STUDY Requested by the JURI committee Collective redress in the Member States of the European Union Policy Department for Citizens' Rights and Constitutional Affairs Directorate General for Internal Policies of the Union PE 608.829 - October 2018 EN DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT FOR CITIZENS' RIGHTS AND CONSTITUTIONAL AFFAIRS LEGAL AFFAIRS COLLECTIVE REDRESS IN THE MEMBER STATES OF THE EUROPEAN UNION STUDY Abstract This study, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the Committee on Legal Affairs, aims to assess the current state of play of collective redress at national and European levels, evaluate the opportunity of a European intervention in the matter and provide the European Parliament with concrete recommendations. Both the assessment and the recommendations have been drafted keeping in mind the essential issue raised by collective redress: access to justice. This principle, which is essential in a Union enforcing the rule of law, is currently challenged by the existing divergences. As such the creation of harmonised collective redress mechanism is becoming an increasingly pressing matter. PE 608.829 EN ABOUT THE PUBLICATION This research paper was requested by the European Parliament's Committee on Legal Affairs and commissioned, overseen and published by the Policy Department for Citizens’ Rights and Constitutional Affairs. Policy Departments provide independent expertise, both in-house and externally, to support European Parliament committees and other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU external and internal policies. To contact the Policy Department for Citizens’ Rights and Constitutional Affairs or to subscribe to its newsletter please write to: [email protected] RESPONSIBLE RESEARCH ADMINISTRATOR Roberta PANIZZA Policy Department for Citizens' Rights and Constitutional Affairs European Parliament B-1047 Brussels E-mail: [email protected] MAIN AUTHORS Rafael AMARO, Associate Professor at the University Paris-Descartes, France Maria José AZAR-BAUD, Associate Professor at Paris-Sud University, France Sabine CORNELOUP, Professor at the University Paris II Panthéon-Assas, France Bénédicte FAUVARQUE-COSSON, Professor at the University Paris II Panthéon-Assas, France Fabienne JAULT-SESEKE, Professor at the University of Versailles-Saint-Quentin-en-Yvelines, France AUTHORS Alexandre BIARD, Postdoctoral researcher, Erasmus School of Law, University of Rotterdam Nicolas BLANC, Environmental issues specialist and CJEU cases specialist, France Francisco DE ELIZALDE, Associate Professor at the IE University, Spain Juanita GOICOVICI, Professor at the University Babeş-Bolyai, Romania Lukas KLEVER, Researcher at the University of Vienna, Austria Irene KULL, Professor at the University of Tartu, Estonia Yija LU, Practicing lawyer and economist, the United States and China Alberto MALATESTA, Professor at the University of Bocconi, Italy Séverine MÉNETREY, Professor of civil procedure at the University of Luxembourg, Luxembourg Denis PHILIPPE, Professor and practicing lawyer, Belgium Elise POILLOT, Professor at the University of Luxembourg, Luxembourg Sebastian SCHWAMBERGER, Researcher at the University of Vienna, Austria John SORABJI, Senior teaching fellow, University College London, United-Kingdom Astrid STADLER, Professor at the University of Konstanz, Germany Gaetano VITELLINO, Professor at the University of Cattaneo – LUIC, Italy Aneta WIEWIÓROWSKA-DOMAGALSKA, European Legal Studies Institute, Osnabrück Germany, Polish expert And, as part of their internship: Mariam HAWATH, student at University College London, United Kingdom Pauline MAZURIER-NOLIN, graduate student at Sciences-Po Paris, France Fiona ROUSSEAU, graduate student at University Paris II Panthéon-Assas, France LINGUISTIC VERSION Original: EN Manuscript completed in October 2018 © European Union, 2018 This document is available on the internet at: http://www.europarl.europa.eu/supporting-analyses DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. Policy Department for Citizens' Rights and Constitutional Affairs __________________________________________________________________________________________ CONTENTS LIST OF ABBREVIATIONS 7 EXECUTIVE SUMMARY 8 GENERAL INFORMATION: COLLECTIVE REDRESS IN THE MEMBER STATES OF THE EUROPEAN UNION 13 1. THE STATE OF PLAY OF COLLECTIVE REDRESS AT NATIONAL AND EUROPEAN LEVELS 15 KEY FINDINGS 15 1.1 The diversity of national mechanisms 17 1.1.1 The existence of a collective redress mechanism and the available forms of redress: the outcomes 17 1.1.2 The scope of national collective redress mechanisms 20 1.1.3 The opt-in and opt-out systems 22 1.1.4 Standing 27 1.1.5 Publicity and availability of information on collective redress 31 1.1.6 Financial issues 33 1.1.7 Alternative Dispute Resolution Mechanisms 38 1.1.8 Cross-border cases 39 1.1.9 Best practices 42 1.1.10 Shortcomings 43 1.2 The insufficiency of European action up to date 43 1.2.1 The existing sectoral legislative rules 43 1.2.2 Position of the European Commission 46 1.2.3 Position of the European Parliament 48 1.2.4 The position of the Court of Justice of the European Union 51 1.2.5 An evolving environment making this issue particularly pressing 58 1.3 Economic benefits and costs of collective redress: lessons to be drawn from the US 59 1.3.1 Economic Benefits 59 1.3.2 Criticisms Based on Compensation and Deterrence 60 1.3.3 Administrative Costs 61 1.3.4 Other Social Costs 62 2. TOWARDS A EUROPEAN INSTRUMENT? 63 KEY FINDINGS 63 2.1. The need for a European instrument 65 2.1.1 Legal context 66 2.1.2 Justifications and rationale 67 2.2. The type of action 69 2.2.1 The notion 69 2.2.2 The possible outcomes: injunctive and/or compensatory redress 71 2.2.3 Cy-près remedies and the fate of left-overs 73 4 Collective redress in the Member States of the European Union __________________________________________________________________________________________ 2.2.4 Punitive damages 74 2.3. The scope 75 2.3.1. Material scope 75 2.3.2. Personal scope 77 2.3.3. The technique of the European instrument 79 2.4. The legal standing: Pre-existing Qualified entities and Ad hoc Qualified entities 80 2.4.1. The relevance of the subject-matter 82 2.4.2. Pecuniary criteria 82 2.5. Content and nature: the procedural regime 84 2.5.1. Admissibility 84 2.5.2. Due expediency of procedures and effective enforcement of injunctions 84 2.5.3. Opt-in and/or opt-out 85 2.5.4. Publicity 87 2.5.5. Registry of collective actions 87 2.5.6. Evidence 88 2.5.7. Effects of final decisions: res judicata 89 2.5.8. Limitation periods 90 2.6. Funding 90 2.6.1. Third party funding 90 2.6.2. Lawyers’ remuneration 91 2.7. Alternative Dispute Resolution 91 3. ARTICULATION BETWEEN PRIVATE INTERNATIONAL LAW AND A EUROPEAN INSTRUMENT ON COLLECTIVE REDRESS 93 KEY FINDINGS 93 3.1. Assessment of the current state of play 95 3.1.1. Distinction between European and international cross-border cases 95 3.1.2. Jurisdiction under the Brussels I (Recast) Regulation 97 3.1.3. Applicable law under the Rome I and Rome II Regulations 101 3.1.4. Recognition and enforcement of foreign judgments and settlements under the Brussels I (Recast) Regulation 103 3.2 Specific private international law rules within the European instrument on collective redress to address cross-border cases 106 3.2.1 The aim of the suggestion: authorize the collective action where plaintiffs reside in different States 108 3.2.2. Determination of the forum 109 3.2.3. Avoiding abuses 110 3.2.4. The recognition and enforcement of judgments 112 3.2.5. Alternative dispute resolution from a private international law perspective 113 4. CONCLUSION OF THE STUDY 114 ANNEX I : QUESTONNAIRE AND NATIONAL REPORTS 115 Austria 119 Belgium 133 5 Policy Department for Citizens' Rights and Constitutional Affairs _________________________________________________________________________________________ Estonia 140 France 151 Germany 168 Italy 180 Luxembourg 196 Poland 205 Romania 221 Spain 237 The Netherlands 248 The United-Kingdom 253 ANNEX II: BIBLIOGRAPHY 269 Books/ Articles 269 Cases 270 Legislation, Resolutions, Conventions and Legislative proposals 272 Non-binding instruments: Reports, Declarations and Recommendation 276 6 Collective redress in the Member States of the European Union __________________________________________________________________________________________ LIST OF ABBREVIATIONS CJEU Court of Justice of the European Union CAT Competition Appeal Tribunal GLOs Group Litigation Orders DGCCRF General Directorate for Competition, Consumer Affairs and Prevention of Fraud ADR Alternative Dispute Resolution GDPR Alternative Dispute Resolution SAs Alternative Dispute Resolution LSA Alternative Dispute Resolution CDE Alternative Dispute Resolution CCP Alternative Dispute Resolution CACP Code of Administrative Court Procedure CPA Consumer Protection Act CMTCA Capital Market Test Case Act 7 Policy Department for Citizens' Rights and Constitutional Affairs _________________________________________________________________________________________ EXECUTIVE SUMMARY Background In his 2017 State