group Members in Opt-Out Proceedings: Liability for Legal Costs, Res Judicata Effect and the “Only Benefits” Principle ........................ 101 5.7 Enforcement ........................................ 105 5.8 Summary .......................................... 106 References ............................................. 108 6 Conclusions ............................................ 113 6.1 Collective