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SPRINGERBRIEFSINLAWCsongorIstvánNagyCollectiveActionsinEuropeAComparative,EconomicandTranssystemicAnalysisSpringerBriefsinLawSpringerBriefspresentconcisesummariesofcutting-edgeresearchandpracticalapplicationsacrossawidespectrumofelds.
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springer.
com/series/10164CsongorIstvánNagyCollectiveActionsinEuropeAComparative,EconomicandTranssystemicAnalysisCsongorIstvánNagyUniversityofSzeged,DepartmentofPrivateInternationalLawHungarianAcademyofSciencesFederalMarkets"Momentum"ResearchGroupSzeged,HungaryISSN2192-855XISSN2192-8568(electronic)SpringerBriefsinLawISBN978-3-030-24221-3ISBN978-3-030-24222-0(eBook)https://doi.
org/10.
1007/978-3-030-24222-0TheEditor(s)(ifapplicable)andTheAuthor(s)2019.
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ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSwitzerlandAGTheregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,SwitzerlandPrefaceInthelastthreedecades,Europehasseenaremarkableproliferationofcollectiveactionlegislation,makingclassactionsoneofthemostsuccessfulexportproductoftheAmericanlegalscholarship.
Whileitsspreadhasbeensurroundedbydistrustandsuspiciousness,todaymorethanhalfoftheEUMemberStateshaveintroducedcollectiveactionsfordamagesand,fromthosewhodid,morethanhalfchose,tosomeextent,theopt-outsystem.
ThisbookgivesananalyticalpresentationofhowEuropemadeclassactionsinitsownimage.
ItdemonstrateswhycollectiveactionshavebeenfeltneededfromtheperspectiveofaccesstojusticeandeffectivenessoflawandpresentstheEuropeandebateandthedeeplayersoftheEuropeanreactionandresistance.
ItunfoldshowtheCopernicanturnofclassactionsquestionsthefundamentalsoftheEuropeanthinkingaboutmarketandpublicinterest.
Itana-lyzes,throughatranssystemicpresentationoftheEuropeannationalmodels,thewaycollectiveactionswereaccommodatedwiththeEuropeanregulatoryenvi-ronment,thenovelandpeculiarregulatoryquestionstheyhadtoaddressandhowandwhytheyworkdifferentlyonthissideoftheAtlantic.
TheauthorisindebtedtoProf.
LauraCarballo,Prof.
CarolineCauffman,Prof.
LauraErvo,Dr.
AndreFiebig,Dr.
PavleFlere,Dr.
MaciejGac,Prof.
CliffordA.
Jones,Prof.
ChristianKersting,Prof.
JurgitaMalinauskaite,Prof.
FranciscoMarcos,Prof.
ManosMastromanolis,Prof.
AlexandraMikroulea,Dr.
AntonPetrov,Prof.
BarryJ.
Rodger,Dr.
ThibaultSchrepel,Prof.
CaterinaSganga,Prof.
MiguelSousaFerro,Prof.
AstridStadlerandDr.
MagdalenaTulibackafortheircomments.
Ofcourse,allviewsandanyerrorsremaintheauthor'sown.
ThisvolumewaspublishedaspartoftheresearchprojectoftheHAS-SzegedFederalMarkets'Momentum'ResearchGroup.
Itdrawsontheauthor'sfollowingpublications:NagyCI(2013)Comparativecollectiveredressfromalawandeco-nomicsperspective:withoutriskthereisnoreward!
ColumbiaJEurLaw19(3):469–498;NagyCI(2015)TheEuropeancollectiveredressdebateaftertheEuropeanCommission'sRecommendation:onestepforward,twostepsbackMaastrichtJEurComparLaw22(4):530–552.
Themanuscriptwasclosedonv1April2019.
Hence,itdoesnotincorporatetheItalianlegislationadoptedon12April2019(Legge,12/04/2019n°31.
Disposizioniinmateriadiazionediclasse(19G00038),GUSerieGeneralen.
92del18-04-2019).
Szeged,HungaryCsongorIstvánNagyviPrefaceContents1Introduction1References72WhyAreCollectiveActionsNeededinEurope:SmallClaimsAreNotReasonablyEnforcedinPracticeandCollectiveActionsEnsureEffectiveAccesstoJustice92.
1WhatAretheHurdlesFacedbySmallClaimsinEurope112.
2HowDoCollectiveActionsOvercometheAboveHurdlesandWhyAreTheyEfcient142.
3WhyAreCollectiveActionsNotWorkingSpontaneouslyifTheyAreEfcient162.
4HowCouldCollectiveActionsBeMadeWork172.
5Summary20References203MajorEuropeanObjectionsandFearsAgainsttheOpt-OutSystem:Superego,EgoandId233.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts233.
1.
1ConstitutionalConcerns:PrivateAutonomyandTacitAdherence243.
1.
2Opt-OutCollectiveActionsAreAlientoContinentalLegalTraditions303.
1.
3ItIsVeryDifculttoIdentifytheMembersoftheGroupandtoProveGroupMembership333.
1.
4Opt-OutCollectiveActionsWouldLeadtoaLitigationBoomandWouldCreateaBlack-MailingPotentialforGroupRepresentatives35vii3.
2TheHeadspringofEuropeanTaboosandTraditionalism:PartyAutonomyandtheState'sPrerogativetoEnforcethePublicInterest383.
3Summary40References424TransatlanticPerspectives:ComparativeLawFraming454.
1DisparateRegulatoryEnvironments454.
2WhyShouldEuropeansNotFeartheAmericanCowboyDivergingEffectsofDisparateRegulatoryEnvironments524.
3TheNovelQuestionsofCollectiveActionsinEurope594.
3.
1FundingintheAbsenceofOne-WayCost-Shifting,ContingencyFeesandPunitiveDamages594.
3.
2Two-WayCost-Shifting624.
3.
3DistrustofMarket-BasedMechanismsintheEnforcementofPublicPolicy(NoPrivateAttorneyGeneral)624.
3.
4EuropeanOpt-InCollectiveActionsandJoindersofParties.
634.
3.
5Opt-OutSystemsandthe"OnlyBenets"Principle644.
4Summary66References675EuropeanModelsofCollectiveActions715.
1TheEuropeanLandscape:ToOptinortoOptOut735.
2Purview:Step-by-StepEvolutionofaPrecautiousRevolution.
.
.
.
855.
3Pre-requisitesofCollectiveActionandCertication885.
4StandingandAdequateRepresentation955.
5StatusofGroupMembersinOpt-inProceedings:LiabilityforLegalCostsandResJudicataEffect985.
6StatusofGroupMembersinOpt-OutProceedings:LiabilityforLegalCosts,ResJudicataEffectandthe"OnlyBenets"Principle1015.
7Enforcement1055.
8Summary106References1086Conclusions1136.
1CollectiveActionsAreNeededinEuropetoEnsureAccesstoJusticeandEffectivenessoftheLaw1146.
2EuropeanObjectionsandFearsAgainsttheOpt-OutSystem:Superego,EgoandId1166.
3TransatlanticPerspectives:ComparativeLawFraming117viiiContents6.
4EuropeanModelsofCollectiveActions:ATranssystemicOverview1196.
5ClosingThoughts:"SmallMoney,SmallFootball,BigMoney,BigFootball"121References122ContentsixChapter1IntroductionClassactionshaveprobablybeenthemostsuccessfulexportproductoftheAmeri-canlegalscholarship.
1WhiletheUSlegalsystemdoeshavequiteafewpeculiarities(suchasdeterrentpunitiveandtrebledamages,extensivepre-trialdiscovery,consti-tutionallyentrenchedjurytrials),classactionsstandoutfromtheseintermsofbothintellectualimpactandcontroversialreception.
Theyfullledadeterminativerole,eitherasasourceofinspirationorasapointofreference,intheappearanceandevolutionofEUcollectiveactions.
WhileafewdecadesagocollectiveactionswereveryrareoutsidetheUSandwereconsideredesoteric,nowadays,theyarepartofthelegalsystemsofAustraliaandseveralcountriesintheAmericas(Canada2andLatinAmerica3)andinEurope,and,eveniftheyhappenedtorejectthem,allthesesystemsconsideredtheUSclassaction4astheCaballineFountainandpointofreference.
Interestingly,whilethespreadofcollectiveactionshasbeenremarkable,ithasgeneratedthesameamountofcriticismandfearinEurope5:albeitthattheclassactioniscertainlynottheonlylegaltransplantwhosereceptiondividesalegalcommunity,it1SeeHensler(2017:965–966).
2SeveralprovincesofCanadaintroducedcollectivelitigation,suchasBritishColumbia,ClassProceedingAct1995,S.
B.
C.
ch21(1995),Ontario,ClassProceedingAct1992,S.
O.
ch6(1992),Quebec,QuebecCivilCode,BookIX.
,Newfoundland&Labrador,ClassActionsAct,S.
N.
L.
,ch.
C-18.
1(2001)(Newfoundland&Labrador),Saskatchewan,TheClassActionsAct,S.
S.
,ch.
C-12.
01(2001)(Saskatchewan).
TheclassactionisalsopartoftheFederalCourtRules,FederalCourtRules,Part4,299.
1–42.
3SeeGidi(2003:311,2012:901).
4ForacomprehensiveoverviewoftheUSclassaction,seeAndersonandTrask(2010).
5Cf.
Buxbaum(2014:585,586)("Inpreviousdecades,theprimaryashpointforfrictionincross-bordercivillitigationwasthediscoveryprocess(…).
Today,theashpointforsuchdebatesseemstobetheclassaction.
").
TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_1121Introductionprovedtobeoneofthemostcontroversial.
ItisnotanexaggerationtosaythattheUSclassaction(asreshapedin1966)6wasa"Copernicanturn"incivilprocedure:whilenormallytheprocedureisorganizedaroundtheclaim,inclassactionsclaimsareorganizedaroundtheprocedure.
Duetothisparadigm-shift,classactionsinterferewithoneofthetaboosofcivil-law—representationwithoutauthorization(opt-outrule)7—andoneofthecentralprinciplesofsocietalorganization:publicpolicyshouldbedoneexclusivelybythestateanditsenforcementcannotbeprivatized(no"privateattorneygeneral").
8Notsurprisingly,inEurope,fewlegalreformshavebeensubjecttosomuchhesitation,scare-mongeringandphobiaofnovellegalsolutionsastheintroductionofcollectiveactions.
9TheentryintoforceoftheItalianlawof2007oncollectiveproceedingswas,duetoprofessionalprotest,suspendedfortwoyearsand,attheendoftheday,anewactwasadoptedin2009.
10InHungary,thePresidentoftheRepublicvetoedanactoncollectiveactionsadoptedbytheHungarianparliamentin2010(theactfollowedtheopt-outprinciple).
11InJuly2009,theconversionoftheopt-inschemeintoanopt-outsystemwasrefusedinEnglandandWales,12whilerecentlytheopt-outschemewasmadeavailableincompetitionmatters,subjecttotheCompetitionAppealTribunal'sdiscretion.
136Itwasthe1966amendmentthateffectivelyintroducedopt-outclassactions.
SeeYeazell(1987:229–232).
Beforehand,althoughopt-inclassactionshadbeenavailablesince1938,classactionshadnotbeenamajorforce.
Onlythemovetotheopt-outschemeenabledclassactionstobecomeeffectiveandcommon.
Sherman(2003:130,132–133).
7Inthetraditionalistopt-insystemonlythosegroupmembersareinvolvedinthecollectivelitigationwhoexpresslyassenttoit,contrarytothe"noticeandopt-out"system,wheresilenceimpliesassentandthosegroupmemberswhodonotwanttogetinvolvedhavetooptout.
8SeeHodges(2011),Blennerhassett(2016:28).
9Taruffo(2001:414)("[T]heEuropeanrejectionofclassactions—essentiallybaseduponigno-rance—hasusuallybeenjustiedbythenecessityofpreventingsuchamonsterfrompenetratingthequietEuropeanlegalgardens.
").
ForanoverviewofthecentralissuesofcollectiveactionsintheEU,seeUdvary(2013).
10Act244of24December2007(Legge24Dicembre2007,n.
244),Act99of23July2009(Legge23Luglio2009,n.
99).
SeeSiragusaandGuerri(2008:32),Nashi(2010:147).
11SeeProposalNoT/11332ontheAmendmentofActIIIof1952ontheCivilProcedure("T/11332.
számútrvényjavaslatapolgáriperrendtartásrólszóló1952.
éviIII.
trvénymódosításáról").
Asnotedabove,theproposalwasvetoedbythePresidentoftheRepublicofHungary.
12TheGovernment'sResponsetotheCivilJusticeCouncil'sReport,ImprovingAccesstoJusticethroughCollectiveActions(2009).
SeeHodges(2010:376–379),Hodges(2009:50–66).
13Sections47A-49EofCompetitionAct1998,insertedbyPart1ofSchedule8oftheConsumerRightsAct2015.
1Introduction3TheEU"federal"regulationofcollectiveactionshasalsofeaturedasimilaroscil-lation.
14InOctober2009,theEuropeanCommissionwithdrewitsproposalforanopt-outsystem15and,afterapublicconsultationcarriedoutoneandahalfyearslaterandtheEuropeanParliament'srejectionoftheopt-outprinciple,16itnallyadoptedanon-bindingrecommendationin2013championingtheopt-insystemandreject-ingthemostimportantelementsoftheUSclassaction.
17Nonetheless,recently,aratherpromisingdevelopmentappearedonthehorizonofEUcollectiveactions.
InApril2018,theCommissionproposedtheadoptionofacollectiveactionscheme(termed"representativeaction")intheeldofconsumerprotectionlaw.
18Althoughtheproposeddirectiveevadesthedilemmaofopt-inandopt-outthroughleavingthechoicetoMemberStates,19itwillhaveanunquestionablevirtue:ifenacted,itwillmakeconsumercollectiveactionsuniformlyavailableinalltheMemberStates.
Bothtraditionalistconservatismandfuriouseconomiclobbyingareclaimedtohaveaccountedfortheforegoingdevelopments.
Thecoalitionofthesetwoelementsoftenprovedtobeunsurmountable.
Ithasnotbeenexceptionaltoseeprogressiveproposalselaboratedinthescholarlylaboratoriestorpedoedbyintensiveeconomiclobbying20andfailtogetthroughthepoliticallter.
Insomecasestheywerefullyrejected(forexample,inEnglandandWalesin2009,21though,asnotedabove,recentlytheopt-outschemewasmadeavailableincompetitionlaw,subjecttotheCompetitionAppealTribunal'sdiscretion).
22Inothercases,theinitiallyprogressiveandeffectiveproposalwasemasculated,andtheversionthatwasnallyadoptedwas14ForanoverviewofEUlaw'sapproachastoenforcementinthevarioussectors,seeFaureandWeber(2017).
15ThetextisavailableinLoweandMarquis(2014:511–536).
SeeIoannidou(2011:78–80).
16EuropeanParliamentresolutionof2February2012on"TowardsaCoherentEuropeanApproachtoCollectiveRedress",(2011/2089(INI)).
17CommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompen-satorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionLaw.
OJL201/60.
ForageneralcriticismoftheRecommendation,seeRathodandVaheesan(2016:346–352).
18ProposalforaDirectiveonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC,COM(2018)184nal.
SeeEuropeanParliamentlegislativeresolutionof26March2019ontheproposalforadirectiveoftheEuropeanParliamentandoftheCouncilonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC(COM(2018)0184—C8-0149/2018—2018/0089(COD)).
19Article6.
20"Thereisastrong,well-organized,well-fundedandinuentialoppositiontotheproposalonclassactions".
Lindblom(1996:85),quotedinVlimki(2007).
SeeVlimki(2007),Lindblom(2007:9,31),Lindblom(2008:14).
21TheGovernment'sResponsetotheCivilJusticeCouncil'sReport,ImprovingAccesstoJusticethroughCollectiveActions(2009).
22TheCompetitionAppealTribunalspeciesinthecollectiveproceedingsorderwhetherthepro-cedurehastobecarriedoutintheopt-inortheopt-outsystem.
Sections47A-49EofCompetitionAct1998,insertedbyPart1ofSchedule8oftheConsumerRightsAct2015.
41Introductiondeprivedofallthevirtuesthatcouldmakethesystemworkableandwidespread(seeFinland23andFrance).
24ThisvolumegivesatranssystemicanalysisofEuropeancollectiveactionsandanoverviewofhowEuropemadeclassactionsinitsownimage.
Itaddressescollectiveactions'reception,developmentandcorefeaturesandgivesacriticalanalysisoftheEuropeanapproach.
Thisisdonethroughanalysingthepivotalregulatoryquestionsfromaneconomicandcomparativeperspective.
Quantitativeeconomicanalysisisusedtodescribethedecision-makingprocessoftheprivateactorsoflitigation(plain-tiffs,grouprepresentativesanddefendants):theactorsaredealingwithaproductionprocess,whoseoutputislitigation,measuredbypossiblyrecoveredlosses.
Thebook'sstructureisbasedonthefollowingpillars.
First,thebookgivesalawandeconomicsanalysisofsmallclaims,demonstrat-ingtheneedfortheintroductionofcollectiveactionstosecureaccesstojusticeandshowcasingthebenetsoftheopt-outscheme.
Itdemonstratesthatthecentralfunc-tionofcollectiveactionsistotackletheproblemoforganizationalcosts,throughmitigatingandhandlingtherisksattachedtothem,thusmakinglitigationapossibil-ityincasesthatotherwisewouldnotgettocourt.
Itarguesthattheopt-outsystemtacklestheproblemoforganizationalcostsinthemostefcientmanner.
Althoughthegroup'sorganizationalcostscanbereducedthroughdifferenttechniques(forinstance,througheasingadhesion)and,hence,anopt-insystemmayalsobecapableofreducingorganizationalcoststhroughsimplifyingtheorganizationofthegroup,themostcost-effectivemethodistheopt-outsystem,whichiscapableofreducingthecoststotheminimum(albeitcertainlynottozero).
Second,thebookaddressesandrefutesthemajorargumentsandfearsagainsttheopt-outsystem(constitutionalinconformity,Europeantraditionalism,exagger-atedpracticaldifcultiesandthefearofalitigationboomandlegalblackmailingpotential),inquiringwhetherthesearegenuinescruplesorpretextsveilingadeeperaversionagainstclassactions.
Thischapterexaminestheproblemof"representationwithoutauthorization"anddemonstratesthatthisisnotincompatibleeitherwithnationalconstitutionalrequirementsorwithEuropeanlegaltraditions.
Itshowsthatacollectiveactionsystembasedontheopt-outprincipleisfeasibleandwouldcausenolitigationboomandwouldcreatenoblackmailingpotential.
ItarguesthattheheadspringofEurope'sinstinctiveresistanceagainstAmericanclassactionsandthesubconsciousreasonwhyitissodifculttoreconcilethe"Copernicanturn"ofclassactionswithEuropeantraditionalismarethetabooofpartyautonomyandthestate'sentrenchedprerogativetoenforcethepublicinterest.
Third,thebookgivesanaccountofthedifferencesbetweentheUSandEuro-peanframeworkanddemonstrateshowthedisparateregulatoryenvironmentsentaildivergingeffectsandwhyandhowtheEuropeanlegalandsocialenvironmentraises23Vlimki(2007:3).
24TheintroductionofcollectiveactionsintoFrenchlawhadbeenexaminedbytwoprofessionalcommitteesintheeralongbeforetheadoptionofthenewprovisionsoftheFrenchConsumerCode(Codedelaconsummation)in2014.
Bothcommitteesproposedtheintroductionofaquasi-opt-outscheme.
However,thelegislatordidnotfollowanyofthem.
Magnier(2007:4).
1Introduction5regulatoryissuesthatdonotemergeontheothersideoftheAtlantic.
ThecollectiveactionisagenuinelegaltransplantinEuropewhosecomparativeanalysishastoextendtoalargearrayofframinglegalinstitutions(e.
g.
contingencyfees,Americanruleofattorney'sfees,punitiveandtrebledamages),whichneedtobeaddressedtodelimitclassactionsfromtheoperationofunrelatedlegaldoctrines.
Furthermore,asaconceptionfullyalientotraditionalcivil-lawthinking,inEuropecollectiveactionsraisevariousquestionsthatdonotemergeontheothersideoftheAtlantic.
ThischaptergivesanoutlineofthelegalandculturalcontextofEuropeancollec-tiveactionmechanismsandexplainsinwhatthiscontextdiffersfromtheenviron-mentofUSclassactions.
Itdemonstrates,throughalawandeconomicscomparisonbetweenUSandEuropeancollectiveactions,thatthecriticismagainsttheUSopt-outclassactionisnotvalidifitisappliedinEurope.
ThevolumedemonstratesthattheovergrowthsoftheUSclassactionarenotentailedbytheclassactionitselfbutratherbytheculturalandregulatoryenvironmentitoperatesin;itisthecontextualconceptsandrulesofUSlawthatcatalysetheoperationofclassactions("Americanrule"ofattorney'sfees,punitivedamagesetc.
).
Itisargued,onthebasisoftheoreticalandempiricalconsiderations,thattheovergrowthsoftheUSclassactiondonotcomeupifthisregulatorypatternisappliedinEurope.
Itisalsoarguedthattheeffectivenessandwidespreaduseofcollectivelitigationandthepotentialforabuseandadverseeffectsareinverselyproportionaltoeachother.
Ontheonehand,economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremium.
Ontheotherhand,suchariskpremiumwouldmovetheEuropeanregulatoryenvironmentfromitscurrentpositiontowardsUSlaw.
TheEuropeanlegislatororlegislatorsneedtondthepointofequilibriumwherethemarginalbenetofeffectivelitigationequalsthemarginalcostofabuseandadverseeffects.
Alternatively,theymayrefusetoprovideariskpremiumtothegrouprepresentative;empiricalevidenceshowsthat,mainlyduetonon-economicconsiderations,collec-tivelitigationmayalsobeworkableintheabsenceofarisk-premium,albeitonalow-keylevel.
Fourth,thevolumegivesatranssystemicpresentationoftheEuropeannationalschemesalongthekeyissuesofcollectiveactions:purview(sectoralorgeneral),standing,opt-inandopt-outprinciple,pre-requisitesofcollectiveaction,statusofgroupmembers(whethertheyareconsideredpartiesornon-partiesaffectedbythelitigation),legalcosts(costshiftingandmembers'liability)andfunding,resjudi-cataeffectsandenforcement.
CollectiveactionlegislationisrelativelywidespreadinEuropeandplentifulMemberStates,aswellastheEuropeanCommissionhaveintroducedgroupproceedings.
ThischapterdemonstrateshowEurope'slegaltradi-tionshapedthereceptionofcollectiveactions,showinghowEuropeanlegalsystemsstruggledwithaccommodatingtheideaofclassactionwithEuropeanlegalthinking.
ItalsodemonstratesthecreativeeffortscertainEuropeancountriesmadetorecon-cilerepresentationwithoutauthorization(theopt-outrule)withthetabooofpartyautonomyandthenotionthattheenforcementofpublicpolicycannotbeprivatized.
61IntroductionFifth,intheconclusions,thevolumegivesananalyticalsummaryandcriticalevaluationoftheemergingEuropeancollectiveactionmodelandsubmitsproposalsfortheadvancementofaccesstojusticeandeffectivenessoflawthroughcollectiveredress.
Thisvolumeexaminesthecollectiveenforcementofclaimsformonetaryrecov-ery;Europeanmechanismsfornon-monetaryremedies(suchasdeclaratoryjudg-ments,injunctions)falloutofthisvolume'sfocus.
Accordingly,itdealsonlywithprocedureswhereplaintiffsenforcepecuniaryclaims.
Procedureswherearepresenta-tiveplaintiffmayseekmerelyadeclaratoryjudgmentoraninjunctionwithouthavingthepossibilitytoclaimmonetaryredress—apatternthathasbeenavailableinEuropelongsince—arenotcovered.
25Inthesamevein,proceduralmechanismswhereindi-vidualactionsarecoordinatedaftertheyhavebeenlaunched,aswellascollectivesettlementmechanisms,donotcomeunderthefocusoftheanalysis,because,asexplainedbelow,theydonotadvancethecollectiveenforcementofclaims.
Notably,intherstcase(see,forinstance,theGermanCapitalMarketsModelCaseAct)claimsarebroughtindividuallyandthencoordinated,implyingthatthemechanismdoesnotfacilitateaccesstojusticethroughacollectivevehiclebutcoordinatesclaimsthatweresusceptibleofbeingbroughtonanindividualbasis;inthesecondcase,themechanismcannotbeusedtoenforcetheclaimbuttohandlemasscaseswherethedefendantiswillingtoconcedeliability.
Similarly,forreasonsexplainedbelow,theuseoftraditionaljoinderofpartiesforhandlingcollectivematters,thoughaddressed,doesnotcomeunderthefocusofthisbook.
Inthisvolume,theterm"opt-outsystem"meansthatgrouprepresentativesmayinstituteacollectiveactionwithoutanyexplicitauthorizationfromthemembersofthegroup,who,inturn,may(ormaynot)leavethegroupthroughanexpressdeclaration(opt-out).
Thosewhoaregivennoticebutdonotoptoutexpresslyareconsideredtobeassentingtotheprocedure.
Theterm"USclassaction"willbeusedastheroughequivalentoftheopt-outsystem.
Theterm"opt-insystem"meansthatgrouprepresentativesmayactonlyonbehalfofthosegroupmemberswhoexplicitlyauthorizedthemtodoso,i.
e.
whooptedin.
Inthisvolume,"collectiveaction"willbeusedasageneraltermreferringtogrouplitigationmechanismsatlarge,whilethetermclassactionwillrefertotheUSsystem.
Forthesakeofsimplicity,theeconomiccalculationsarebasedontheassumptionthatthedecision-makerisrisk-neutralandusetheconceptofexpectedvalueinsteadofexpectedutility.
Furthermore,forthesakeofsimplicity,calculationsoccasionallyassumethatinEuropelegalcostscanbeshiftedinfulltothelosingparty,disregardinglegalandpracticalhurdles;likewise,theywillproceedfromthepropositionthattheplaintiffalmostneverhasa100%chancetowinacase.
25Seee.
g.
Directive2009/22/EConinjunctionsfortheprotectionofconsumers'interests,[2009]OJL110/30.
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0InternationalLicense(http://creativecommons.
org/licenses/by/4.
0/),whichpermitsuse,sharing,adaptation,distributionandreproductioninanymediumorformat,aslongasyougiveappropriatecredittotheoriginalauthor(s)andthesource,providealinktotheCreativeCommonslicenseandindicateifchangesweremade.
Theimagesorotherthirdpartymaterialinthischapterareincludedinthechapter'sCreativeCommonslicense,unlessindicatedotherwiseinacreditlinetothematerial.
Ifmaterialisnotincludedinthechapter'sCreativeCommonslicenseandyourintendeduseisnotpermittedbystatutoryregulationorexceedsthepermitteduse,youwillneedtoobtainpermissiondirectlyfromthecopyrightholder.
Chapter2WhyAreCollectiveActionsNeededinEurope:SmallClaimsAreNotReasonablyEnforcedinPracticeandCollectiveActionsEnsureEffectiveAccesstoJusticeItisprobablyveryeasytoagreewiththetenetthat"[r]ightswhichcannotbeenforcedinpracticeareworthless.
"1Smallclaimsfacehurdlesthatmaypreventindividualenforcementandleadtosub-optimallitigation.
2Whilethepracticalnon-enforceabiltyofsmallvalueclaimsisoftenconceivedasaquestionofeffectiveness,3italsohasserioushumanrightsandruleoflawimplications.
4Article47oftheEUCharterofFundamentalRights,withreferencetolegalaid,treatsaccesstojusticeaspartoftherighttoaneffectiveremedyandtoafairtrial.
5Accesstojusticeisalsopartoftherequirementofruleoflaw,oneofthecorevaluesoftheEUenshrinedinArticle2TEU.
6Furthermore,MemberStates,duetotheprincipleofloyalty,areobligedtoensuretheeffectiveenforcementofEUlaw.
AccordingtoArticle4(4)TEU,"MemberStatesshalltakeanyappropriatemeasure,generalorparticular,toensurefullmentoftheobligationsarisingoutoftheTreatiesorresultingfromtheactsoftheinsti-tutionsoftheUnion.
"AccordingtotheCJEU'sjudicialpractice,MemberStates'enforcementofEUlawissubjecttotwogeneralrequirements:theprincipleofequiv-alenceandtheprincipleofeffectiveness.
NationalrulesgoverningtheenforcementofEUlawmaynotbelessfavorablethanthosegoverningsimilardomesticactions1EuropeanCommissionStaffWorkingDocumentPublicConsultation:TowardsacoherentEuro-peanapproachtocollectiveredress,SEC(2011)173nal,para1.
1.
2Foradetailedelaborationoftheanalysissetforthinthissection,seeNagy(2013:469–498).
3SeeNeumannandMagnusson(2011:154–155),Juska(2014),Bosters(2017:17).
4Foranoverviewoftheintersectionbetweencollectiveactionsandhumanrights,inparticularaccesstojustice,seeHodges(2008:187–192),Lange(2011:95–106),NeumannandMagnusson(2011:151–152),Wrbkaetal.
(2012),Azar-Baud(2012:15,17–18),Vanikiotisa(2014:1643–1644),Mulheron(2014:52–57).
5"Legalaidshallbemadeavailabletothosewholacksufcientresourcesinsofarassuchaidisnecessarytoensureeffectiveaccesstojustice.
"6EuropeanUnionAgencyforFundamentalRightsandCouncilofEurope(2016:16).
TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_29102WhyAreCollectiveActionsNeededinEurope…(principleofequivalence)andtheymaynotmaketheenforcementofEUlawprac-ticallyimpossibleorexcessivelydifcult.
7Notsurprisingly,theCommission'sRecommendationonCollectiveRedressdenescollectiveactionsasameansto"facilitateaccesstojusticeinrelationtoviolationsofrightsunderUnionlaw"andtoreinforcetheeffectivenessofEUlaw.
8ThepurposeofthisRecommendationistofacilitateaccesstojustice,stopillegalpracticesandenableinjuredpartiestoobtaincompensationinmassharmsituationscausedbyviolationsofrightsgrantedunderUnionlaw,whileensuringappropriateproceduralsafeguardstoavoidabusivelitigation.
9TheRecommendationisbasedonthepremisethatcollectiveactionsenhanceboththeeffectivenessofthelaw(throughstoppinganddeterringunlawfulpractices)andthechancetoobtainareallegalremedy(compensation).
Thesemeasuresareintendedtopreventandstopunlawfulpracticesaswellastoensurethatcompensationcanbeobtainedforthedetrimentcausedinmassharmsituations.
Thepossibilityofjoiningclaimsandpursuingthemcollectivelymayconstituteabettermeansofaccesstojustice,inparticularwhenthecostofindividualactionswoulddetertheharmedindividualsfromgoingtocourt.
10Thischapterdemonstrateshowandwhycollectiveactionsmaketheenforcementofsmallvalueclaimsareality,thusensuringaccesstojusticeandeffectivenessofthelaw.
Itaddressesthreequestions:whyisthepracticalenforcementofsmallvalueclaimsdifcultorevenunfeasible,howdoclassactionsmakeitworkandwhycanclassactionsnotbecomearealitywithoutlegislativeinterventionIncaseofsmall-valueclaimsitmaybeeconomicallyunreasonabletolitigate(theexpectedcostsmaybehigherthantheexpectedvalue)eveninwell-foundedcasesofmerit.
First,non-recoverablelegalcostsmaydeterlitigation.
AlthoughinEuropelegalcostsare,inprincipleandwithsomerestrictions,bornebythelosingparty,thewinningpartycannotshiftthelegalcostsinfull.
Second,thecostsofthepreliminarylegalassessmentmayalsodissuadetheplaintiff.
Third,inthecontextofsmallclaims,thevalueatstakeissmallandlegalcostsare,incomparisontotheclaim'svalue,veryhigh—here,arelativelytrivialprobabilityoffailuremaymakethebalanceoflitigationnegative.
Thehigherthelegalcostsareinrelationtotheclaim'svalue,thebetterthisriskcropsout.
Collectiveactionshavecertainadvantagesthatmaketheenforcementofsmallclaimspossibleincaseswherenumerouspersonsaredamagedbythesameillegalact.
Althoughdamagesaresmallforeachindividual(whichmaymakelitigationunreasonable),collectivedamages(thesumofvariousindividuals'damages)arehigh.
Themeritofcollectiveactionscanbeattributedtotwovirtues:economiesof7Seee.
g.
CaseC-261/95Palmisani[1997]ECRI-4025,para27;CaseC-453/99CourageandCrehan[2001]ECRI-6297,para29;JoinedCasesC-295/04toC-298/04Manfredi[2006]ECRI-06619,para62.
8Recitals(1)&(10).
9Para1.
10Recital(9).
2WhyAreCollectiveActionsNeededinEurope…11scale11andtacklingexternaleconomiceffects(externalities).
Theseareduetothefactthattheenforcementofindividualsmallclaimsmayhavesignicantcommoncosts12andindividuallitigationmayentailpositiveexternaleffects(externalities),conferringadvantagesonotherclassmemberstheydidnotpayfor.
Althoughgroupmemberscouldavailthemselvesofvarioustraditionallegaltools(joinderofparties,13assignmentofclaimstoanentityfoundedbygroupmembers)toorganizethegroup,14theseare,atleatincaseofsmallclaims,noteffectivesubstitutesofcollectiveactionsowingtothecostsofgrouporganization.
Thesecostsmaybeveryhigh,insomecasesevenprohibitive,15andtraditionallegaltoolsarenottailoredtotheneedsofcollectivelitigation,thusincreasingthecostsofgroupmanagement.
16Forthepurposeofthepresentvolume,smallclaimsaredenedascivilclaimswherethelitigation'sexpectedvalueislessthanitsexpectedcosts(out-of-pocketexpensesandrelatedinconvenience).
Atthispoint,forthesakeofsimplicity,itisdisregardedthatthesamevalue(pay-out)mayhavedifferentutilitiesforpeoplewithdifferentassetsandpersonalpreferences(expectedutility);likewise,itisassumedthatthedecision-makerisrisk-neutral.
Whencalculatingtheexpectedvalue,itistobetakenintoaccountthatlitigationisburdenedbydubietyandtheoutcome,intermsofpractice,cannotbepredictedwithfullcertainty.
Hence,arationaldecision-makermakeshischoicewhethertoenforcetheclaimornotonthebasisofthebalanceoflitigation'sexpectedvalue(whichstandsfortherevenueifcarryingthedaymultipliedbytheprobabilitythattheplaintiffwinsthelaw-suit)andexpectedcosts.
Iftheexpectedvalueexceedstheexpectedcosts,itisreasonabletosue.
2.
1WhatAretheHurdlesFacedbySmallClaimsinEuropeInEurope,thereareessentiallythreefactorsthatmaydiscouragepotentialplaintiffsfromenforcingtheirclaims:the"loserpays"principledoesnotworktothefull(therearesomelegallyunrecoverableexpensesandtherearesomeexpensesthatcannotbeproved),thecostsofthepreliminarylegalassessmentandtheriskoflosingthelaw-suit(legalandfactualuncertaintiesanddubietyrelatedtothelaw-suit'soutcome;i.
e.
theriskofbearingthelegalcosts).
11Seee.
g.
Ulen(2011:185,187).
12SeeBone(2003:261–265).
13Nagy(2011:163),Geiger(2015:32–73).
14SeeCommissionReportontheimplementationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p2("IntheMemberStateswhere(…)[collectiveredressmechanisms]donotformallyexistthereappearstobeanincreasingtendencyofclaimantsattemptingtoseekcol-lectiveredressthroughtheuseofdifferentlegalvehicleslikethejoinderofcasesortheassignmentofclaims.
").
15Ulen(2011:185,191).
16Foradetailedanalysis,seeNagy(2013:469,478–479).
122WhyAreCollectiveActionsNeededinEurope…First,legalcostsmaydeterlitigation.
AsinEuropelegalcostsare,inprincipleandwithsomerestrictions,bornebythelosingparty,theadvancingoflegalcostsshould,theoretically,notimpedetheenforcementofwell-foundedclaims,ifassum-ingthatthereis100%probabilitythattheplaintiffwinsthelaw-suit.
Nevertheless,inpractice,thisisseldomthecase.
Thewinningpartycannotshiftthelegalcostsinfullontothelosingparty:theproofanddocumentationofthelegalcostsmaybedifcult;furthermore,thelawmayrestricttheamountoftheattorney'sfeesthatcanbeshiftedonthelosingparty;nally,thepreliminarylegalassessment,examiningtheprobabilityofplaintiffsuccess,occursinastagewheretheplaintiffhaslittleinformationabouthischances.
Litigationgivesrisetosomepracticallyunrecoverableexpenses;thesearetobebornebytheplaintiffirrespectiveofwhetherhecarriesthedayornot(defactonon-shiftablecosts).
Therearecertaincoststhatmaybelegallyshiftedbutcan-notbeproved.
Sinceinthisregardtheburdenofproofrestsontheplaintiff,heinevitablyfacessomeriskofproofemergingfromfactualuncertainties.
Itisnotrealistictoassumethatthepartycanproveallhiscostsbeforethecourt,sincesmallerexpensesmaynotbecertiable.
Inthecontextofsmallclaimsevenrela-tivelynegligibleexpensesmaybesignicant.
Furthermore,therearecertaincoststhatlegallycannotbeshiftedontothelosingparty(dejurenon-shiftablecosts):e.
g.
inconveniencesrelatedtolitigation,thetimetheplaintiffspendsonthelaw-suit.
Onesubsetofthiscategoryiscappedcosts.
Forinstance,incertainEuropeancountriesthelawestablishesthemaximumamountofattorney'sfeesthatcanbeshiftedonthelosingparty,whilethemarketpriceofattorneyservicesmaybemuchhigher.
17Theusualperceptionisthatthepriceofattorneyservicesisunregulatedandthelegallydeterminedscheduleofattorney'sfeessetsoutlowerfeesthanthemarketprice.
Inthiscasethelaw,duetothescheduleofattorney'sfees,enablestheplaintifftoshifthisattorney'sfeesonlyinpart.
Inothercivil-lawsystems,thereisnopre-determinedscheduleofattorney'sfeesthatcanbeshiftedonthelosingpartybutthelawauthorizesthecourttocontrolthefeesanditmayreducetheamountthatcanbeshifted,iftheattorney'sfeesarenotproportionatetotheworkdoneorthevalueoftheclaim.
18Accordingly,theplaintifffacessomeuncertaintyastowhethertheattorney'sfeeswillbeshiftedattheendoftheday.
Second,theexpensesofthepreliminarylegalassessmentmayalsodiscouragetheplaintiff.
Theseconsistoftheinformationcostsoflearningwhethertheplaintiffhasa"goodcase"andhowhightheriskoflosingthelaw-suitis.
Here,thelegalcounselassessesthefactpatternandgivesadviceastowhethertosueandwhatthepotentialoutcomesofthelaw-suitare.
Althoughthesearecoststhatemergeinthelitigationprocessbroadlyspeakingand,assuch,thewinningpartymaybeabletoshiftthemontotheloser,itshouldnotbedisregardedthatthereisagooddealofinformationshortageinsuchscenarios.
Laymenthemselvesmaynotbeabletodothepreliminary17SeethecaseofGermany:Rechtsanwaltsvergütungsgesetzvom5.
Mai2004(BGBl.
IS.
718,788),zuletztgendertdurchArtikel3desGesetzesvom8.
Juli2006(BGBl.
IS.
1426).
OntheGermansystem,seeWagner(2009:367).
18SeethecaseofHungary:Regulation32/2003(VIII.
22.
)oftheMinisterofJustice.
2.
1WhatAretheHurdlesFacedbySmallClaimsinEurope13legalassessmentoftheirchancesinalaw-suitand,hence,whentheyareaskingforalegaladvicetheyhavetotakeintoaccountthattheymayhavetopaythecostsofthepreliminarylegalassessmenteveninacasewhenthereisnoreasontosue.
Thus,incaseofsmallclaims,theexpensesrelatedtothepreliminarylegalassessmentmayhaveadiscouragingeffectbecausethepartyhastoincurcostswithoutknowingtheprobabilityofwhethertheywillberecoveredornot.
Third,litigationinevitablyinvolvessomerisk.
Asamatterofpractice,almostalllaw-suitshaveimmanentrisks;aclaimmaybeagoodcasebutseldomaperfectone,letalonetherisksemergingfromenforcementissuesandthedefendant'spossibleinsolvency.
Accordingly,thepartyhastotakeintoaccountthatthereisacertainrisk(evenifanegligibleone)thathelosesthecaseand,hence,hislegalcostswouldnotberecoveredandhehastoreimbursetheopposingpartyforhisexpenses.
Asincaseofsmallclaimsthevalueatstakeissmall,arelativelytrivialprobabilityoffailuremaymakethebalanceoflitigationnegative.
Assumethattheplaintiffsufferede100lossduetoabank'soverchargeandthelegalcostswouldbee10,000altogether;itisalsoassumedthattheclaimisfullylegitimatebuttheplaintiffconsidersthatthereisa1%chancethathewouldlosethecase;nally,forthesakeofsimplicity,itisalsoassumedthatalllegalcostsarebornebythelosingparty(norestrictionsapply,neitherlegal,norfactual).
Inthiscase,theexpectedvalueofthelaw-suitise100*0.
99=e99,whiletheexpectedcostsaree10,000*0.
01=e100.
Asacorollary,thebalanceoflitigationisnegative(e99e100=e1)anditisnotreasonabletosue.
Accordingly,anegligibleamountofriskmayhindertheplaintifffromthelaw-suit,iflegalcostsarehighinrelationtotheclaim'svalue.
Thehigherthelegalcostsareinrelationtotheclaim'svalue,thebetterthisriskcropsout.
Itneedstobeaddedthat,asamatterofpractice,litigationusuallyinvolvessomerisk,evenifanegligibleone.
Furthermore,thereisalwaysariskthateventhoughthecourtdecidesfortheplaintiff,theenforcementofthejudgmentfailsforsomereason(e.
g.
thejudgmentdebtorbecomesbankrupt).
Theconsequenceoftheaboveisthatinmatterswherenumerousvictimssufferindividuallysmalldamagestheyarenotseekingrecoveryonanindividualbasisandtheonlylegaltoolthat,intermsofpractice,remainsattheirdisposalispublicenforcement,e.
g.
administrativelaw,criminallaw.
Nonetheless,publicenforcementnormallydoesnotimplyprivaterecovery19:norecoveryaccruestothevictimfromthecriminaloradministrativesanctionimposedonthepersoncommittingthemischief.
20Accordingly,theconclusionmaybedrawnthatincaseofsmallclaimsthebalanceoftheexpectedvalueandtheexpectedcostsmaybenegativealsoincasesthatshouldbeworthbeingbroughtbeforecourt,i.
e.
incasesthathavearobustchanceofsuccess.
19Foranexceptiontothisgeneraltenet,seeNagy(2012)(DemonstratinghowtheHungarianCompetitionOfceusescommitmentprocedurestofurtherremediesunderprivatelaw.
).
20ContraWagner(2011:79)(Arguingthatincaseofscatteredloss(smallclaims),thefunctionofcollectiveredressisdeterrence.
);seealsoGillesandFriedman(2006:105)(ArguingthatthepurposeofUSconsumerclassactionsisnottoensurecompensation;instead,itssolepurposeisdeterrence.
).
142WhyAreCollectiveActionsNeededinEurope…2.
2HowDoCollectiveActionsOvercometheAboveHurdlesandWhyAreTheyEfcientInthefollowing,itisdemonstratedthatcollectiveactionshavecertainmeritsthatenabletheenforcementofsmallclaimsinmatterswherenumerouspersonssufferlossduetothesamemischief(individuallossissmalland,hence,asamatterofpractice,hardlyenforceable,whilethesumoftheindividuallossesishigh).
Thetwomainreasonsofthisvirtueareeconomiesofscale21andtacklingtheproblemofexternaleconomiceffects(externalities).
Collectivelitigationmayleadtoeconomiesofscale.
Therearecommoncostsbetweentheclaimsandtheirjointenforcementmaygiverisetoeconomiesofscaleandhelpavoidingexternalitiesthatindividuallitigationmayentail22;ofcoursethesemeritsmaybepresentnotonlyinrespectofsmallclaims.
Inrelatedmatterssharingcommonfactualandlegalissues,litigationcostsareusuallynotdirectlyproportionatetothenumberoftheparties(plaintiffs).
Iftheclaimsaretriedinoneaction,witnesseshavetotestifyonlyonceand,similarly,liabilityistobedeliberatedonlyonce.
23Accordingly,iftheattorney'sworkloadis10hinrelationtooneclient,thismay,incaseof100clients,be100,200or300hbutnot1000h.
Asubstantialpartofthelegalcosts,includingattorney'sfees,maybexedcosts,i.
e.
theyemergeirrespectiveofthenumberoftheparties,whiletherestismadeupofvariablecosts,thevolumeofwhichdependsonthenumberoftheparties.
Therearecertainissueswhoseanalysisisindependentofthenumberoftheparties,whilesomeother(factualandlegal)issuesareindividualandcannotbeshared.
Theratiobetweenthexedandvariablecostsdependsonthecircumstances;nevertheless,itmaybereasonablyconcludedthatifthedetrimentsufferedbythevictimsisduetothesamecause,common(xed)costsarelikelytoexistandifthexedcostsaresubstantialinrelationtoindividualcosts,collectivelitigationmaybecost-effective.
Assumethatthereare10victims,eachofthemsuffereddamagesinvalueofe1000andthecostsofindividuallitigationaree750fortheplaintiffandthedefendant,respectively,e500ofwhichisxedcosts(atthispointcourtfees,inationandinterestonoverduepaymentsaredisregarded).
Furthermore,assumethattheplaintiffhas50%chancetowinthelaw-suitbecausethisisacaseofrstimpressionraisinglegalquestionsthathavenotbeentriedbefore.
Incaseofindividuallitigation,thebalanceoftheexpectedvalueandtheexpectedcostsisthefollowing:theexpectedvalueise500(e1000*0.
5),whiletheexpectedcostsaree750(sincethe"loserpays"principleapplies,thereis50%chancethattheplaintiffhastosustainthelegalcostsofbothparties:[2*e750]*0.
5),assumingthatlegalcostscanbeperfectlycalculatedandshifted.
Accordingly,thebalanceisnegative(e500e750=e250)anditisnotreasonabletosue.
21Seee.
g.
Ulen(2011:185,187).
22SeeBone(2003:261–265).
23Ulen(2011:187).
2.
2HowDoCollectiveActionsOvercometheAbove…15Nonetheless,thebalanceispositiveincaseofcollectivelitigation,providedcertaincostscanbeshared.
24Ifallthe10victimssuejointly,legalcostsdonotincreaseconsiderably.
Thecostsontheplaintiffs'sidearee500commonxedcostsande250individualvariablecostsmultipliedbythenumberofgroupmembers(e250*10=e2500);altogether,thisise3000.
Forthesakeofsimplicity,assumethatthelegalcostsonthedefendant'ssidedonotchange:e750.
Asacorollary,thetotalsumofthelegalcostsise3750andtheexpectedcostsaree3750*0.
5=e1875.
Ontheotherhand,theexpectedvaluedecuples:e1000*0.
5*10=e5000.
Undersuchcircumstances,itisreasonabletosue,sincethebalanceoftheexpectedvalueandtheexpectedcostsispositive(e5000e1875=e3125).
Thiscalculationassumeslinearvariablecosts(noeconomiesofscaleduetovariablecosts);however,partofthevariablecostsmaybedegressive,makingthetotalcostofthejointproductionofcollectiveactionontheplaintiffs'sidelessthane3000.
Forexample,e100maybelinear,resultingincostsofe1000,whilee150ofthevariablecostsmaybedegressiveandincreasenot10timesbutonly7times,sothetotalcostswouldamounttoe500+e1000+e1050=e2550.
Undersuchcircumstances,itisevenmorereasonabletosue.
Thelegalcostsonthedefendant'ssidedonotchange:e750.
Thetotalsumoflegalcostsise3300,hence,theexpectedcostsaree3300*0.
5=e1650.
Theexpectedvalueremainsunchanged:e1000*0.
5*10=5000EUR.
Undersuchcircumstances,itisreasonabletosue,sincethebalanceoftheexpectedvalueandtheexpectedcostsispositive(e5000e1650=e3350).
Anotherproblemofindividualenforcementofsimilaroridenticalclaimsemerg-ingfromthesamecauseisthatindividuallitigationmayentailsignicantpositiveexternalitiesonfellow-sufferers.
Thelitigation's"expectedcost–expectedvalue"balancemaybenegativeonindividuallevelbutpositiveongroup(orsocial)level.
Sincethepositiveexternaleconomiceffectconferredonothergroupmembersisnotinternalizedbytheindividuallitigator,thismayleadtosuboptimalenforcement.
Thishappensintestcases,whichcouldberegardedasanalternativetocollectiveactions.
Here,oneofthegroupmembers,asapioneer,institutesanindividualactioninamatterthatinvolvesaquestion(orseveralquestions)relevantforallgroupmembers.
Oncethequestionbecomesjudiciallysettledinthetestcase,thisentailsapositiveexternalityonallothergroupmemberssuingafterwards:sincethecourtanswersoneofthecrucialquestionsinthetestcase,thelitigationrisksofothergroupmembersdecrease.
Unfortunately,testcasesarenotaneffectivesubstituteofcollectivelitigation.
Oneofthereasonsisthattheymayleadtofree-riding:non-activegroupmembersfree-rideontheeffortsofthememberinitiatingthetestcase.
Collectiveactionsmaytacklethepositiveexternalityproblemthroughinternalizingallormostofthebenetsofthelaw-suitand,thus,leadingtosociallyoptimalprivateenforcement.
Atthesamemoment,notonlypositivebutalsonegativeexternaleffectsmaybepresenthere;ifgroupmemberssueonanindividualbasisandthedefendantwinsagainsttherstplaintiff,thismayhaveanegativeimpactonsubsequentplaintiffs.
24Ulen(2011:266).
162WhyAreCollectiveActionsNeededinEurope…Althoughthejudgmentgiveninthecaseofoneofthegroupmembershasnoresjudicataeffectinactionsbroughtbyothergroupmembers,thejudgmentintherstcasemayhaveprecedentialvalueoratleastpersuasiveauthority.
Hence,thedefendantmaynditrationaltoinvestmuchmoreinwinningtheearlycases,becausewinningintheseproceedingsmaydiscouragesubsequentlitigation.
25Likewise,collectiveactionsmaybecost-effectivealsoforcourts.
Economiesofscalearepresentheretoo.
Ofcourse,itistobenotedthatifindividuallitigationwouldnotoccurduetotheabovehurdlesandinconveniences,collectivelitigationmayactuallyentailextra-costsforcourts,sinceitmaybringmattersbeforethejudiciarythatwouldotherwisenotbelitigated.
Nevertheless,thiscost-savingisnotduetocost-effectivenessbutrevealsthatcollectiveactionsmayenablethelitigationofclaimsthatwouldotherwise,duetopracticalhurdles,notcomebeforethejudiciary.
2.
3WhyAreCollectiveActionsNotWorkingSpontaneouslyifTheyAreEfcientHavingdemonstratedthatcollectivelitigationmaybemoreefcientthanindividualenforcement,thequestionemerges:whydogroupmembersnotorganizethegroupproceedingsthemselvesEuropeanlegalsystemsprovideforbothsubstantiveandproceduraltoolsthatcouldbeusedforcollectivelitigation.
Groupmembersmayestablishanentity(acompanyorassociation)andassigntheirclaimstothisentity.
26Theymayalsoestablishajoinderofpartiesandsuejointly.
27Theanswerliesprimarilyinthecostsofgrouporganization.
First,thesecostsmaybeveryhigh,evenprohibitive28,incaseofsmall-claims.
Furthermore,thetraditionallegaltoolsthatcouldbeusedtoorganizethegroupwereessentiallynottailoredtotheneedsofcollectiveactions,thusincreasingthecostsoforganization.
Forinstance,incaseofajoinderofparties,individualgroupmembersmayhavedifferentlegalrepresentativesandmaymakepleadingsthatcontradicteachother.
Ajoinderofpartiesdoesnot"centralize"thegroup;itsimplyenablesgroupmemberstobepartofthesamelaw-suitandtositonthesameside.
Second,thecostsrelatedtotheorganizationofthegroupmaynotbeormaynotbeeasilyshifted.
The"loserpays"principlerelatestolegalcosts,andtheconceptoflegalcostsmaynotbetailoredtoorganizationalexpenses;hence,grouprepresentativesmaynotexpectreimbursementforthese.
MostEuropeansystemsprovidethatthelosingpartypaysthecostsoftheproceedings;however,theexpensesrelatedtotheorganizationofthegroupemergepriortotheproceedingsand,hence,theirstatus,25Ulen(2011:189).
26Nagy(2011:16).
27Nagy(2011:163).
28Ulen(2011:191,2012:79).
2.
3WhyAreCollectiveActionsNotWorking…17inthissystem,isdubious.
Thegroup'sorganizer(representative)maynotexpectareasonablereturnonhisexpenses,aswithinthegrouphemayenforceonlyhisclaim.
29Third,organizationalcostsqualifyastransactioncosts30:theyemergealsoincasetheorganizationofthegroupfailsand,hence,thecollectiveactionisnotlaunchedatall.
Sincethestakeofindividualgroupmembersissmall,theywouldnotinvestinorganizingthegroupduetothesamereasonstheydonotengageinindividuallitigation.
Fourth,evenifgrouporganizershadtherighttoclaimreimbursementfortheorganizationalcosts,thesameriskwouldbeinvolvedhereasincaseoflegalcosts:cost-shiftingoccursonlyiftheplaintiffwins,whileorganizationalexpensesemergeirrespectiveoftheoutcomeofthecollectiveaction.
2.
4HowCouldCollectiveActionsBeMadeWorkTherearedifferentmethods,whichcouldbeusedtotackletheproblemofhighorganizationalcosts.
Theseeitherreduceorganizationalexpensesortackletherisksattachedtothem.
First,opt-outsystemsareassociatedwithconsiderablylowerorganizationalcosts.
31Organizationalcostsmaybereducedsignicantlythroughprovidingthatgroupmembersdonothavetojointhegroupexplicitlytobecomepartofthecol-lectiveaction;itissufcientiftheydonotleavethegroup(opt-out).
Inthiscase,essentially,thegroupdoesnotneedtobeorganized,sincepowerofattorneyiscon-ferredongrouprepresentativesbythelaw,albeitsomeorganizationalcostsmayemerge.
Empiricalevidenceshowsthat,notsurprisingly,therateofparticipationismuchhigherinopt-outcollectiveproceedingsthaninopt-inactions.
32Second,organizationalcostsmaybemitigatedeveniftheopt-insystemisadopted.
Althoughtraditionaljoinderofpartiesandassignmentofclaimshavealwaysbeenavailableforgrouplitigation,theseentailconsiderableorganizationandcase-29Silver(2000:206–207).
30SeeFootnote25.
31Cf.
Delatre(2011:38)(Submittingthattheopt-outcollectiveactionwouldbesufcient"onitsownandwithoutfurtherincentivestoleadtoasubstantialincreaseinthenumberofvictimscompensated.
");Szalai(2014:708–709).
32SeeMulheron(2008)147–156(Astudyofjurisdictionswheremodernempiricaldataexistedshowedthatopt-outrateshadbeenbetween0.
1and13%;inrespectofjurisdictionswheresuchdatawasnotavailable,judicialsummationsindicatedanopt-outratebetween0and40%.
Ontheotherhand,inEurope,theexperienceindicatedthattherateofparticipation,thatisopt-in,wasonaveragelessthan1%inlargesizecollectiveproceedings,albeitinEnglandandWalesparticipationrateingrouplitigationvariedconsiderably,fromlessthan1%toalmost100%.
);Delatre(2011:38)("Itis(…)submittedthat,inabundleofsimilarincentivesregardingthecostoftheaction,damagesandlegalfees,theopt-outarrangementofaclassactioninvariablyincludesmoreparticipantsthatthealternateopt-inarrangement,asforequalincentives,therateofrationalapathyofvictimswillalwaysbehigherthantherateofvictimswhoopt-in.
").
182WhyAreCollectiveActionsNeededinEurope…managementcosts.
Atraditionaljoinderofpartiesisfarfromequaltoanopt-incollectiveaction.
Incaseoftheformer,individualgroupmembersretaintheirrightsovertheirowncases:theymaymakesubmissionsindependentlyfromtherestofthegroup,evenifthisthwartsthelegaltacticsofthegrouprepresentative.
Incaseofanopt-incollectiveaction,thegrouprepresentative,thoughsupervisedbythecourt,becomesthemasterofthecase.
Furthermore,intheopt-insystem,organizationalcostsmaybefurthermitigatedthroughthesimplicationofgrouporganization(e.
g.
simplifyingtheadministrativeburdensandformalrequirementsrelatedtodeclara-tionsofadherence).
33Third,theproblemoforganizationalcostsmaybemitigatedalsothroughaneffec-tivecost-shiftingmechanism:ifextendingthe"loserpays"principletoorganizationalcosts,successfulgrouprepresentativeswouldbeentitledtoclaimremunerationfortheirreasonableorganizationalexpenses.
Fourth,thisextensionofthenotionof"legalcosts"wouldnotbesufcienttomakecollectiveactionswork,becausegrouprepresentativeswouldstillruntheriskofnotbeingreimbursedfortheirorganizationaleffortsintheeventtheyfailtoorganizethegroupproperly(groupmembersdonotauthorizetheminasufcientnumberinanopt-insystem)ortheprobabilityofplaintiffsuccessislessthan100%(whichisnormallythecase).
Individuallitigationinvolvestwoparties(i.
e.
theplaintiffandthedefendant),andwhentheplaintiffconsiderswhethertosueornottosue(thatbeingthequestion),heobviouslytakesintoaccounttheincomeaccruingtohimiftheclaimissuccessfullyenforced.
Collectivelitigationinvolvesathirdactoraswell:thegrouprepresentative,whohastodrawhisownindividualbalanceofwhethertosueornottosue;however,thegrouprepresentativemaynotexpectanyincome(oronlyasmallincome,ifheisalsoagroupmember)fromtheclaimsenforced.
Theindividualplaintiffmayregarditreasonabletotaketheriskofnotbeingreimbursedforhislegalcostsandofbeingliableforthelegalcostsofthedefendant,becauseheknowsthatifhewins,hewillgetwhathesuesfor.
Ontheotherhand,thegrouprepresentativehasnoindividualstakeintheclaimorhisclaimasagroupmemberisincomparablysmallerthanthecostsandrisksheassumesintheinterestofthegroup.
The"loserpays"ruleandtheinclusionoftheorganizationalcostsinitsscopeimplythatthegrouprepresentativemaybereimbursedforhisexpenses;however,thesedonotimplythathewillbereimbursed.
Therefore,itisnoteconomicallyrationalforthegrouprepresentativetoengageingrouporganizationintheabsenceofanappropriateriskpremium,which—asageneralprinciple—isnotaffordedtohiminEurope.
34Whilegrouprepresentatives33Foradiscussiononhowcomplicateditmaybetohandleabulkofcomplaints,seePatetta(2010).
34SeeHodges(2010:373)("Insimpleterms,ajudicialcollectivedamagesprocedurewillonlybeeffectiveifthereexistbothanaggregatingprocedureandliberalnancialrules,suchthatparties(ormorelikelytheirlawyers)willhavesufcienteconomicincentivestonditattractive.
Ironically,acollectivejudicialprocedurewithoutattractivenancialreturnsforintermediarieswillnotdeliverthepolicyobjectives,butasthenancialreturnsincrease,sodoestheriskofabuse,andadversecon-sequencesbecomeinevitable.
");Cf.
Leskinen(2011:112)("[T]hepossibilityoflargecontingencyfeesprovidesincentivestolawyerstobringdamagesactionsandisanessentialprerequisiteofthefunctioningoftheclassactionmechanism,inparticular,whentheindividualclaimsaresmall").
2.
4HowCouldCollectiveActionsBeMadeWork19mayhavenon-economicinterestsinorganizingthegroup(ascivilorganizationsusuallyhave),economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremium.
Analternativesolutioncouldbeifgroupmemberscontributedtotheorganiza-tionalcoststhroughpayingafeewhenjoiningthegroup(membercontributions).
Nonetheless,thissolutionseemstobebothlegallyunfeasibleinopt-outcollectiveproceedingsandeconomicallyinefcient.
First,opt-outcollectiveproceedingsmayraiseconstitutionalconcernsinEuropebecausetheyestablishpowerofattorneywithoutauthorization.
35Themainargumentagainsttheseconcernsisthattheopt-outmechanismisjustied,becauseitconferssolelyadvantagesongroupmembers36:ifthegrouprepresentativewins,groupmembersreceiveredress,ifhefails,groupmembersdonothavetopayanything.
37Thisargumentwouldbelostandconsti-tutionalconcernswouldemergeifgroupmemberswereheldliableforthecostsofanactiontheydidnotexpresslyconsentto.
Second,demandingacontributionfrommemberswouldbeinefcientbecauseitwouldplacethelitigationriskonthelessinformedparty.
Theoretically,theriskoflitigationmaybeplacedeitheronthegrouprepresentativeorongroupmembers.
Grouprepresentativesareinthebestpositiontoassesstheprobableoutcomesandtherisksoftheproceedings;hence,itisreasonabletoplacetheriskoflitigationonthem,compensatingthemforthishazardthroughanappropriateriskpremium.
Theabovereasoningholdstruealsofortraditionallegalcosts.
Underthegeneralprinciple,groupmembersshouldadvancetheirlegalcostsandshouldreimbursethedefendantforhislegalcostsifhewins.
Alternatively,atleastastoopt-outproceedings,thesameconstitutionalandeconomicargumentsmaybeappliedhereasincaseoforganizationalcosts.
Cost-bearingincaseofpowerofattorneywithoutauthorization(thatis,opt-outcollectiveactions)mayraiseconstitutionalconcerns;furthermore,thegrouprepresentativeisinthebestpositiontoassessthepotentialrisksattachedtolitigation,thus,itismoreefcienttoplacethisriskonthegrouprepresentativeandtoprovidehimwithanappropriateriskpremium.
Insummary,inordertomakecollectiveactionsworkable,measuresaretobetakenintwodirections.
Organizationalcostsshouldbelessenedandtheriskofnotbeingreimbursedforthelegalcostsandofbeingheldliableforthelegalcostsofthedefendantshouldbetackledthroughanadequateriskpremium.
35SeeLeskinen(2011:87).
ForFrance,seee.
g.
ConseilConstitutionnelDecisionNo.
89–257DC,25July1989(Fr.
),reproducedinMagnierandAlleweldt(2008)ForHungary,seee.
g.
HungarianConstitutionalCourt'sdecisionsinAlkotmánybíróság(AB)(ConstitutionalCourt)4January1994,1/1994.
(I.
7.
);Alkotmánybíróság(AB)(ConstitutionalCourt)17April1990,8/1990.
(IV.
23.
).
36SeeStuyck(2009:491),Ioannidou(2011:79–80).
37Ontheargumentthatcollectiveproceedingsimproveaccesstojustice,seeIoannidou(2011:71–73).
202WhyAreCollectiveActionsNeededinEurope…2.
5SummaryThischapterdescribedthehurdlesthatmaypreventtheindividualenforcementofsmallclaimsandleadtosuboptimalenforcement.
Itwasdemonstratedthatcollec-tivelitigationismoreefcientinseveralwaysthanindividualenforcement,andinnumerouscasesitistheonlyfeasibleenforcementmechanism.
Giventhattheygen-erateeconomiesofscaleandtackletheproblemofpositiveexternalities,collectiveactionsmaybeareasonablepossibilityalsoincaseswherethecostsofindividualactionareprohibitivelyhigh.
Havingshownthatincertaincasescollectivelitigationismoreefcient,itwasassertedthattheabsenceofthespontaneousemergenceofcollectiveactionsischieyduetothecostsofgrouporganization,whichqualifyastransactioncostsandnormallycannotbeshiftedontothelosingdefendant.
Sinceorganizationalcostsarecruciallyimportant,theregulationshouldprimarilyaddressthisissue.
Organizationalcostscouldbeconsiderablylessenedwiththeintroductionoftheopt-outsystem.
Intheopt-insystem,theproblemoforganizationalcostscouldbemit-igatedthroughthesimplicationofgrouporganization(e.
g.
simplifyingtheadmin-istrativeburdensandformalrequirementsrelatedtodeclarationsofadherence).
Irre-spectiveofwhetheranopt-outoranopt-insystemischosen,organizationalcostsshouldbeincludedinthescopeofthe"loserpays"cost-shiftingrule(thelosingdefendantshouldbeobligedtoreimbursethegrouprepresentativenotonlyforlegalcostsbutalsofororganizationalcosts).
Forthegrouprepresentative,itiseconomicallyrationaltoengageingrouporga-nizationonlyinexchangeforanappropriateriskpremium,whichisnotaffordedunderthegeneralprinciplesofcivilprocedureinEurope.
Economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremium.
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0InternationalLicense(http://creativecommons.
org/licenses/by/4.
0/),whichpermitsuse,sharing,adaptation,distributionandreproductioninanymediumorformat,aslongasyougiveappropriatecredittotheoriginalauthor(s)andthesource,providealinktotheCreativeCommonslicenseandindicateifchangesweremade.
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Chapter3MajorEuropeanObjectionsandFearsAgainsttheOpt-OutSystem:Superego,EgoandIdThischapterpresentsandanalysestheobjectionsagainstclassactionsandinquireswhytheappearanceandreceptionofcollectiveactions,especiallythenotionof"representationwithoutauthorization",havesparkedfuriousoppositioninEurope.
Itaddressesandrefutesthemajorargumentsandfearsagainsttheopt-outsystem(unconstitutionality,Europeantraditionalism,technicaldifcultiesandabusiveliti-gation),andinquireswhetherthesearegenuinescruplesorpretextsveilingadeeperaversionagainstclassactions.
ItisarguedthattheheadspringofEurope'sinstinctiveresistanceagainstAmericanclassactionsandthesubconsciousreasonwhyitissodifculttoreconcilethe"Copernicanturn"ofclassactionswithEuropeantradi-tionalismarethetabooofpartyautonomyandthestate'sentrenchedprerogativetoenforcethepublicinterest.
AninquiryintothedeeplayersrevealsthattheEuropeanreactionmaybetracedbacktothepeculiarEuropeanthinkingabouttherelationshipbetweenthemarket(orprivateenterprise)andthepublicinterestandthecontinentalnotionthattheenforcementofthepublicinterestistheinalienableprerogativeofthestate.
13.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretextsClassactions,andinparticularthenotionthatgroupmembersmayberepresentedwithoutexpressauthorization,havebeencriticizedfromfourangles.
First,"represen-tationwithoutauthorization"isclaimedtobeunconstitutionalduetoitsencroach-mentonprivateautonomyand,second,tobealientocontinentallegaltraditions.
Third,thepracticalfeasibilityofclassactionshasbeenimpugnedwithreferencetotechnicaldifcultiesofidenticationandproof.
Fourth,classactionshavebeenclaimedtoinictsignicantsocialdamagesduetotheirbeingpronetoabusivelitigation(litigationboomandblackmailingpotential).
1ConcerningtherepetitiousEuropeandebateoncollectiveactions,seeNagy(2015).
TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_323243MajorEuropeanObjectionsandFearsAgainst…3.
1.
1ConstitutionalConcerns:PrivateAutonomyandTacitAdherenceTheopt-outsystemmayraiseconstitutionalconcerns,since"representationwithoutauthorization"mayimpairgroupmembers'privateautonomy,whichconsists,inthiscontext,oftherighttodecidewhetherornottoenforceaclaimandhowtoenforceit.
2However,therearequiteafewcompellingargumentsthatsuggestthattheopt-outscheme,asfarassmallclaimsareconcerned,shouldnotbeoutrightunconstitutional.
Althoughthecollectiveactionmaycertainlybeshapedinamannerthatgoescountertoconstitutionalrequirements,theconstitutionalconcernsrelatingtosmallclaimsaremainlyanopticalillusion.
Europeantraditionalismisoftenwrappedupinconstitutionalparlance.
InGer-many,opt-outclassactionsappeartohavebeenrejected,amongothers,forconsti-tutionalreasons:ithasbeenarguedthatrepresentationwithoutauthorizationmayraiseseriousconstitutionalconcerns,e.
g.
itmayimpairtherighttoahearing(RechtzumrechtlichenGehr)andtherightofdisposition(Dispositionsgrundsatz).
3Whileitcouldbearguedthatsilenceshouldberegardedtoimplyacceptance,suchalegalconsequencemaybeentailedonlybypropernoticeandithasbeenhighlyquestion-ablewhetherconstructiveknowledgewouldsufceinthisregard.
4Theforegoingconstitutionalconcernshavebeentakensoseriouslythatin2005theGermanFederalCartelOfce(Bundeskartellamt),notwithstandingtheverystrongpolicyforcom-petitionlaw'sprivateenforcement,discardedtheideaofopt-outcollectiveactionsapparentlybecauseitwassaidtorestricttherighttoahearingandtoviolatetheprinciplethatthepartyisthemasterofhisowncase(rightofdisposition).
5InthecontextofFrenchlaw,ithasbeenconsistentlyreferredtotheprincipleof"nulneplaideparprocureur"("noonepleadsbyproxy").
6AccordingtothisentrenchedprincipleofFrenchcivilprocedurallaw,forhavingstanding,theplaintiffhastohavealegitimateinterestinthecaseand,tobelegitimate,theinterestmustbedirectandpersonal;asacorollary,allthepersonsinvolvedinthelawsuitmustbeidentiedandrepresentedintheprocedure.
7Itistruethatmandatoryrepresentation,thatis,representationwithoutautho-rizationnotsupplementedbytherighttoopt-out,seemstobeirreconcilablewithconstitutionalrequirements.
Forinstance,inSpain,wherethejudgment'sresjudicataeffectsmayextendtonon-litigantgroupmembers,ithasbeenconvincinglyargued2CommissionCommunicationTowardsaEuropeanHorizontalFrameworkforCollectiveRedress,COM(2013)401nal,p.
11.
SeeStrong(2013:239–247)(Referringtotheseconsiderationsastheplaintiff's"individualparticipatoryright".
).
3SeeGreiner(1998:189),Fiedler(2010:237–245),Stadler(2011:172–173),Lange(2011:129–171),Geiger(2015:245–255).
4Stadler(2015:569–578).
Forargumentsthatpublicnoticeincollectiveactionsdoesnotviolatetheprincipleofdisposition,seeHalfmeier(2012:183).
5Bundeskartellamt(2005:30–31).
6Mazen(1987:383–384).
7PoissonandFléchet(2012:166).
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts25thatabsentaspecicstatutoryprovision,therighttooptoutarisesfromthecon-stitutionalprinciplesofdueprocessandaccesstojustice.
8However,representationwithoutauthorizationsupplementedwiththerighttooptoutmaymeritadifferenttreatment.
ItisnoteworthythatthisisinlinewiththeUSSupremeCourt'sstancethatclassactionsbasedonrepresentationwithoutauthorizationmeettherequirementsofdueprocessaslongasmembershavetherighttooptout.
9Ithastobenotedthatacomparablesetofconstitutionalargumentsmaybelinedupfortheintroductionofcollectiveactions.
First,intheabsenceofacollectivelitigationmechanism,numeroussmallclaimswouldnotgettocourt10and,hence,thecollectiveactionconferssolelybenetsongroupmembers(providedtheydonotruntheriskofbeingliableforthedefendant'slegalcostsincasethegrouprepresentativefailstowintheaction).
Itwouldbeperversetorefertotheimpairmentofprivateautonomyinacasecharacterizedbyobligeeinertia,11wherethelawdoesnotensuretheclaim'spracticalenforceability.
Second,opt-outsystemsembed,bydenition,therighttooptout.
Whilemanda-toryrepresentation(thatis,whengroupmembersarecompelledtobepartofthegroupandcannotoptout)mayobviouslygocountertotherighttoprivateautonomy(thatis,therighttodecidewhetherornottosue,andhowtoenforcetheclaim),thereisno"forcedmembership"incaseofanopt-outsystem.
Groupmemberscanleavethegroupwithoutanyfurther.
Theopt-outschememerelyreversesthemechanismofadherenceandinfersassentfromsilence.
Inprinciple,agroupmemberhastosubmitadeclaration,ifheenvisagesbeingpartoftheaction.
Intheopt-outsystem,agroupmemberhastosubmitadeclaration,ifhedoesnotwanttobepartoftheaction.
Thegroupmembermakesthedecisionandsinceexperienceshowsthatthevastmajorityofgroupmembersdoesnotoptout,arguably,itisreasonabletoreversethemechanismofadherence.
12Ithastobenotedthattheopt-outsystemismuchmoreconstitutionalandpre-servesprivateautonomymuchbetterthantheEUInjunctionDirective13covering17consumerprotectionUnionacts.
14TheDirectiveauthorizesvariousentitiestolaunchproceedingsforadeclaratoryjudgmentorinjunctiononbehalfofaclassof8ForacomprehensiveanalysisontheSpanishclassactionmechanism,seeMieres(2000).
SeealsoPieiro(2009:61–88),Jiménez(2008),López(2001),Estagnan(2004:9–10).
9PhilippsPetroleumvShutts472US797,813–814(1985).
10Udvary(2015:242–244).
11SeeEisenbergandMiller(2004:1529,1532),IssacharoffandMiller(2009:179,203–206),IssacharoffandMiller(2012:37,60).
12SeeEisenbergandMiller(2004:203–206),IssacharoffandMiller(2012:60).
13Directive2009/22/EConinjunctionsfortheprotectionofconsumers'interests,[2009]OJL110/30.
SeeTrstenjak(2015:689–691).
14SeeAnnexIoftheDirective,lastamendedbyDirective2019/771oncertainaspectsconcerningcontractsforthesaleofgoods,amendingRegulation(EU)2017/2394andDirective2009/22/EC,andrepealingDirective1999/44/EC(OJL136,22.
5.
2019,p.
28).
TheAnnexcurrentlyliststhefollowing17Unionacts:Directive85/577/EECtoprotecttheconsumerinrespectofcontractsnegotiatedawayfrombusinesspremises(OJL372,31.
12.
1985,p.
31);Directive87/102/EECfortheapproximationofthelaws,regulationsandadministrativeprovisionsoftheMemberStatesconcerningconsumercredit(OJL42,12.
2.
1987,p.
48);Directive89/552/EEConthecoordinationofcertainprovisions263MajorEuropeanObjectionsandFearsAgainst…unidentiedconsumerswithouttheneedforanyindividualauthorizationorassent,and,theoretically,itdoesnotevenmakeitpossibleforgroupmemberstoleavethegroup.
Thismeansthatgroupmemberscannotopt-outeveniftheywantto;theyarestuckinthegroup.
Still,theconstitutionalityoftheInjunctionDirectivehasneverbeenquestioned.
Third,ithastobenotedthatwhiletherightofdispositionisconstitutionallyprotected,accesstojusticeisequallyaconstitutionalfundamentalright.
Thepurposeofcollectivelitigationistomakepracticallyunenforceablerightsareality.
Whateverthestrengthofthesepointsmaybe,interestingly,therigidunconsti-tutionalityargumentshavefoundnoreectionintheconstitutionalcase-law.
Thissuggeststhatwhilecertainlimitsdoapply,opt-outmechanismsarenotoutrightunconstitutional.
Whilerepresentationwithoutauthorizationdoescallforajustica-tion,itmaybewarrantedinsmall-valuecases,whichwouldverylikelynotbebroughttocourtanyway.
Thecasesthatcanberaisedfromnationalconstitutionallaws,usedasargumentsthattheopt-outschemeisirreconcilablewithnationalconstitutionalrequirements,canbedistinguishedfromtheenforcementofsmallpecuniaryclaimsinanopt-outcollectiveprocedure.
Infact,in2014theFrenchConstitutionalCoun-cil(Conseilconstitutionnel)conrmedtherecentlyintroducedFrenchregulatoryregime,which,incertainpoints,hassalientopt-outfeatures.
TheEuropeanCourtofHumanRights(ECtHR)addressedthequestionofrepre-sentationwithoutauthorization15inLithgowv.
UnitedKingdom.
16ThecaseemergedinthecontextoftheUK'sexpropriationofaBritishcompany.
Toavoidtheoodlaiddownbylaw,regulationoradministrativeactioninMemberStatesconcerningthepursuitoftelevisionbroadcastingactivities:Articles10to21(OJL298,17.
10.
1989,p.
23);Directive90/314/EEConpackagetravel,packageholidaysandpackagetours(OJL158,23.
6.
1990,p.
59);Directive93/13/EEConunfairtermsinconsumercontracts(OJL95,21.
4.
1993,p.
29);Directive97/7/EContheprotectionofconsumersinrespectofdistancecontracts(OJL144,4.
6.
1997,p.
19);Directive1999/44/EConcertainaspectsofthesaleofconsumergoodsandassociatedguarantees(OJL171,7.
7.
1999,p.
12);Directive2000/31/EConcertainlegalaspectsoninformationsocietyservices,inparticularelectroniccommerce,intheinternalmarket(Directiveonelectroniccommerce)(OJL178,17.
7.
2000,p.
1);Directive2001/83/EContheCommunitycoderelatingtomedicinalproductsforhumanuse:Articles86to100(OJL311,28.
11.
2001,p.
67);Directive2002/65/ECconcerningthedistancemarketingofconsumernancialservices(OJL271,9.
10.
2002,p.
16);Directive2005/29/ECconcerningunfairbusiness-to-consumercommercialpracticesintheinternalmarket(OJL149,11.
6.
2005,p.
22);Directive2006/123/EConservicesintheinternalmarket(OJL376,27.
12.
2006,p.
36);Directive2008/122/EContheprotectionofconsumersinrespectofcertainaspectsoftimeshare,long-termholidayproduct,resaleandexchangecontracts(OJL33,3.
2.
2009,p.
10);Directive2013/11/EUonalternativedisputeresolutionforconsumerdisputes(OJL165,18.
6.
2013,p.
63):Article13;Regulation524/2013ononlinedisputeresolutionforconsumerdisputes(RegulationonconsumerODR)(OJL165,18.
6.
2013,p.
1):Article14;Regulation2018/302onaddressingunjustiedgeo-blockingandotherformsofdiscriminationbasedoncustomers'nationality,placeofresidenceorplaceofestablishmentwithintheinternalmarketandamendingRegulations2006/2004and2017/2394andDirective2009/22/EC(OJL60I,2.
3.
2018,p.
1);Directive2019/770oncertainaspectsconcerningcontractsforthesupplyofdigitalcontentanddigitalservices(OJL136,22.
5.
2019,p.
1).
15ForananalysisontheECtHRcase-law,seeStrong(2013:243–245).
16Caseno.
9006/80;9262/81;9263/81;9265/81;9266/81;9313/81;9405/81Lithgowv.
UnitedKingdom,8July1986,[1986]8ECHR329.
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts27ofindividualactions,thelawonnationalizationprovidedfortheappointmentofa"stockholders'representative",whowastobeelectedbytheshareholdersorappointedbythegovernmentandwhosepowerofattorneytoclaimcompensationprecludedgroupmembers'individualactions.
Inotherwords,theschemeestablishedmandatoryrepresentationwithoutauthorizationwheregroupmemberswereforcedtojoinandcouldnotoptout.
TheECtHRproceededfromtheproposition,asestablishedinAshingdane,17thattherightofaccesstothecourtssecuredbyArticle6para.
1(art.
6-1)isnotabsolutebutmaybesubjecttolimitations;thesearepermittedbyimplicationsincetherightofaccess'byitsverynaturecallsforregulationbytheState,regulationwhichmayvaryintimeandinplaceaccordingtotheneedsandresourcesofthecommunityandofindividuals'.
Thelimitationsmaynotimpairtheveryessenceoftherightandneedto"pursuealegitimateaim"andthereneedstobe"areasonablerelationshipofproportionalitybetweenthemeansemployedandtheaimsoughttobeachieved.
"18Astotheschemeatstake,theECtHRcametotheconclusionthattheseconditionsweremet.
Theveryessenceoftherighttoacourtwasnotimpaired,19becauseindividualrightswere(indirectly)safeguarded:thegrouprepresentativewas"appointedbyandrepresentedtheinterestsofall"groupmembersandindividualgroupmemberscouldseekrem-edyincasetherepresentativebreachedoneofhisduties.
Thisconclusionwasnotunderminedbythefactthatthegroupmembers'righttocontroltherepresentativewasverylimitedanditwasnottheindividualshareholdersbuttheircommunitywhowasentitledtoexercisetheserights.
20Furthermore,theCourtheldthatthescheme"pursuedalegitimateaim,namelythedesiretoavoid,inthecontextofalarge-scalenationalizationmeasure,amultiplicityofclaimsandproceedingsbroughtbyindividualshareholders"andtherewas"areasonablerelationshipofproportionalitybetweenthemeansemployedandthisaim.
"21TheabovejurisprudencewasconrmedinWendenburg.
22Here,inthecontextofaprocedurebeforetheGermanFederalConstitutionalCourt(Bundesverfassungs-gericht),theECtHR,referringtoLithgow,heldthatwhile"theapplicantswerebarredfromappearingindividuallybeforethatcourt","inproceedingsinvolvingadecisionforacollectivenumberofindividuals,itisnotalwaysrequiredorevenpossiblethateveryindividualconcernedisheardbeforethecourt.
"Nationalconstitutionalcourtsfollowedaverysimilarlineofreasoning.
Intheearly'90s,duetotheparticularhistoricalsituation,theHungarianCon-stitutionalCourthadthechancetoadjudicatecasescenteringaroundrepresentationwithoutauthorization.
In1989,thesocialistregimecollapsedinHungaryandthe17Caseno.
8225/78Ashingdanev.
UnitedKingdom,28May1985,[1985]ECHR8,SeriesAno.
93,para57.
18Lithgow,para194.
19Para196.
20SeeFootnote18.
21Para197.
22Caseno.
71630/01WendenburgandOthersv.
Germany,6February2003,[2003-II]ECHR353.
283MajorEuropeanObjectionsandFearsAgainst…countryadoptedanewconstitution,23whilethelawsadoptedbeforehandpersisted.
AlthoughtheparliamenttriedtoweedHungarianlawoftheprovisionsthatwerenotreconcilablewithaconstitutionaldemocracy,somereminiscencesremainedandhadtobequashedbytheConstitutionalCourtitself.
Oneofthesewastherulesofsocialistlawthatconferredmandatoryrepresentationwithoutauthorizationontheattorneygeneralandtradeunions.
Theseentitiescouldlaunchcivilproceedingsevenagainsttheobligee'swill.
Theselawshadaverypeculiarfeature:therightofrepre-sentationoftheseentitieswasgeneralandmandatory,thatis,theynotonlylackedtheparty'sauthorization,buttherepresentedpersoncouldnotoptoutandterminatehisownaction.
TheseruleswerestruckdownbytheConstitutionalCourt.
However,thecourtalsoestablishedthat,ifjustied,"representationwithoutauthorization"canbeconstitutional.
Albeitthatthesecasesinvolvednoclassactions,theyprovideclearguidancealsoastotheopt-outprinciple'sconstitutionality.
InCase8/1990(IV.
23.
)AB,theHungarianConstitutionalCourtdealtwithtradeunions'righttorepresentanemployeewithoutauthorization.
Theconstitutionalconcernswereentailedbythetradeunion's"mandatorypowerofattorney"andnotbya"presumedpowerofattorney.
"Thelegislationdidnotpreventtradeunionsfromexercisingtherightofrepresentationagainsttheemployee'swill,whichwereauthorizedtointervenealsoinmatterswheretheemployeewasnotamemberofthetradeunion.
TheConstitutionalCourtsuggestedthatthelegislatormaymaintainthetradeunion'srightofrepresentationinrelationtoitsownmembers.
InCase1/1994.
(I.
7.
)AB,theConstitutionalCourtdealtwiththeattorneygeneral'spowertoactonbehalfofprivateparties.
TheCourtheldthatpartyautonomy(rightofdisposition)embracesboththelibertytoactandthelibertynottoact;theattorneygen-eral'sall-pervasivepowertosueandappealwithouttheparty'sexpressassentrestrictstheparty'sconstitutionalrightsandneedstobeexaminedwhetherthisrestrictionisnecessaryandproportionate.
Inthiscase,theConstitutionalCourtcametothecon-clusionthattherewerenoconstitutionallyacceptablelegitimateendsjustifyingtheattorneygeneral'sblanketpowertoactonbehalfoftheparty.
Hereagain,themostimportantsourceofconcernwastheattorneygeneral's"mandatorypowerofattor-ney",which—ifwarrantedbyanimportantnationaloreconomicinterest—couldbeexercisedalsoagainsttheparty'swill.
Atthesametime,theConstitutionalCourtdidnotquestiontheattorneygeneral'spowertosueincaseswheretheobligeewasnotabletoprotecthisrights.
Quitethecontrary,theCourtheldthatinsuchcasesrepresentationwithoutauthorizationisconsideredaninevitablerestrictionofpartyautonomy(rightofdisposition)andtheprotectionofthesubjectiverightsofthepartywhoisunabletoenforceorprotecthisrightsistheconstitutionalobligationofthestate.
Accordingly,thestatehastoensurethatinsuchcasesoneofitsorgansactsforthesakeofprotectingtherightsoftheindividual.
23Technically,itamendedtheoldconstitutioncomprehensively.
However,inessence,theamend-ment,infact,createdanewconstitution.
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts29Insum,thecase-lawoftheHungarianConstitutionalCourtsuggeststhatrep-resentationwithoutauthorizationmaymeettheconstitutionalrequirements,ifitisjustiedbyalegitimateend.
Boththeabsenceofa"mandatorypowerofattorney"andtheparty'srighttooptoutpointtowardscompliancewiththeconstitutionalrequirements.
Whiletheabovecasesgivenoguidanceastowhetherpublicnoticeissufcientorgroupmembersneedtobeinformedindividuallyaboutthecollectiveactionandtherighttooptout,theyindicatethatifthepartyisunabletoprotecthisrights,thestateisevenobligedtointervene.
TheFrenchConstitutionalCouncil(ConseilConstitutionnel)examinedtheques-tionofrepresentationwithoutauthorization24rstin1989inthecontextoftradeunions'righttolaunchproceedingsonbehalfoftheirmembers,andrecentlyitscru-tinizedthedefactoopt-outmechanismintroducedbytheFrenchlegislatorin2014.
ThematterconcerninggroupactionsinitiatedbyatradeuniononbehalfofitsmembersbecamefamousintheEuropeanscholarshiponclassactionsandhadbeenreferredtoasanauthoritytojustifytheunconstitutionalityoftheopt-outsystem.
Notsurprisingly,thiscasecenteredaroundtheissueofpropernotice,whichwasconsid-eredtobeanessentialrequirementagainstrepresentationwithoutauthorization.
Here,theFrenchConstitutionalCouncilheldthattheemployeeistobe"af-fordedtheopportunitytogivehisassentwithfullknowledgeofthefactsandthatheremainedfreetoconductpersonallythedefenseofhisinterests"andheshallhavetheopportunitytooptoutfromtheprocedure.
Furthermore,"theemployeeconcernedmustbeinformedbyregisteredletterwithaformofacknowledgementofreceiptinorderthathemay,ifhedesiresso,objecttothetradeunion'sinitiative.
"Thisrulingwasinterpretedbymanyasexcludingthepossibilityofanopt-outsystemassuchschemessecurenoactualknowledge.
25Althoughthisquestionlostmuchofitssignicance,asthe1989decision,what-everitsproperconstructionmaybe,seemstohavebeenjumpedbythe2014decisionanalyzedbelow,ithastobenotedthat,arguably,thefactpatternaddressedbythe1989decisioncanbedistinguishedfromopt-outsystemsinsmallclaimprocedures.
Theformerdealtwithalawthatauthorizedtradeunionstolaunchanyaction(toutesactions)onbehalfoftheemployee,includingclaimsofunfairdismissal.
26Pecu-niarysmallclaimscanbeclearlydistinguishedfromemploymentlawclaimsatlarge,especiallyunfairdismissalmatters:thelatternormallyinvolvehigherstakes,highermonetaryvalueandmayleadtotheemployee'sreadmission(whichentailspersonalconsequences).
Furthermore,theFrenchConstitutionalCouncildidnotholdthatrepresentationwithoutauthorizationorinferenceoftherightofrepresentationfromtheemployee'ssilencewouldbeunconstitutional.
Quitethecontrary,itheld24InrelationtoFrenchconstitutionalconsiderations,seePoissonandFléchet(2012:65–166).
25Dec.
Cons.
Const.
N°89-257DC,July25th1989.
ReproducedinMagnierandAlleweldt(2008:2).
26Id.
atpara25.
303MajorEuropeanObjectionsandFearsAgainst…thatiftheemployeefailstoobjecttothetradeunion'sprocedure,hecanberegardedasadheringtoit.
27TheFrenchConstitutionalCounciltreatedthiscaseratherasanissueofnotice:theemployeehastobeinformedbyregisteredmailandactualnoticehastobeensured.
28Accordingly,therequirementestablishedbytheFrenchCon-stitutionalCouncilconcerningopt-outregimeswaspropernotice.
Ithastobetakenintoconsiderationthat,asnotedabove,theFrenchstatute'sopt-outschemecoveredthewholespectrumofemploymentclaimsandtheconstitutionalrequirementscon-cerningthemeansofnoticemaybelessstringentincaseofsmall-valuepecuniaryclaims.
In2014,Franceadoptedcollectiveactionrulesthatremainedwithinthelimitssetupbythedecisionof1989.
Althoughundertherulesof2014,thegrouprepre-sentativemaylaunchacollectiveactionwithouttheexpressauthorizationofgroupmembers,thenaljudgment,inessence,willextendonlytothosewhoexpresslyaccepttheaward;atthisstage,tacitadherenceisnotsufcient.
Thisregimepassedthetestofconstitutionality.
ItseemsthatitwasdecisivefortheFrenchConstitutionalCouncilthattheresjudicataeffectscoversolelythosegroupmemberswhoreceivedcompensationattheendoftheprocedure.
29Apparently,thecircumstancethatonlybenetsaccruetogroupmembersandthatthejudgment'sresjudicataeffectscoveronlythosegroupmemberswhoassentedtoit(sincecompensationcanbepaidonlyifthegroupmemberacceptsthenaljudgment),weresufcienttosatisfythecon-stitutionalconcerns.
Allinall,althoughopt-outcollectiveactionsdoraiseconstitutionalissuesinsomeEUMemberStates,theaboveargumentsandcase-lawsuggestthattheyarefarfromirreconcilablewiththeconstitutionaltraditionscommontotheEuropeanUnion'sMemberStates.
3.
1.
2Opt-OutCollectiveActionsAreAlientoContinentalLegalTraditionsThisstatementis,infact,nottrue.
Itmayhavebeentruesomedecadesago,however,inthelastcoupleofdecadesEuropehasseentheappearanceofcollectiveactionlawsinanumberofMemberStatesthatenabletheenforcementofpecuniaryclaimsinanopt-outsystem(aswillbediscussedbelow).
Furthermore,EUlawitselfcontainsaveryimportantandpopularopt-outmechanismthatpermitsrepresentationwithoutauthorization(EUInjunctionDirective).
27Id.
atparas25–26.
28Id.
atpara26.
29Decision2014-690of13March2014(Le14novembre2014,JORFn°0065du18mars2014,Texten°2,Décisionn°2014-690DCdu13mars2014),paras10and16.
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts31TheInjunctionDirectivecovers17consumerprotectionUnionacts30andempow-ersvariousentitiestolaunchproceedingsforadeclaratoryjudgmentorinjunctiononbehalfofaclassofunidentiedconsumers,withoutanyneedforindividualautho-rizationorassent.
Thepropositionthatjudgmentsrenderedincollectiveactionsforaninjunctionmayandshallhavelegaleffectsonallinterestedconsumerswascon-rmedbytheCJEUinCaseC-472/10NemzetiFogyasztóvédelmiHatóságvInvitelTávkzlésiZrt.
31ThecasedealtwithArticle7oftheUnfairTermsDirective,32whichenshrinesasimilarcollectiveactionforinjunction.
TherulingmaybeextrapolatedtoallcollectiveactionscomingundertheInjunctionDirective.
"[T]henationalcourtsarerequired(…)todrawalltheconsequencesprovidedforbynationallawinordertoensurethatconsumerswhohaveconcludedacontracttowhichthoseGBC[generalbusinessconditions]applywillnotbeboundbythatterm.
(…)[TheDirective]doesnotprecludethedeclarationofinvalidityofanunfairtermincludedintheGBCofconsumercontractsinanactionforaninjunction(…)fromproducing,inaccordancewiththatlegislation,effectswithregardtoallconsumerswhoconcludedwiththesellerorsupplierconcernedacontracttowhichthesameGBCapply,includingwithregardtothoseconsumerswhowerenotpartytotheinjunctionproceedings;wheretheunfairnatureofatermintheGBChasbeenacknowledgedinsuchproceedings,nationalcourtsarerequired,oftheirownmotion,andalsowithregardtothefuture,totakesuchactionthereonasisprovidedforbynationallawinordertoensurethatconsumerswhohaveconcludedacontractwiththesellerorsuppliertowhichthoseGBCapplywillnotbeboundbythatterm.
"33Whatismore,theprocedureprovidedforbytheInjunctionDirectiveis,literallyspeaking,notanopt-outscheme(infact,itis"worse"),sinceitdoesnotmakeitpossibleforgroupmemberstoleavethegroup.
Thatis,groupmemberscannotoptouteveniftheywantto—theyarestuckinthegroup.
Althoughpecuniaryclaimscannotbeenforcedbymeansofthismechanism,fromtheperspectiveoflegaltraditionthisshouldmakenodifference,sincebothpecuniaryandnon-pecuniaryclaimsare,legallyspeaking,claims.
Itseemsthatthereisnolegitimatereasontoaccepttheopt-outsystemfordeclaratoryjudgmentsandinjunctionsandtopronouncethisanalienconceptioninrelationtopecuniaryclaims.
Althoughtheopt-outsystemdoesqualifyasaminoritypositioninEurope,itisfarfrombeingunknown.
Currently,intheEuropeanUnionthereare10MemberStateswhereitispossibletoenforcepecuniaryclaimsinanopt-outsystem:Bulgaria,3430SeeAnnexIoftheDirective,lastamendedbyDirective2019/771oncertainaspectsconcerningcontractsforthesaleofgoods,amendingRegulation(EU)2017/2394andDirective2009/22/EC,andrepealingDirective1999/44/EC(OJL136,22.
5.
2019,p.
28).
31ECLI:EU:C:2012:242.
32Directive93/13/EEConunfairtermsinconsumercontracts(OJL95,21.
4.
1993,p.
29).
33Paras43–44(emphasisadded).
34Chapter33,Sections379–388oftheBulgarianCodeofCivilProcedure,foranEnglishversionofthestatutorytext,seehttps://kenarova.
com/law/Code%20of%20Civil%20Procedure.
pdf.
Accessed20April2019.
SeeKatzarskyandGeorgiev(2012:64).
323MajorEuropeanObjectionsandFearsAgainst…Belgium,35Denmark,36France,Greece,37Hungary,38Portugal,39Slovenia,40Spain41andtheUnitedKingdom.
42Asillustratedabove,althoughFrenchlawadoptedauniquepattern,whichformallyretainedtherequirementofopt-in,theFrenchsystemcanbecharacterizedasadefactoopt-outsystem.
Thismeansthatapproximatelyone-thirdoftheMemberStateshasanopt-outsysteminplace.
43Finally,itappearstobeperversetousetraditionasablockingargumentwhendraftinganewscheme.
Ithardlyseemstobereasonabletorejectanewregulatorysolutionsimplyonthebasisthatitisnew.
Theopt-outschemeis,indeed,anovelregulatorysolutionincontinentalEurope,however,itcanbejudgedonlyafterafull-blownanalysis,takingintoaccountitsmeritsanddrawbacks.
Itwouldbetrulyperversetosay,inthecourseofsearchingfortheregulatorysolutiontobeadopted,thatanewregulatoryconceptshouldnotbeadoptedsimplybecauseitisnewandnotpartofthelaw(thelawwhichisconsideredforreform).
35TheBelgiansystemleavesittothejudgetodecidewhethertheactionshouldbeconductedintheopt-inortheopt-outschene.
LawInsertingTitle2on"CollectiveCompensationAction"inBookXVII"SpecialJurisdictionalProcedures"oftheCodeofEconomicLaw,28March2014,MoniteurBelge(M.
B.
)(OfcialGazetteofBelgium(29March2014)(Loiportantinsertiond'untitre2Del'actionenréparationcollectiveaulivreXVIIProcéduresjuridictionnellesparticulièresduCodededroitéconomiqueetportantinsertiondesdénitionspropresaulivreXVIIdanslelivre1erduCodededroitéconomique).
36InDenmark,itisuptothecourttodecidewhethertheactionhastobeconductedintheopt-inortheopt-outsystem.
Sections254a–254eoftheAdministrationofJusticeAct(Lovomrettenspleje).
TherulesoncollectiveactionswereinsertedthroughActno.
181of28February2007.
ThisisverysimilartotheNorvegiansystemwhereitisuptothecourttodecidewhethertheproceedingshavetobecarriedoutintheopt-inortheopt-outsystem.
Chapter35ofActof17June2005no.
90relatingtomediationandprocedureincivildisputes(TheDisputeAct)(Lovommeklingogrettergangisiviletvister(tvisteloven)).
SeeKiurunenandLindstrm(2012:234).
37Articles10(16)-(29)ofLaw2251/1994onConsumers'Protection.
ForanEnglishtranslation,seehttps://www.
eccgreece.
gr/wp-content/uploads/2015/07/N2251-1994-enc2007-en1.
pdf.
38Section92ofHungarianCompetitionAct(1996.
éviLVII.
trvényatisztességtelenpiacimaga-tartásésaversenykorlátozástilalmáról);Sections38-38/AofHungarianConsumerProtectionAct(ActCLVof1997)(1997.
éviCLV.
trvényafogyasztóvédelemrol).
39Act83/95,of31August,onProceduralParticipationandPopularAction(Lein.
o83/95,de31deAgosto,DireitodeParticipaoProcedimentaledeAcoPopular),asrevisedbyDecree-Law214-G/2015,of2October.
40LawonCollectiveActions(Zakonokolektivnihtobah—ZkolT),OfcialJournaloftheRepublicofSloveniaNo.
55/2017.
41Section11ofSpanishCodeonCivilProcedure(Ley1/2000,de7deenero,deEnjuiciamientoCivil).
42Part19.
6(Representativepartieswithsameinterest)ofCivilProcedureRules(CPR).
Andrews(2001:251–252),Sherman(2002:401–432).
Inthemechanismrecentlyintroducedincompetitionlaw,theCompetitionAppealTribunaldecides,inacollectiveproceedingsorder,whetherthepro-cedurehastobecarriedoutintheopt-inortheopt-outsystem,Sections47A–49EofCompetitionAct1998,insertedbyPart1ofSchedule8oftheConsumerRightsAct2015.
SeeWaller(2015:21–24).
43Nagy(2010:138–143).
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts33Theinnovationoftodayisthetraditionoftomorrow.
Althoughitsrootscanbetracedbacktoequity,44theinstitutionofclassactionwasinsertedintoUSfederalprocedurallawonlyin1938.
Thisregimewasprofoundlyrevisedin1966andsub-jectedtosomeminorchangesin2003.
45ItcanbeestablishedthattheUSsystemofclassactionwasnalizedin1966,sinceitwasthe1966reformthatmadethewide-spreaduseofclassactionspossible.
46Today,thisregulationisregardedasthe"Americantradition",contrarytothecontinentaltradition.
Theclassicallitigationsystemproceedsfromtheassumptionthatthepartiestotheactionareequalbothintermsofmoneyandcapacity,haveunlimitedfreetimeandresourcestopresenttheircase.
Therealityofthe21stcenturyis,however,notthis.
Theageofmassesischaracterizedbystandardizedcontractsandstandardizedcases.
Theprojectionofthemasseconomyhasalreadyappearedinsubstantivelaw:theregimeonunfairtermsinstandardizedconsumercontractsisbasedontherecognitionofthefactthatinthemasseconomyindividualenterprisesfacemasses.
Collectiveactionsrecognizethisinprocedurallaw.
"[I]ndividuallytailoredlaw-suitsforconsumersareoftenasmuchananachronismastheconceptthatallcarsthatareputonthemarketshouldbehandcrafted(…).
[E]conomiesofscalenowdictatemassredressproceduresforconsumersprejudicedbyacommonlegalwrong.
"473.
1.
3ItIsVeryDifculttoIdentifytheMembersoftheGroupandtoProveGroupMembershipItisafrequentargumentagainstclassactionsthatinopt-outsystemsgroupmem-bersdonot(ornormallydonot)gettheirmoneyandthebenetsofopt-outactions(thatis,themoneysawarded)gotogrouprepresentatives.
TheCommission'sRec-ommendationonCollectiveRedresscontendsthat"an'opt-out'systemmaynotbeconsistentwiththecentralaimofcollectiveredress,whichistoobtaincompensationforharmsuffered,sincesuchpersonsarenotidentied,andsotheawardwillnotbedistributedtothem.
"48Theaboveassertionisbasedonafatalmisunderstanding.
Justasopt-insystems,opt-outcollectiveactionmechanismsaimtoproviderecoverytogroupmembersand,asageneralrule,theawardisnormallydistributedtogroupmembersandtheyreally44MontgomeryWard&Co.
vLanger,168F2d182,187(1948);Yeazell(1987),EizengaandDavis(2011:8–9).
45Dumain(2005:221–248)andEdward(2002:432–440).
46Seee.
g.
Pace(2008:2),EizengaandDavis(2011:16),Coffee(2017:1896),Hensler(2017:966)(Referringto1966astheyearofbirthoftheUSclassaction.
).
47Trebilcock(1976:270).
48CommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompen-satorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionLaw,p.
12.
(emphasisadded).
343MajorEuropeanObjectionsandFearsAgainst…receivethemoney.
49Althoughincertainsystems"uidrecovery"or"cypres"isavailable,50thisdoesnothavetobenecessarilyadoptedalongwiththeintroductionofcollectiveactions(thoughitisadvisable).
Obviously,itismuchsimplertoallottheawardinanopt-insystem,sinceheregroupmembersareidentiedbycomingforwardtojointheaction.
However,theawardcanbedistributedtogroupmembersalsointheopt-outsystem,ifgroupmem-bersareidentiable.
Itisaregulatorychoicewhethertheavailabilityofcollectiveactionsshouldbelimitedtocaseswheregroupmembersareclearlyidentiableandwhatdegreeof"identiability"shouldberequired.
However,innumerouscases,thecourtjudgmentcandenethegroupproperly:bywayofexample,thesubscribersofadominantcabletelevisioncompanybetween1Januaryand31December2018;orthosepersonswhohadtopayahighervehicleregistrationtax,whichprovedtobecontrarytotherulesoftheinternalmarket;orthoseEUcitizenswhohadtopayadiscriminatorytuitionfeefortheacademicyearof2018–2019.
Suchadenitionwouldmakegroupmemberseasilyidentiable.
Althoughitistruethatincertaincasesitisdifcultorevenimpossibletocreateadenitionforidentifyinggroupmembers,thiscanbeaccomplishedinnumerousothercases.
Asalegislativeoption,identiabilitycouldbemadeapre-requisiteofcollectivelitigation.
However,itwouldbeperversetoarguethatsincetheopt-outschemewouldnotworkincertaincases,duetothelackofidentiability,itshouldbeabandonedalsoincaseswhereitcouldwork.
ContrarytotheRecommendation'sassertion,incaseofopt-outcollectiveactions,thebiggesttroubleisnotthatgroupmembersarenotidentied—since,asnoted,identiabilitycanbemadeapre-requisiteofthecollectiveaction.
Animportantproblemisthatincertaincasesgroupmembersarelegallyidentiablebutproofofgroupmembershipmayfaceseriouspracticalhurdles.
Forinstance,assumethattaxidriversxprices,thusoverchargingcustomers.
51Althoughtheviolationofantitrustlawisprovenandgroupmembersarelegallyidentiable,itisassumedthatthevastmajorityofthevictimswouldnotbeabletoprovetheirmembership,sincetheyusuallydonotkeepthereceipts.
Nonetheless,evenifgroupmemberscannotturntheawardintocash,thisdoesnotnecessarilyentailthattheirshareispaidoutbythedefendant(althoughitiseasy49Asregardsclaimsadministration,seeKinsellaandWheatman(2010:273–274),KinsellaandWheatman(2012:338–348).
50SeeAlexander(2000:16),Foer(2012:349–364)("Thenormalremediesinaprivateantitrustcaseareacombinationofinjunctionsandtrebledamagesthatarepaidtothevictimorvictimsoftheanticompetitiveactivity.
Whenanaggregateamountofdamagesisestablished,theprimaryobjectiveistodistributethedamagestothosewhowereinjured.
Inantitrustclassactionlitigation,however,itisoftenimpossibleorimpracticabletocompensateallvictims.
Administrativeconcernsmayworkagainstpaymentstoindividualplaintiffs,asinthecaseofanextremelylargeclasswherethefundisnotsufcienttojustifythetransactioncostsofdistributiontoindividualclaimants.
Consequently,insomecases,thereismoneyleftoverintheformofunclaimedfunds.
Insuchcases,courtssometimesemploythedoctrineof'cypres'toputtheunclaimedfundsto'thenextbestuse,'whichmayincludeawardingfundstopublicinterestorganizationsorcharitiesforpurposesrelatedtothecase.
").
51Alexander(2000:16).
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts35toarguethatthewrongdoershouldnotkeepthewindfallofhismischief).
Collectivelitigationdoesnotnecessarilyimplycollectiveenforcement.
Althoughitissubmittedthatcollectiveactionmechanismsshouldencompasscollectiveenforcement,thereisnoindicationintheRecommendationthattheproposedcollectivemechanismwouldextendtoenforcementaswell.
Infact,itisamajorshortcomingofmostEuropeanschemesthattheyignorethatthepurposeoftheaction,asfaraspecuniaryclaimsareconcerned,isnotajudgmentbutmoney.
Finally,itissubmittedthatwhileitisnotinevitablethattheshareofnon-identiablegroupmembersispaidouttothegrouprepresentative,itwouldbereasonabletoobligewrongdoerstopaycompensationalsoforlegallyorpracti-callynon-identiablegroupmembers.
Thelawcannotleavetheenrichmentearnedthroughanillegalconductwiththewrongdoer.
Fromasocialperspective,itappearstobemorereasonabletogiveawindfalltothegrouprepresentativethantoleaveanillegalenrichmentwiththewrongdoer(itistobenotedthatthiswouldnotevenamounttoawindfall,takingintoaccountthatthegrouprepresentativedoesinvestalotintheclaim'senforcement).
Itistemptingtoarguethatthisnon-distributablemoneyshouldbespentonapublicinterestpurpose,likefundingcollectiveactions.
Itisworthyofnotethataneffectivecollectiveactionmechanismyieldsthehighestbenetsnotwhenitisusedbutwhenitisnot;collectiveactionsmaymakepracticallyunavailablecivilrecoveryareality.
Whileintheabsenceofcollectiveactionseveralrulesandrightsestablishedbythelawareregardedaspracticallynon-existent(andpracticallyunenforceable),effectivecollectivelitigationmakestheviolationoftheserulesextremelyriskyandpromptsenterprisestorespectthem.
3.
1.
4Opt-OutCollectiveActionsWouldLeadtoaLitigationBoomandWouldCreateaBlack-MailingPotentialforGroupRepresentativesPerhapsthemostpopularmisunderstandinginrespectofopt-outcollectiveactionsisthat,similarlytoUSlaw,itwouldleadtoalitigationboomandwouldenablegrouprepresentatives,whoaggregateamassofclaims,toblackmaildefendantsandtowringillegitimatesettlementsfromthem.
52Thesefearsarecompletelyunfounded.
Thereisnocausalitybetweentheopt-outsystemandtheallegedAmericanliti-gationboomandblackmailingpotential.
IntheUS,thehighnumberofclassactionsandthedefendants'inclinationtosettlearenotduetotheopt-outrulebuttotheregu-latoryandsocialenvironmentthatsurroundsthismodel.
53Namely,USlawcontainsasetofrulesthatareunrelatedtoclassactionsbutcatalyzetheiroperation.
Bywayofexample,underUSlaw,generouspunitivedamagesareavailableandcertainstatutes52Seee.
g.
Hodges(2008:131–132).
53Foradetailedpresentationofthestatisticaldata,seeNagy(2013:490–495).
363MajorEuropeanObjectionsandFearsAgainst…providefortrebledamages54;the"Americanrule"onattorney'sfeesdoesnotfollowthe"loserpays"principle(thatis,thepartiespaytheirattorneyirrespectiveoftheaction'soutcome);certainstatutes(forexampletheShermanAct,theMagnuson-MossWarrantyAct)provideforone-waycost-shifting:iftheclaimantwins,heisentitledtocompensationforhisreasonableattorney'sfeesbutthisdoesnotworktheotherwayaround;statisticsdemonstratethattheAmericansocietyismuchmorelitigiousthantheEuropean55;theoperationoflitigatorsisnormallybasedoncontin-gencyfeesandlawrmsworkaccordingtoanentrepreneurialmodel,56wherethelaw-rminvestsmoneyandworkinghoursintheaction,thus,inexchangeforanappropriateriskpremium,ittakesovertherisksoflitigationfromtheparties;nally,jurytrialsandextensivepre-trialdiscoverysmooththingsdownfortheplaintiffandreinforcethesefactors.
Takingthisintoaccount,itiseasytoseethattheallegedliti-gationboomandblack-mailingpotential(providedtheyexist)areasmuchpeculiartoindividualactionsastoclassactions.
ThesearegeneralfeaturesoftheUSsystemandnotaspeciccharacteristicoftheclassaction.
Theaboveisreinforcedbypracticalexperiments.
Theopt-outsystemisavailablein10EUMemberStatesandnoneofthesesawa"litigationboom"(notevena"litigationpop").
57Inacontinentallegalandsocialenvironment,theopt-outsys-temoperatesinacompletelydifferentmannerthanintheUS.
TheexperiencesinAustralia58andCanada59arealsoinformative.
Inthesecountries,theopt-outclassactionwasintroduced(atfederalandstatelevel)andwhileithasprovidedeffectiveremedytogroupmembers,60nolitigationboomoccurred.
61Finally,itshouldnotbedisregardedthatEuropeisnottheonlyregionoftheworldwherecollectiveactionshadtobeaccommodatedtoacivil-lawenvironment:thishappenedinanumberofLatin-Americancountries.
6254BMWofNorthAmerica,Inc.
v.
Gore,517US559,116S.
Ct.
1589(1996);CooperIndus.
v.
LeathermanTool,532US424,432,121S.
Ct.
1678,1683(2001).
55SeeGryphon(2011:567),Rodger(2011).
56Alexander(2000:12).
AlthoughattorneycommercialsareprohibitedorrestrictedinseveralEUMemberStates,recentlytheseprohibitionswereeliminatedorsoftenedinquiteoffewlegalsystems.
SeeCommissionReportonCompetitioninProfessionalServices,COM/2004/83nalmp.
14;StephenandLove(2000:987–1017).
57Nagy(2013:490–493).
58InAustralia,theinstitutionofcollectiveactionwasintroducedintofederallawin1992.
FederalCourtofAustraliaAmendmentAct1991(No.
181of1991).
SeeClarkandHarris(2001:289–320).
59SeveralprovincesofCanadaintroducedtheinstitutionofcollectiveaction,suchasBritishColumbia,ClassProceedingAct1995,S.
B.
C.
ch21(1995);Ontario,ClassProceedingAct1992,S.
O.
ch6(1992);Quebec,QuebecCivilCode,BookIX.
;Newfoundland&Labrador,ClassActionsAct,S.
N.
L.
,ch.
C-18.
1(2001)(Newfoundland&Labrador);Saskatchewan,TheClassActionsAct,S.
S.
,ch.
C-12.
01(2001)(Saskatchewan).
TheinstitutionofclassactionisalsopartoftheFederalCourtRules.
FederalCourtRules,Part5.
1,Sections334.
1-39.
60ForanempiricalanalysisonthecompensationforcedoutbyclassactionsinCanada,seePiché(2018).
61Foradetailedpresentationofthestatisticaldata,seeNagy(2013:493–495).
ForacomparativeanalysisofAustralia,Canada(OntarioandBritishColumbia)andtheUS,seeMulheron(2014).
62SeeGidi(2003:311–408),Gidi(2012:901–940).
3.
1EuropeanObjectionsAgainstClassActions:ScruplesorPretexts37AccordingtoEuropeanfears,thegrouprepresentativecancreateanaggregateofclaimsthroughbunchingavastnumberofdemandsandcanforceoutanunfairsettlementwiththedefendanteveninfrivolouscases.
63However,thisblackmailingpotentialisanillusion.
Agrouprepresentativeenforcingae1billionclaim-aggregatehasexactlythesameblackmailingpotentialastherepresentativeofae1billionindividualclaim.
IfEuropeaneyesseeablack-mailingpotentialintheUSsystem,thisisnotduetotheUSclassactionbuttothoseprinciplesandrulesofgeneralapplicationwhichcharacterizetheUSsystematlarge.
Forinstance,becauseofthe"Americanrule"onattorney'sfees,forthedefendant,asettlementisamoreattractivealternative,eveniftheplaintiff'scaseisweak,sincethedefendanthastobeartheattorney'sfees,evenifhewinsthecaseandtheplaintiff'sclaimprovestobefrivolous.
Ifthedefendantentersasettlement,hecansavetheattorney'sfees.
Furthermore,punitivedamagesandtrebledamagesmaymultiplytheaction'sexpectedcosts.
Assumethatthelegalcostsattachedtotheactionaree200,000–200,000fortheplaintiffandthedefendant,respectively;theyhavetobeartheseexpensesirrespectiveoftheoutcomeoftheaction.
Theclaim'svalueise1,000,000andtheplaintiffhasaveryweakcasewithaminuscule10%chancetowin.
Theclaimantsuesforthebreachofantitrustrules,thus,undertheShermanAct,heisentitledtotrebledamages;furthermore,asanexceptiontothegeneral"Americanrule",hecanclaimreimbursementforhisreasonableattorney'sfeesincasehewins(thatis,thereisone-waycost-shifting).
64Accordingly,(ifdisregardingcourtfees,inationandtheprocedure'slength)arationalplaintiffwoulddecidewhethertosueonthebasisofthefollowingcalculation.
Ontheexpectedcostsside,theexpensesruntoe200,000.
Theexpectedincomeistheproductoftheclaim'svalue,thereimbursementforlegalcostsandthechanceofsuccess:e320,000=(e1,000,000*3+e200,000)*10%.
Asacorollary,thebalanceofthelaw-suitispositive:e320,000e200,000=e120,000,soitisrationalfortheplaintifftosue.
Thedefendant,ontheexpensesside,alsofacesattorney'sfeesinvalueofe200,000(whicharenotrecoverable)andthereis10%chancethathewillhavetopay3*e1,000,000asdamagesande200,000asreimbursementfortheplaintiff'sreasonableattorney'sfees:(e1,000,000*3+e200,000)*10%+e200,000=e520,000.
Atthesametime,hecannotexpectanyincome,sinceevenifhewins,theonly"return"isthathedoesnothavetopaydamages(theexpectedincomeise0).
Accordingly,thedefendant'sbalanceisnegative(e520,000=e200,000+e320,000).
Thedefendant'sexpectedlossattachedtotheactionisverysignicantincomparisontotheclaim'svalue,althoughhehas90%chancetowin.
Undersuchcircumstances,thepartieswillendeavortoreachasettlement,wheretheplaintiffdoesnotacceptlessthane120,000andthedefendantisnotwillingtopaymorethane520,000.
Thepreciseamountwilldependontheparties'bargaining63CommissionCommunicationTowardsaEuropeanHorizontalFrameworkforCollectiveRedress,COM(2013)401nal,pp.
7–8.
6415USC.
§15.
383MajorEuropeanObjectionsandFearsAgainst…skills.
Itisnoteworthythatintheabovecaseitisrationalforthedefendanttopayasumthatishigherthan50%oftheclaim'svalue,whiletheplaintiffhasmerely10%chancetowin.
Ifweputtheabovecaseinacontinentallegalenvironment,itwouldnotberationalfortheplaintifftosueduetothelowchanceofsuccess.
Fortheplaintiff,theaction'sexpectedincomeise100,000(e1,000,000*10%),whilethereis90%chancethathewillhavetobearbothhisandthewinningdefendant'slegalcosts(e400,000*90%=e360,000).
Accordingly,theplaintiff'sbalanceisnegative(e100,000e360,000=e260,000);thisisduetothelackoftrebledamagesandtotheEuropeanapproachonlegalcosts(two-waycostshifting).
3.
2TheHeadspringofEuropeanTaboosandTraditionalism:PartyAutonomyandtheState'sPrerogativetoEnforcethePublicInterestInterestingly,forthemostpart,theEuropeanresistanceagainstclassactionshasbeen,ostensibly,ratherdogmaticand,sadly,lessbasedonpublicpolicyand"socialengineering"considerations.
65Theopt-outprincipleputsthetraditionalEuropeanconceptionofcivilprocedureupside-down.
Whileacivilprocedure(inmostpartsoftheworld)centersaroundtheclaimspursued,the"Copernicanturn"ofclassactionsisthat,soastosecureeffectiveenforcement,theyputtheprocedureinthecenterandorganizetheclaimsaroundit.
66Nonetheless,thisdogmaticrigidityisbackedbytheentrenchedsocialconceptthatprivatelitigationmayhavenopublicpolicyfunction,asthiscomesundertheprerogativeofthestate.
ClassactionsinterferewiththisontologicalprincipleofcivilprocedureinEurope.
Arguably,thepublicpolicyaversionagainstclassactionsgotaspeciousconstitutionallabel:partyautonomy.
IntheEuropeantradition(asinmostciviljusticesystems),civilprocedurecentersaroundtheclaimspursuedandinthestandardparadigmtheprocedureisanegligibleinconvenienceincomparisontotheclaimitself.
Thisparadigm67proceedsfromthesamplesituationwherebothpartiesareequalinrankandfortuneandhaveunlimitedtimeandresourcestolitigateand,eitherforthisreasonorbecauseofthevalueoftheclaim,theydonotgrudgethemoneyfornancingthelaw-suit.
Ontheotherhand,inclassactions,claimscenteraroundtheprocedure:theprimaryconsiderationisfeasibilityandeffectivenessandindividualclaimsareexpectedtoadaptthemselves65Concerningtheuseofcivillitigationtopursuepublicpolicygoals,seeKarlsgodt(2012:49).
66Cf.
Azar-Baud(2012:14)(Incollectiveproceedingsoneneedstosacricecertainproceduralprinciplesinordertoenableaccesstojustice.
).
67Cf.
Mazen(1987:373)("LaprocédurecivileestenEuropelargementimprégnéeparunindividu-alismeancestraletsetrouve,decefait,souventinadaptéeàunesociétédeconsommationmarquéeparl'ampleurdesrapportsdegroupeetparlamultiplicationdescontratsportantsurdefaiblesmontants.
").
3.
2TheHeadspringofEuropeanTaboosandTraditionalism…39tothis(ofcourse,withoutlosingtherighttoindividuallitigation).
The"Copernicanturn"ofclassactionsisthat,insteadoftheclaim,theyfocusontheprocedure.
TheEuropeandogmaticcriticismhasveiledaverystrongsubconsciousrepulsionagainstopt-outclassactions:itseemsthatEuropeanlegalthinkingfeelsaversiontoprivatelitigation'shavingapublicpolicyrole(orevenside-effect)andconsidersthelattertobetheexclusiveprerogativeofthestate,althoughcollectiveactionsarecloselysupervisedandcontrolledbythecourt,fromtheopeningoftheproceduretotheapprovalofasettlementandadoptionofthenaljudgment.
68ThisisinsharpcontrastwiththeAmericanconceptionoftherelationshipbetweenpublicpolicyandcivillitigation,whichstandsoutmarkedlyincaseofclassactions.
69The1966introductionofopt-outcollectiveactionswasinspiredbytheideathatcollectivelitigationonbehalfoflargegroupsofpeoplecouldeffectivelysupplementthegovernment'sregulatoryandenforcementefforts,especiallyincaseofsmallclaimswhichwouldnotgettocourtanyway.
70Furthermore,"[c]ivilrightscasesandothersuitsseekingsocialchangeortoimplementinstitutionalreformwere,inmanyways,thequintessentialtypeofclassactionenvisionedatthetimeofthe1966amendments.
"71ItisverytellingthattheresistanceofEuropeandogmatismwaslessstrongincaseswheretheopt-outprinciple'ssocialimpactwaslimitedoreveninsignicant.
Thismaysuggestthattheapprehensionabouttheprivatizationofaparcelofpub-licpolicywasanunspokenargumentagainstclassactions.
Forinstance,Directive2009/22/EC,whichconsolidatedDirective98/27/ECanditsamendments,empow-ersadministrativeagenciesandconsumerorganizationstoinstituteproceedingsinanopt-outsystemfortheinfringementoftheEU'sconsumerprotectionrules.
Cur-rently,Directive2009/22/EClists17EUconsumerprotectionUnionactsthatarestrengthenedbythepossibilityofcollectiveaction.
However,theDirectiveislimitedtoclaimsforinjunctionanddeclaratoryjudgment72;thatis,thisopt-outmechanismcanbeusedtoprotectconsumerrightsshortofmonetaryremedies.
73Accordingly,thequestionemerges:iftheopt-outsystem,notwithstandingthedogmaticaversion,maybeacceptableastonon-monetarycivilremedies,whyshoulditnotbeacceptableastomonetaryremediesTheanswermightbethatclassactionsareperceivedtobeatoolofprivatizingpublicpolicyandthisseemstobeclearlyalientoEuropeancivil-law.
AbsenttheveryspecialUSregulatoryenvironment(punitivedamages,Americanruleonattorney'sfees,contingencyfees,pre-trialdiscoveryetc.
),inEuropeclass68SeeFalla(2014).
69Cf.
ZenithRadioCorp.
v.
HazeltineResearch,Inc.
,395U.
S.
100,395U.
S.
130–131(1969)("[T]hepurposeofgivingprivatepartiestrebledamageandinjunctiveremedieswasnotmerelytoprovideprivaterelief,butwastoserveaswellthehighpurposeofenforcingtheantitrustlaws.
");RathodandVaheesan(2016:308).
70SeeKalvenandRoseneld(1941:684).
71Pace(2008).
72Article7providesthatMemberStatesarefreetogivetheseorganizations"moreextensiverightstobringactionatnationallevel.
"73SeeKoch(2001:363).
403MajorEuropeanObjectionsandFearsAgainst…actionsaresimplynotsusceptibleofplayingapolicyrolesimilarorevencompara-bletothatplayedontheothersideoftheAtlantic.
Still,itseemsthattheEuropeanreceptionhasbeimpregnatedbythisfear.
Theabovetraditionalistconsiderationsemergedundervariousconstitutionallabels.
Thesemaybeboileddowntotheconceptofpartyautonomy,whichprovedtobeoneofthemostdevastatingargumentsagainstopt-outclassactions.
Perversely,partyautonomyistreatedasavalueinitselfandisercelyprotectedevenagainsttheright-holders'interestsandpresumedwill:itisusedasanargumentagainstrep-resentationwithoutauthorizationevenincaseswhereitisempiricallyproventhatvirtuallynoneofthegroupmemberswouldbeinclinedtomakeuseofthisautonomyandgroupmemberswouldonlybenetfromtheclassaction.
Obviously,itwouldbedifculttoarguethatpartyautonomyismoredeeplyrootedinEuropethanintheUnitedStates.
Instead,itseemsthatthestiingimpactofthislegalprincipleisnotduetothecomparativelyhighersignicanceattributedtoitinEuropebuttoastrangeblendofEuropeandogmatismandtheaversionagainstprivatelitigation'spublicpolicyrole.
Accordingtotheconservativethinking,partyautonomy(therightofdisposi-tion)embracesthelibertytodecidewhetherornottoenforceaclaim,andimpliesthatifsomeonedecidestoenforceit,heshouldbethemasterofhisowncase.
74Whilecitizensarefreetowaivesomeoftheirrightsstemmingfromthislibertyortoauthorizeotherstoexercisetheirrights,thishastobebasedonactualintentinsteadofconstructiveacceptanceorpresumedauthorization.
Thisargumentiswrappedupintraditionalism(theopt-outprincipleisirreconcilablewiththeEuro-peanlegaltradition)andconstitutionalism(representationwithoutauthorizationisunconstitutional).
However,noneoftheseargumentsaresweeping(atleastnotasmuchastheyweretwodecadesago).
First,theEuropeantraditionhaschanged:currentlythereare10MemberStateswhichhaveanopt-outscheme;nottomentionthatastonon-monetaryrelief,duetoDirective2009/22/EC,MemberStateshaveageneralobligationtoprovideforanopt-outmechanisminconsumermatters.
Itwouldbedifculttoarguethatsomethingthatispracticedin10MemberStatesandisdemandedinrespectofnon-monetaryclaimsisalientotheEuropeantraditionandthinking.
Second,whiletheconceptofrepresentationwithoutauthorizationhas,attimes,metercecriticism,infact,theconstitutionalrequirementsprovedtobemanageablewhentheywereactuallytested(seeSect.
3.
1.
1).
3.
3SummaryIntheEuropeanscholarlydiscourse,resistanceagainstUSclassactionshasbeenpredominantlydogmatic(constitutionaldoctrineofpartyautonomy)but,subcon-sciously,backedbythesettledEuropeanthinkingthattheenforcementofpublicpolicyistheinalienableprerogativeofthestateandmaynotbeprivatized.
Indeed,74Cf.
Buxbaum(2014:589–590).
3.
3Summary41the"Copernicanturn"ofopt-outcollectivelitigationinterfereswiththeontologicalprinciplesofEuropeancivilprocedure:whileacivilproceduretraditionallycentersaroundtheclaim,intheUSclassactionclaimscenteraroundtheprocedure.
Europeantraditionalismhasbeenoftenwrappedupinconstitutionalparlance,buttheargumentsagainstclassactions'constitutionalconformityhavefoundnoreec-tionintheconstitutionalcase-law.
Thissuggeststhatwhilecertainlimitsdoapply,opt-outmechanismsarenotoutrightunconstitutionalandtheymaybeconstitution-allywarrantedinsmallvaluecases,whichwouldverylikelynotbebroughttocourtanyway.
Thescholarshipisrepletewithpiecessupportingtheintroductionoftheopt-outmodelinEuropeand,disregardingthemisconceivedreferencestolegaltraditionandthephobiaofforeignlegalsolutions,onecanrarelyndanyanalysisthatwouldconvincinglydemonstratethatopt-outcollectiveactionswouldleadtoalitigationboom,settlementsforcedoutbyblack-mailingandabuses.
Theallegedrepercussionsofopt-outcollectivelitigationintheUSdonotoccurwhenthisregulatorymechanismistransplantedtoaEuropeanenvironment.
Legalrulesdonotoperateinavacuumbutarepartofalegal,social,culturalandeconomicenvironment.
USlawcontainsalargesetofinstitutionsthatcatalyzetheoperationoftheopt-outclassaction.
InEurope,failingthiscatalyzingenvironment,theallegedexcessesoftheUSpracticearenottobeexpected.
ThisconclusionisunderpinnedbythelimitedEuropeanempiricalevidenceonopt-outcollectiveactionsandbytheexamplesofforeignlegalsystemsthatarecomparabletotheEuropeanregulatoryenvironmentandhaveadoptedUS-styleclassactionschemes(Australia,Canada,LatinAmerica).
Asdemonstratedabove,inclassactioncasesgrouprepresentativeshavetheverysameblack-mailingpotential(ifany)astheplaintiffinanindividualaction.
TheUSlitigationlandscapeisshapedbylegalinstitutionslikepunitiveandtrebledamages,the"Americanrule"onattorney'sfeesandone-way-costshiftingincertaincases,contingencyfees,entrepreneuriallawrmsandlitigiousattitudes.
Thisregulatoryandsocialenvironment,whichisresponsibleforwhatmanyEuropeansattributetoclassactions,iscompletelymissinginEurope.
ItseemsthattheEuropeandebatecouldnotfullyavoidthe"ice-cream-shark-attacks"fallacy(alsoknownasthe"ice-cream-murder"fallacy).
Studiesshowthattheconsumptionoficecreamandsharkattacksarepositivelycorrelated:themoreicecreamissold,themoresharkattacksoccur;andviceversa,thelessicecreamisconsumed,thelesspeopleareattackedbysharks.
IstherecorrelationbetweenthetwoYes,ofcourse.
Woulditbereasonabletodrawtheconclusionthatthereiscausa-tionandadvisepeoplenottoeatice-creamtoavoidsharkattacksWouldabstentionfromice-creammakeourlivessaferNo,ofcourse,itwouldnot.
Bothicecreamconsumptionandsharkattacksincreaseinthesummertime,whenthenumberofpeopleswimmingintheseasandoceansisuncomparablyhigherthanduringwinter,hence,thechancesofsharkattacksareobviouslyhigher.
Correlationdoesnotmeancausation.
TheallegedlinkbetweentheUSclassactionandcertainabusivepracticesisnothingmorebutanopticalillusion.
Acloserlookattheperceivedrelationshipconrmsthatthereisnotcausationbetweenthetwo,itissimplecorrelation.
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Bruylant,Bruxelles,pp681–696UdvaryS(2015)Proactionecollectiva–akomplexperlekedésamerikaieszkzei,külnsenaclassactionsszehasonlítóvizsgálataazintézménymagyarországirecepciójacéljából.
Patrocinium,BudapestWallerSW(2015)Thefallandriseoftheantitrustclassaction.
http://ssrn.
com/abstract=2641867.
Accessed20April2019YeazellSC(1987)Frommedievalgrouplitigationtothemodernclassaction.
YaleUniversityPress,NewHavenOpenAccessThischapterislicensedunderthetermsoftheCreativeCommonsAttribution4.
0InternationalLicense(http://creativecommons.
org/licenses/by/4.
0/),whichpermitsuse,sharing,adaptation,distributionandreproductioninanymediumorformat,aslongasyougiveappropriatecredittotheoriginalauthor(s)andthesource,providealinktotheCreativeCommonslicenseandindicateifchangesweremade.
Theimagesorotherthirdpartymaterialinthischapterareincludedinthechapter'sCreativeCommonslicense,unlessindicatedotherwiseinacreditlinetothematerial.
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Chapter4TransatlanticPerspectives:ComparativeLawFramingNotsurprisingly,collectiveactions'regulatorycontextsintheUSandinEuropedifferconsiderably.
USlawfeaturesalargearrayoflegalinstitutionswhichcatalyzetheoperationofclassactionsbutarecompletelymissinginEurope(e.
g.
contingencyfees,noorone-waycost-shifting,super-compensatorydamagessuchaspunitiveandtrebledamages,pre-trialdiscovery,jurytrials).
Infact,notwithstandingtheirindependentnature,theselegalconceptsarequiteoftenassociatedwithclassactions.
1Thediscoveryofthesecontextualconceptsisessentialfortworeasons.
Ontheonehand,classactionsarearealtransplantand,assuch,mayhaveaquitedifferentoperationandimpactinanewlegalenvironmentthanintheUS.
Ontheotherhand,classactionsraiseagoodnumberofregulatoryissuesthatsimplydonotemergeinthehomecountry.
Forinstance,duetothelackofcost-shifting,theallocationofliabilityfortheprevailingdefendant'slegalcostsisnotanissueinUSlaw,whileitisapivotalquestioninEurope.
Thischapter,withthepurposeofprovidingacomparativelawframing,rst,takesstockofthemajordifferencesbetweentheregulatoryandsocialenvironmentsofclassactionsonthetwosidesoftheAtlantic.
Second,itdemonstrateshow,asaconsequenceofthesedifferences,classactionsentaildivergingoutcomesintheUSandEurope.
Third,itpresentsthetrulyEuropeanissuesraisedbyclassactions,whichareunknownforAmericanlaw.
4.
1DisparateRegulatoryEnvironmentsOneofthecommonplacesofcomparativelawisthatthetransplantationoflegalconceptsisnotlikeorgantransplantation:legalinstitutionsaredeeplyrootedinthelegalsystemthatgavelifetothemandareacoherentpartoftheirlegal,socialand1SeeBlennerhassett(2016:132–133).
TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_445464TransatlanticPerspectives:ComparativeLawFramingculturalenvironment.
2Hence,whenassessingthepotentialconsequencesofintro-ducingopt-outcollectiveactionsinEurope,theveryrstquestiontobeaddressedisthedifferencesbetweentheUSclassactionandtheEuropeancollectiveactionintermsofcontext,inparticular,becauseempiricaldataclearlysuggests:thesameopt-outcollectiveactionmechanismthatburstsitsbanksintheUSmayonlybeapeacefulcreekinEurope.
Theontologicaldifferenceframingthecomparativelawanalysisliesinthefunc-tionofcollectiveactions.
IntheUS,privateenforcement(individualandcollectivealike)mayhavebothacompensatoryandapublicpolicyfunction.
Theconceptof"privateattorneygeneral"3describesthisexpressively:thelawprivatizesaparcelofpublicenforcementandusesmarketforcestofurtherpublicpolicy(whilesavingpublicresources).
Albeitthatclassactionsareanimportantelementofthisregulatorystrategy,itembracesindividualandcollectiveactionsalike.
Thekeytothisconceptisthenancialincentivesofferedbythelaw.
Forinstance,inHawaiiv.
StandardOilCo.
,theSupremeCourt,referringtothetrebledamagesavailableunderUSantitrustlaw,stressedthat"[b]yofferingpotentiallitigantstheprospectofarecoveryinthreetimestheamountoftheirdamages,Congressencouragedthesepersonstoserveas'privateattorneysgeneral.
'"4Onthecontrary,theconceptof"privateattorneygeneral"iscompletelyalientoEuropeanlaw,whereprivateenforcementisnotmeanttoreplaceorsupplementpublicenforcementandcollectiveactionsareconnedmerelytofacilitatingvictimstoacquireaneffectiveprivateremedy.
Thisimpliesthataslongasthisattitudeismaintained,EuropeancollectiveactionscannotbeexpectedtoproducethesameeffectivenessintermsofenforcementastheUSclassactionandtheirperformanceshouldbeassessedinlightofthisconsideration.
TheregulatorycomplexityofandresistanceagainstcollectiveactionsmaybetracedbacktothefactthatEuropeexper-imentswiththeimportationofamechanismthathasasubstantialpublicpolicyroletofulllapurelycompensatoryfunction.
Nonetheless,asdemonstratedbelow,USclassactions'publicpolicyfunctionismadeupofageneralsetofcontextuallegalconceptsandnottheopt-outclassactionalone.
Oneofthemostimportantdissimilaritiesisculturalandeconomicinessenceandrelatestotheroleoflawyers.
ThemajordifferencebetweenlitigatorsonthetwosidesoftheAtlanticisthat"entrepreneuriallawyering"isvirtuallymissinginEurope,5wherethelawyerisacounsel,normallypaidonanhourlyoraat-ratebasis,and2Forananalysisonthecultureofcollectivelitigation,seeStierandTzankova(2016).
3PermaLifeMufers,Inc.
v.
InternationalPartsCorp.
,392U.
S.
134,147(1968)(Fortas,J.
,concurringinresult);Strong(2012:900),Udvary(2013:71).
4405U.
S.
251,262(1972).
5SeeKarlsgodt(2012:49).
4.
1DisparateRegulatoryEnvironments47contingencyfeearrangementsarerare,6insomeMemberStatesevenprohibitedorrestricted.
7Thelawyerusuallydoesnottakeanyriskintheactionandlaw-suitsarenormallynotnanced(notevenpartially)bylawrms.
Incontrasttothis,USclassactionsarefundedbylawyersandlawrms,inexchangeforacontingencyfee.
8USlitigatorsentercontingencyfeearrangementsand,hence,takeenormousrisks.
InEurope,somejurisdictionsprohibitonlypurecontingencyfees,wheretheattor-ney'sfeeislinkedexclusivelytotheoutcomeofthecaseandtheattorneyreceivesnoremunerationincaseofloss.
Forinstance,Frenchlawexpresslyprohibitspurecontingencyfees,i.
e.
attorney'sfeesbasedexclusivelyontheoutcomeofthecase,albeitaconditionalreward,asacomplimentaryelement,maybecombinedwithaxedfee.
9AlthoughtheFrenchSupremeCourt(CourdeCassation)heldthataconditionalrewarddoesnotneedbeproportionatetothexedfeeandmayexceedthelatter,10itiswidelyacceptedthatthexedfeeelementmaynotbenegligible.
AsimilarapproachistakenbyBelgian11andRomanianlaw,12whichprohibitagree-mentsonfeesthatareexclusivelylinkedtotheoutcomeofthecasebutpermitthestipulationofacomplementaryfeeconditionalontheoutcome.
Somejurisdictionsaremorestringentandprohibitallagreementswheretheattor-ney'sfeeissomehow,evenpartially,linkedtotheoutcomeofthecase.
InGermany,contingencyfeeshavebeentraditionallyprohibited.
TheGermanFederalConsti-tutionalCourt(Bundesverfassungsgericht)heldadecadeagothatthecategoricalprohibitionofcontingencyfeearrangementsisunconstitutionalbutitwasquicktoaddthatthisdeciencycanbeeasilyremovedifcreatinganexceptionforcaseswhereafee(hourlyfeeoratrate)woulddetertheplaintifffrompursuinghisrightbyreasonofhisnancialcircumstances.
13Asacorollary,Germanlawwasamendedtomakeitpossibleforthepartiestoagreetocontingencyfeesbutonlyincaseswheretheclient,becauseofhiseconomiccircumstances,wouldotherwisenotpursuehis6Foracomparativeoverview,seee.
g.
Chieu(2010:148),Russell(2010:173).
7SeeGrace(2006:287–88),Waelbroecketal.
(2004:93–94,116–17),Leskinen(2011:98–105).
8SeeHodges(2009:42)("[T]heclaimanthasnonancialriskbuthassignicantincentivetotakeaction.
Inparticular,anyintermediaryrepresentingtheclaimantandfundingthelitigationhassignicantincentives.
");Karlsgodt(2012:53).
9Section10ofLoin°71-1130du31décembre1971portantréformedecertainesprofessionsjudiciairesetjuridiques,versionconsolidéeau12mars2017.
10CourdeCassation,Chambrecivile1,du10juillet1995,93-20.
290.
11Section446teroftheJudicialCode(Codejudiciaire).
12Section130ofStatutulprofesieideavocat,AdoptatprinHotarreaConsiliuluiU.
N.
B.
R.
nr.
64/2011privindadoptareaStatutuluiprofesieideavocat(M.
Of.
nr.
898din19decembrie2011).
SeeICCJ.
Decizianr.
2131/2013.
Civil.
Constatarenulitateact.
Recurs.
13BeschlussdesErstenSenatsvom12.
Dezember2006.
1BvR2576/04.
484TransatlanticPerspectives:ComparativeLawFramingclaim.
14Nonetheless,asamatterofpractice,contingencyfeearrangementsarestillrareinGermany.
Notsurprisingly,theCodeofConductforEuropeanLawyersoftheCouncilofBarsandLawSocietiesofEurope(CCBE),15inprincipal,pronouncescontingencyfeeagreements(pactumdequotalitis)unethical,unlessit"isinaccordancewithanofciallyapprovedfeescaleorunderthecontrolofcompetentauthorityhavingjurisdictionoverthelawyer.
"16Interestingly,inSpain,theethicalprohibitionofcontingencyfeearrangementswasquashedin2008:theSpanishSupremeCourtconsideredtheSpanishBarAsso-ciation'sbanoncontingencyfeesasrestrictiveofcompetitionandabolishedthem.
17However,contingencyfeearrangementsare,asamatterofpractice,rare.
Whatevertheprecisenationalrulesandthespeciclimitsare,mostimportantly,contingencyfeesarestillnotgenerallyacceptedinEuropeandthereisnomarketprovidinglitigationservicesonthisbasis.
Inthesamevein,inmostEuropeancountries,activeclient-acquiringandlawyeradvertisementsarebannedorheavilyrestricted,18while,intheUS,casesareoftennotclient-butlawyer-driven19andthisisallthemoretrueinclassactions.
20Furthermore,notonlylawyersbutalsoclientsaredifferent.
ThestatisticaldatasuggeststhattheAmericansocietyismuchmorelitigiousthantheEuropean.
21Inshort,intheUS,thereisanindustrythatassumestherisksoflitigationinexchangeforanappropriateriskpremium.
Ontheotherhand,inEuropethereisno14Rechtsanwaltsvergütungsgesetzvom5.
Mai2004(BGBl.
IS.
718,788),lastamendedthroughSection13ofGesetzvom21.
November2016(BGBl.
IS.
2591),GesetzüberdieVergütungderRechtsanwltinnenundRechtsanwlte(Rechtsanwaltsvergütungsgesetz—RVG),§4aErfolgshono-rar:"Quotalitis(Section49b(2),rstsentenceofthe[German]FederalLawyers'Act(Bundesrecht-sanwaltsordnung—BRAO))maybeagreedonlyforanindividualcaseandonlyiftheclient,uponreasonableconsideration,wouldbedeterredfromtakinglegalproceedingswithouttheagreementofquotalitisonaccountofhiseconomicsituation.
Incourtproceedings,itmaybeagreedthatincaseoffailure,noremuneration,oraloweramountthanthestatutoryremuneration,istobepaidifitisagreedthatanappropriatesupplementistobepaidonthestatutoryremunerationincaseofsuccess.
"BundesrechtsanwaltsordnunginderimBundesgesetzblattTeilIII,Gliederungsnummer303-8,verffentlichtenbereinigtenFassung,lastamendedthroughSection3ofGesetzvom19.
Februar2016(BGBl.
IS.
254),§49b(2).
15https://www.
ccbe.
eu/NTCdocument/EN_CCBE_CoCpdf1_1382973057.
pdf.
Accessed20April2019.
16Section3.
3.
Interestingly,in2008,theSpanishSupremeCourtfoundtheSpanishBarAssocia-tion'sbanoncontingencyfeesrestrictiveofcompetitionandquashedit.
17SentenciadelTribunalSupremo,SaladeloContencioso-Administrativo,de4noviembre2008JUR\2009\2800,RecursodeCasación5837/2005.
18WhilelawyeradvertisingisinterdictedorrestrictedinseveralEUMemberStates,inthelastperiodthesehavebeeneliminatedinseverallegalsystems.
SeeCommunicationfromtheCommission:ReportonCompetitioninProfessionalServices,COM(2004)83nal,14;StephenandLove(2000:987–1017).
19SeeCalabresiandSchwartz(2011:178–79)("Thebusinesscasesarealmostentirelylawyer-driven.
").
20SeeAlexander(2000:12).
21SeeGryphon(2011:1).
4.
1DisparateRegulatoryEnvironments49establishedindustrytoassumethelitigationrisks,partiallybecauseEuropeanlegalsystemsskimplitigatorsinnancialrewardsandincentives.
Theshiftingoflegalcostsisapivotalquestionofclassactions.
22Accordingtothe"Americanrule",eachpartybearshisowncostsandattorney'sfeescannotbeshifted.
23Theplaintiffdoesnotruntheriskofpayingthedefendant'sattorneyiflosingtheaction;andlikewise,thedefendantdoesnothavetoreimbursethewinningplaintiffforhislegalcosts.
ItistruethatUSlawcontainsplentifulexceptionsprovidingfortheshiftingofreasonableattorney'sfees,buttheserulesmainlyenableone-waycostsshiftingfromtheprevailingplaintifftothelosingdefendant.
24Thoughtheprevailingdefendantmayrequestthecourttoshifttheattorney'sfeesontotheunsuccessfulplaintiff,thisislimitedtoexceptionalcases,suchasfrivolouslaw-suitswheretheplaintiffactedinbadfaith.
25Inotherwords,intheUS,asamatterofpractice,theplaintiffdoesnotruntheriskofbecomingliablefortheprevailingdefendant'sattorney'sfees.
Incontrasttothis,asmostpartsoftheworld,Europeanjurisdictionstraditionallyfollowtheprincipleoftwo-waycost-shifting,26albeitshiftablelegalcostsareoftenlimitedandrarelycoveralltheexpenses.
InEurope,"thewinnertakesitall"andtheloser,atleasttheoretically,paysallthelegalcoststhatwereinducedbytheproceed-ings,irrespectiveofwhethertheseemergedontheplaintiff'soronthedefendant'sside.
27Ofcourse,cost-shiftingisneverperfectandneverall-embracing;butthisistheprinciple.
Somejurisdictionscontentthemselveswithlimitingtheshiftablesumtoreasonablelegalcosts.
InHungarianlaw,theprincipleisfullreimbursementanditisatthecourt'sdiscretionwhetherandtowhatextentitshiftstheprevailingparty'sattorney'sfees.
Thelosingpartyisliableforallthenecessarylegalcoststhathaveacausallinktotheclaim'sjudicialenforcement,irrespectiveofwhethertheyemerged22Waelbroecketal.
(2004:92–95).
ForalawandeconomicsanalysisoftheAmericanruleandtheEuropeantwo-waycostshiftingprinciple,seeCarbonaraandParisi(2012).
23SeeRule54(d)oftheFederalRulesofCivilProcedure.
AlyeskaPipelineServiceCo.
v.
WildernessSociety,421US240(1975).
24Seee.
g.
ShermanAct,15USC.
§4304(a);FairLaborStandardsAct,29USC.
§216;Magnu-son–MossWarrantyAct,15USC.
§2310(d)(2).
25SeeRule11oftheFederalRulesofCivilProcedure;RoadwayExpress,Inc.
v.
Piper,447US752,(1980);Hallv.
Cole,412US1,5(1973);ShermanAct,15USC.
§4304(a)(2).
26AnexceptionthatconrmstherulemaybefoundintheBulgarianadministrativecompetitionprocedure.
Section69(2)oftheBulgarianActonprotectionofcompetitionprovidesforone-waycost-shifting.
"WheretheCommission[onProtectionofCompetition]issuesadecisionestablishinganinfringementunderthisLaw,theCommissionshallordertheinfringertopaythecostsoftheproceedings,ifsorequestedbytheotherparty.
Ifnoinfringementisestablished,thecostsshallbebornebythepartieswhoincurredthem.
"TheActwaspromulgatedintheStateGazette'sIssue102of28November2008.
ForanEnglishtranslationseehttp://www.
wipo.
int/wipolex/en/text.
jsple_id=238274.
Accessedon20April2019.
27Waelbroecketal.
(2004:92–95).
ForalawandeconomicsanalysisoftheAmericanandtheEnglish(orcontinental)rule,seeCarbonaraandParisi(2012).
504TransatlanticPerspectives:ComparativeLawFramingbeforeorduringthelaw-suit.
28Theprevailingpartymayclaimreimbursementfortheattorney'sfeesstipulatedinthemandateagreement.
However,thecourtmayreducetheshiftableattorney'sfees,ifitisnotproportionatetotheclaim'svalueortheactualworkdone.
29Likewise,inBulgaria,thelosingpartymyseekreductionoftheattorney'sfeesclaimedbytheprevailingparty,ifitisexorbitanttakingintoaccountthevalueandcomplexityofthecase.
30Germanlawalsoprovidesfortheshiftingofreasonablelegalcostsonthelosingparty,31however,therecoverableattorney'sfeesiscappedbyastatutoryschedule.
32InFrenchlaw,attorney'sfees,whichnormallymakeuptheoverwhelmingmajorityoftheexpenses,areshiftedonthelosingpartytotheextentdeterminedbythecourt,whichhastoallocatetheminanequitablemannerandtakingintoaccountthelosingparty'snancialsituation.
33The"Americanrule"combinedwiththewide-spreaduseofcontingencyfeearrangementsandtheentrepreneuriallawrmmodelcreatesaverypeculiarcom-poundthatliesattheheartoftheAmericanlitigationsystem.
Theplaintiffisverymotivatedtolitigate:hefacesnorisk;allhazardsaredevolveduponhislawyer(con-tingencyfee)andthedefendant("Americanrule").
34Ontheotherhand,inEurope,theplaintiff,normally,cannottransfertherisksrelatedtohisownlegalrepresentationontohislawyer,whoworksonthebasisofanhourlyrate,andhastocompensatethedefendantforhislegalcosts,ifthecourtdecidesagainsttheplaintiff.
Finally,USawardsaremuchmoregenerousforplaintiffswhosustaineddamagesduetoperniciousormaliciouspractices.
Punitive35andtrebledamagesand"painandsuffering"awardsaremagnetsthatarenon-existentinEurope.
Theavailabilityofsuper-compensatoryremediesandintenselygenerous"painandsuffering"awardsmaymakelitigationmoreattractiveincaseswherethebalanceofthelitigation'sexpectedvalueandexpectedcostsisnegative.
28Sections80and83(1)ofActCXXXof2016ontheCivilProcedure(2016.
éviCXXX.
trvényapolgáriperrendtartásról).
29Section2ofMinistryofJusticeDecreenr32of22August2003ontheattorney'scoststhatmaybeestablishedinjudicialproceedings(32/2003.
(VIII.
22.
)IMrendeletabíróságieljárásbanmegállapíthatóügyvédikltségekrol).
30Section78(5)BulgarianCodeofCivilProcedure,foranEnglishversionofthestatutorytext,seehttps://kenarova.
com/law/Code%20of%20Civil%20Procedure.
pdf.
Accessed20April2019.
31Section91oftheGermanCodeofCivilProcedure(Zivilprozessordnung),ZivilprozessordnunginderFassungderBekanntmachungvom5.
Dezember2005(BGBl.
IS.
3202;2006IS.
431;2007IS.
1781),lastamendedthroughSectionoftheGesetzvom21.
November2016(BGBl.
IS.
2591).
32Rechtsanwaltsvergütungsgesetzvom5.
Mai2004(BGBl.
IS.
718,788),lastamendedthroughSection13ofGesetzvom21.
November2016(BGBl.
IS.
2591).
33Sections695-700oftheFrenchCodeofCivilProcedure(Codedelaprocédurecivile).
Foradetailedanalysis,seeGjidara-Decaix(2010:325).
34SeeHodges(2009:42).
35Black'sLawDictionary416-19(8thed.
2004)("damages"and"punitivedamages");BMWofN.
Am.
,Inc.
v.
Gore,517US559(1996);CooperIndus.
v.
LeathermanToolGrp.
,Inc.
,532US424,432(2001).
Ontheinteractionandcombinationofpunitivedamagesandclassactionsfromalawandeconomicsperspective,seeParisiandCenini(2008).
4.
1DisparateRegulatoryEnvironments51IntheUS,punitivedamagesaregenerallyavailableinallbutvestates36andtrebledamagesareprovidedforinvariousstateandfederalstatutes.
Whilesurveyssuggestthatpunitivedamagesareawardedinfrequently37and"arenottypicallyverylarge",38theyareanintegralpartoftheUSjusticesystem.
Thepurposeofpunitivedamagesis"topunish(…)[thewrongdoer]forhisoutrageousconductandtodeterhimandotherslikehimfromsimilarconductinthefuture.
"39Theamountofdamagesorientatestothegravityofthemischief("thedefendant'sact,thenatureandextentoftheharmtotheplaintiffthatthedefendantcausedorintendedtocauseandthewealthofthedefendant")40andnottotheweightoftheharm.
Ontheotherhand,incontinentalEurope,thesegoalsandthisrationaleare,inprinciple,reservedforcriminallawanddamagesaremeant(only)tocompensatetheinjuredpartyforthelosssufferedandmayundernocircumstanceentailhisenrich-ment:thepurposeofdamagesistorestoretheinitialstatus(inintegrumrestitutio),thatis,tocompensate;theyarenotdestinedtopunishthewrongdoer,althoughtheymaycertainlyhavesuchaside-effect.
41ThePrinciplesofEuropeanTortLaw,whicharebotharestatementofthecommoncoreofEuropeantortlawandalsoaproposalforacomprehensivesystemoftortiousliability,stressthecompensatorypurposeofdamagesandtreattheirdeterrenteffectsasawelcomeby-product.
Damagesareamoneypaymenttocompensatethevictim,thatistosay,torestorehim,sofarasmoneycan,tothepositionhewouldhavebeeninifthewrongcomplainedofhadnotbeencommitted.
Damagesalsoservetheaimofpreventingharm.
42Interestingly,whileexemplarydamagesare,theoretically,availableunderEnglishcommonlaw,inRookesvBarnard,43theEnglishSupremeCourt(atthattime:HouseofLords)almostfullyeviratedthelegaldoctrinethatunderlaytheremarkablecon-ceptualdevelopmentintheUSresultinginthecurrentpracticeofpunitiveawards.
Itheldthatexemplarydamages,asidefromthecasewhentheyareprovidedforbyastatute,canbeawardedonlyinmattersinvolving"oppressive,arbitraryoruncon-stitutionalactionbytheservantsofthegovernment"andwhen"theDefendant'sconducthasbeencalculatedbyhimtomakeaprotforhimselfwhichmaywellexceedthecompensationpayabletotheplaintiff.
"4436Sebok(2009:155).
SeeRustada(2005:1297).
37Surveyssuggestthatpunitivedamageswereawardedin2–9%ofallcaseswhereplaintiffswon.
Sebok(2007:964–965).
38Sebok(2009:156–158).
39RestatementofTorts,Second,§908(emphasisadded).
40Id.
41Seee.
g.
BGH4June1992,BGHZ118,312(Bundesgerichtshof).
Quotationsrefertothetransla-tioninWegenandSherer(1993)1320("[O]ften,thesoleappropriateaimofthecivilactiontakeninresponsetoanillegalactistocompensatefortheeffectsofthatactonthenancialcircumstancesofthepartiesdirectlyconcerned");Isidro(2009)246.
42PrinciplesofEuropeanTortLaw.
TextandCommentary.
EuropeanGrouponTortLaw.
2009,Article10:101(Natureandpurposeofdamages).
43RookesvBarnard[1964]1AllEnglandLawReports(AllER)367.
44OnexemplarydamagesinEnglishlaw,seeWilcox(2009:7–53).
524TransatlanticPerspectives:ComparativeLawFramingFinally,itisworthbrieyhighlightingthatthedifferencesbetweentheAmericanandEuropeanpatternsofcivilprocedurealsohaveasignicantbutlessquantiableeffectontheoperationofcollectivelitigation:plaintiff-friendlyUSdiscoveryrulessignicantlycontributetothesuccessofclassactions,whilethelackofthemmaychokeoffcollectiveactionsinEurope.
Jurytrials,aschemealmostneverusedinEurope,certainlyaddtotheuncertaintyofoutcomesbutprobablytothedetrimentofthedefendants.
Theabovemappingofthecontextualdifferencespointsoutthatinacivil-lawenvironmentcollectiveactionsobviouslydonotworkinthesamewayastheydointheUS.
Thisalsoimpliesthatwhenevaluatingopt-outcollectiveactionsfromaEuropeanperspective,onehastodistinguishitseffectsandoperationfromthoseofthecontextuallegaldoctrinesofUSlaw.
Thesearenotspecictoclassactionsandgovernindividuallitigationtoo.
45Furthermore,becauseofthedifferentregulatoryenvironment,inEurope,collectiveactionsraisevariousnovelquestionsthatsimplydonotemergeintheUS.
4.
2WhyShouldEuropeansNotFeartheAmericanCowboyDivergingEffectsofDisparateRegulatoryEnvironmentsThemajorcriticismagainsttheUSclassactionisthat,throughaggregationofindivid-ualclaims,itcreatesabig,centrallyconductedgiantclaimthatmakesthedefendantssettleeveniftheclaimisunfounded(blackmailingpotential).
46"Blackmailsettle-ments"are"settlementsinducedbyasmallprobabilityofanimmensejudgmentinaclassaction.
"47Nonetheless,boththeoreticalandempiricalargumentssuggestthatthisaspectofUSclassactionswouldnotemergeinaEuropeanenvironment.
4845NeumannandMagnusson(2011:157),Nagy(2013:482–485).
46SeeEbbing(2004:39),Weinstein(1997:834),CalabresiandSchwartz(2011:175),Posner(1973:399,2001:925),Delatre(2011:53).
SeealsoInreRhone-PoulencRorer,Inc.
,51F.
3d1293,1299–1300(7thCir.
1995),cert.
denied116S.
Ct.
184(1995);Westv.
PrudentialSecs.
,Inc.
,282F.
3d935,937(7thCir.
2002).
47InreRhone-Poulenc,51F.
3d1293,1298(1995),citingFriendly(1973:120).
48SeeHodges(2010:374)("ThecrucialfactthatlegislatorsandcommentatorsfailedtoobservewasthattheAmericanlegalandconstitutionalsystemoperatesonamodelthatisfundamentallydifferentfromtheEuropeansystems,inthatitplacesconsiderablerelianceonprivateenforcementasasubstituteforpublicenforcement.
TheresultisthattheAmericanandEuropeansystemsareincomparableinmanyrespects.
").
Smithka(2009:189–190).
Unfortunately,itisusuallytakenasgranted,withoutanyempiricalevidence,thatopt-outcollectiveproceedings,bythemselves,generateexcesses.
SeeDelatre(2011:38),Buchner(2015:51–57).
Forthedemythologizationoftheclaimthatthird-partynancingofclassactionsentailsfrivolouslitigationintheUS,seeHensler(2014).
4.
2WhyShouldEuropeansNotFeartheAmerican…53Ithastobenotedthattheeffectivenessandwidespreaduseofcollectivelitigationandthepotentialforabuseandadverseeffectsareinverselyproportionaltoeachother:theengineofUSclassactionsistheriskpremiumthegrouprepresentativeisafforded,whiletheriskpremiummayincreasethepotentialforabuseandadverseeffects.
ThisissuewillbeaddressedinSect.
4.
3.
ItissubmittedthattheefcientcauseoftheperceivedblackmailingpotentialofUSclassactionsisthat,amongothers,duetothe"Americanrule"andtheavailabilityofsuper-compensatorydamages,thereisastrikingimbalance(tothedefendant'sdetriment)betweenthelitigation'sexpectedvalueandexpectedcostsand,hence,itisrationalforthedefendanttosettleeveniftheclaimisgrosslyunfounded.
Namely,duetothe"Americanrule"(i.
e.
eachpartybearshisownlegalcosts),thelaw-suitunavoidablycausesseriouslossestothedefendant,irrespectiveofwhetherhewinsthecaseornot.
Thisistoppedbytheavailabilityofsuper-compensatorydamages.
Thedivergingeffectsoftheabovedisparateregulatoryenvironmentsmaybebestshownthroughanumericaldemonstration.
Ithastobestressedthatthesecalculationsarevalidastobothindividualandcollectiveclaims.
Theonlydifferencebetweencollectivelitigationandindividualactionsisthattheformeramalgamatesdifferentclaims.
Thatis,thedivergingeffectsofthedisparateregulatoryenvironmentsworkirrespectiveofwhetheritisanindividualoracollectiveaction.
Thisconrmsthattheallegedexcessesofclassactionsarenotduetotheopt-outruleitselfbuttoitsregulatoryenvironment.
49Hence,itseemstobeunconvincingthattheabovephenomenonisproblematicincaseofcollectiveactionsbutnotincaseofindividuallitigation.
ThecalculationinSect.
3.
1.
4.
demonstrateswellhowthelegalinstitutionssur-roundingUSclassactionstiltthebalanceintheplaintiff'sfavor(independentofwhetheritisanindividualoracollectiveplaintiff).
Recallthatintheantitrustcaseusedforthepurposeoftheforegoingdemonstrationtheplaintiffhadaclaiminvalueof$1,000,000,whilelegalcostswere$200,000200,000fortheplaintiffandthedefendant;theplaintiff'schancetoprevailwas10%.
BecauseitwasanantitrustcasecomingundertheShermanAct,trebledamageswereavailable50andtheplain-tiffbenettedfromone-waycostshifting(reimbursementforreasonableattorney'sfees).
Insuchanextremelyweakcase,itisreasonablefortheplaintifftosueandforthedefendanttosettle;whatismore,althoughtheplaintiffhasonly10%chancetowin,thedefendantmayreasonablyacceptasettlementofmorethan50%oftheclaim'svalue.
Areasonableplaintiff'sdecisiononwhetherornottosuewouldrestonthefollowingcalculation.
Theplaintiff'scostsare$200,000.
Theexpectedvalueofthelaw-suitismadeupoftwocomponents.
First,theprincipalclaimwhichamountsto$1,000,000andhastobetripledduetothetrebledamagesrule($3,000,000).
49Nagy(2013:482–495).
50Thoughstatutoryprovisionsprescribingtrebledamagesarerelativelyrareandpunitivedamagesclaimsaremorecommon,trebledamagesareusedforthepurposeofcalculation,asincaseofpunitivedamagesoutcomesarelesspredictable.
544TransatlanticPerspectives:ComparativeLawFramingSecond,theplaintiffmayexpectreimbursementforhisreasonableattorney'sfeeswhichamountto$200,000.
Thatis,ifhewins,theplaintiffgets$3,200,000,however,bothitemsofincomemayoccurwithaprobabilityof10%.
Accordingly,theexpectedvalueis$320,000=($1.
000.
000*3+$200.
000)*10%,andthebalancebetweentheplaintiff'scostsandtheexpectedvalueis$+120,000=$320,000$200,000.
Inotherwords,thebalanceispositive,itisreasonablefortheplaintifftosueandtoacceptasettlementofferhigherthan$120,000.
Thedefendant'ssideistheinverseoftheabovecalculus,but,contrarytotheplaintiff'ssituation,thebalanceoflitigationisalwaysnegative:thedefendanthastoinevitablybearthelegalcosts,thesecannotbeshiftedontheplaintiffevenifthelatterlosesthecase,whilethedefendantcannotexpectanyincomeintheeventhewins.
Furthermore,thedefendantalsorunstheriskoflosingthecase,eveniftheprobabilityofthisisrathersmall.
Asacorollary,thedefendanthasnoexpectedvalue:thedefendantmayexpectnoreimbursementforhisreasonableattorney'sfees.
Theexpectedcostsaremadeupofthefollowingtwoitems.
First,thedefendantwillincurlegalexpensesinvalueof$200,000.
Second,thereisa10%probabilitythatthedefendanthastopaytrebledamagestotheplaintiffinvalueof$3,000,000andreimbursementfortheplaintiff'sreasonableattorney'sfeesinvalueof$200,000.
Altogether,thedefendant'sbalanceis$520,000=$200.
000+($1,000,000*3+$200,000)*10%.
Inotherwords,thebalanceisnegative,itisreasonableforthedefendanttosettleandtoacceptasettlementofferlowerthan$520,000,althoughtheplaintiffhasonly10%chancetoprevailastoa$1,000,000claim.
Ifthepartiesactreasonably,theyshouldsettlethecasebetween$120,000and$520,000.
Thesettlementvaluewilldependontheirbargainingskillsandtactics.
LetusseehowtheabovecasewouldworkinaEuropeanlegalenvironment.
Here,itwouldnotbereasonablefortheplaintifftosue.
Theplaintiff'sexpectedvalueis10%oftheprincipalclaim:$100,000=$1,000,000*10%.
Hisexpectedcostsaremadeupofthelegalcostsofbothparties:ifheloses,hewillbeliableforallthelegalcosts:$400,000=2*$200,000;ifhewins,atleasttheoretically,hewillincurnolegalcostsastheexpensesadvancedbyhimwillbereimbursedbythelosingdefendant.
Takingintoaccountthathehas90%chancetolose,theexpectedcostsare$360,000=$400,000*90%.
Accordingly,theplaintiff'sbalanceis$260,000=$100,000$360,000.
Inotherwords,thebalanceisnegativeand,hence,itisnotreasonablefortheplaintifftosue.
Theabovecalculationsdemonstratewellthat,asnotedabove,theperceivedexcessesofclassactions(e.
g.
black-mailingpotential,forcedsettlements,litiga-tioninextremelyweakcases)are,infact,notduetotheopt-outclassactionitselfbuttothesurroundingUSregulatoryenvironment,representedbydoctrinesliketrebledamages,theAmericanruleandone-waycostshifting.
Accordingly,thesedivergingeffectsemergeirrespectiveofwhetheritisanindividualoracollectiveactionandarenotconcomitantwiththeopt-outclassactionitself.
4.
2WhyShouldEuropeansNotFeartheAmerican…55Interestingly,andperversely,theAmericanrulemakesthedefendant'sbalanceinacasewithaprobabilityofplaintiffsuccesslowerthan50%comparativelyworseandthedefendantcomparativelymoreinclinedtosettlethaninacasewithaprobabilityofplaintiffsuccessover50%.
Belowa50%likelihoodofplaintiffsuccess,intheUSthedefendantwillhaveagreaterincentivetosettlethaninEurope,whileoverthisthreshold,aUSdefendantiscomparativelylesslikelytosettlethantheEuropeandefendant.
Thereasonbehindthisisthenon-shiftabilityoflegalcosts.
Assume,forthesakeofsimplicity,thatthetwosideshavelegalcostsofthesamevalue.
The"Americanrule"makesthedefendantbear50%oftheoveralllegalcostsevenincaseswheretheplaintiff'sprobabilityofsuccessislessthan50%and,hence,inEurope,theexpectedlegalcostswouldbebelow50%.
Likewise,the"Americanrule"makesthedefendantbear50%oftheproceedings'overalllegalcosts(butnotmore)alsoincaseswheretheplaintiff'sprobabilityofsuccessismorethan50%and,hence,inEurope,theexpectedlegalcoststobebornebythedefendantwouldbeover50%.
Accordingly,the"Americanrule"incitesdefendantstosettleagainstlesssubstantiatedclaimsmorethanthe"loserpays"rule,whileitincitesthemcomparativelylessintheeventtheplaintiffhasaverygoodcase.
Fortunately,theabovetheoreticalanalysisisnotleftwithoutanempiricalcrutch.
Therearenumerousopt-outsystemsinEurope:perhapssurprisingly,representationwithoutapowerofattorneyisneitherbeyondexample,norexceptional.
51Asshownbelow,theavailablestatisticaldatareinforcetheaboveanalysisandshowthatinEuropeopt-outsystemsdonotproducetheeffectstheytriggerintheUS.
Furthermore,AustraliaandCanadaintroducedUS-styleclassactions,whiletheirlegalsystemsdivergeinseveralrelevantaspectsfromtheUSregulatoryenvironmentandareinlinewiththeprinciplesprevailinginEurope.
Accordingly,theempiricalexperimentsofthesecountriesmayprovidesomeguidance.
51SeeDelatre(2011:38)("[I]tisimpossibletoreadilyexcludeamodelofcollectiveredressonthegroundthatitwouldnotbeconsistentwiththeEuropeanexperienceonthetopic.
EssentiallyeverymodelofcollectivelitigationmaybefoundinEurope,andthesomewhatcontroversialopt-outclassactiondoesnotconstituteanexception.
").
564TransatlanticPerspectives:ComparativeLawFramingOpt-outgroupproceedingsareavailableinBelgium,52Bulgaria,53Denmark,54France,55Greece,56Hungary,57Portugal,58Slovenia,5952TheBelgiansystemleavesittothejudgetodecidewhethertheactionshouldbecarriedoutintheopt-inortheopt-outscheme.
LawInsertingTitle2on"CollectiveCompensationAction"inBookXVII"SpecialJurisdictionalProcedures"oftheCodeofEconomicLaw,28March2014,MoniteurBelge(M.
B.
)(OfcialGazetteofBelgium(29March2014)(Loiportantinsertiond'untitre2Del'actionenréparationcollectiveaulivreXVIIProcéduresjuridictionnellesparticulièresduCodededroitéconomiqueetportantinsertiondesdénitionspropresaulivreXVIIdanslelivre1erduCodededroitéconomique)andSectionXVII.
38inconjunctionwithSectionI.
21oftheBelgianCodeofEconomicLaw.
53Chapter33,Sections379-388oftheBulgarianCodeofCivilProcedure,foranEnglishversionofthestatutorytext,seehttps://kenarova.
com/law/Code%20of%20Civil%20Procedure.
pdf.
Accessed20April2019.
SeeKatzarskyandGeorgiev(2012:64).
54Sections254a-254eoftheAdministrationofJusticeAct.
55InFrance,defactoopt-outclassactionswererstintroducedintheeldofconsumerprotectionin2014,Loin°2014-344du17mars2014relativeàlaconsommationetDécr.
n°2014-1081du24sept.
2014relatifàl'actiondegroupeenmatièredeconsommation,followedbythehealthcaresectorinJanuary2016,Loin°2016-41du26janv.
2016demodernisationdenotresystèmedesantéetDécr.
n°2016-1249du26sept.
2016relatifàl'actiondegroupeenmatièredesanté.
InNovember2016,ageneralframeworkwascreatedinFranceforgroupactions.
Loin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
Thenewregimeextendedthepurviewofthemechanismtodiscrimination,environmentalandpersonaldataandhealthcarematters,insertingSections826-2-826-24intotheFrenchCodeofCivilProcedure.
56Articles10(16)-(29)ofLaw2251/1994onConsumers'Protection.
ForanEnglishtranslation,seehttps://www.
eccgreece.
gr/wp-content/uploads/2015/07/N2251-1994-enc2007-en1.
pdf.
57Section92ofHungarianCompetitionAct(1996.
éviLVII.
trvényatisztességtelenpiacimaga-tartásésaversenykorlátozástilalmáról);Sections38-38/AofHungarianConsumerProtectionAct(ActCLVof1997)(1997.
éviCLV.
trvényafogyasztóvédelemrol);Sections580-591ofthenewHungarianCodeofCivilProcedureeffectiveasfrom1January2018(ActCXXXof2016ontheCodeofCivilProcedure,inHungarian:2016.
éviCXXX.
trvényapolgáriperrendtartásról).
58Law83/95ontheAcoPopular.
SeeRossiandFerro(2013:46–64),Ferro(2015:299–300).
59LawonCollectiveActions(Zakonokolektivnihtobah—ZkolT),OfcialJournaloftheRepublicofSloveniaNo.
55/2017.
FortheEnglishversionofthestatutorytext,seehttp://www.
pisrs.
si/Pis.
web/pregledPredpisaid=ZAKO7399.
Accessed20April2019.
4.
2WhyShouldEuropeansNotFeartheAmerican…57Spain,60andtheUnitedKingdom61withouthavingproducedanylitigationboom.
Section5.
1givesanaccountofthestatisticsofEuropeanclassactionsintheseMemberStatesanddemonstratesthatthesesystemsbroughtaboutnolitigationboomand,duetothelackofappropriatenancialincentives,arenotparticularyeffectiveorwide-spreadanddonotevencomparetotheUSclassactionintermsofsignicance.
SinceEuropeanempiricalexperiencesareratherlimitedintermsofterritorialrep-resentationandtime,itisworthtakingalookatsystemsoutsidetheEUthatadoptedtheUS-styleclassactionbuthavearegulatoryenvironmentthatisinsomerelevantaspectsdifferentfromtheUS.
AustraliaandseveralprovincesofCanadaadoptedUS-styleclassactionlegislationandinserteditintoaregulatorycontextwhereentrepreneuriallaw-rms,contingencyfeearrangementsandjurytrials,thoughde-nitelyexistent,arelessrelevant,theallocationoflegalcostsis,asageneralprinciple,governedbythe"loserpays"rule,andtheavailabilityofsuper-compensatorydam-agesis,incomparisontotheUS,highlyrestricted.
62Presumablyduetothisregulatoryenvironment,heretheopt-outclassactiondidnotentailtheovergrowthandabusessomeperceiveintheUS.
63InAustralia,opt-outclassactionswereintroducedonthefederallevelin1991(theseprovisionsenteredintoforceon4March1992)64andinthestateofVictoriain2000.
65A2009studyshowedthat241classactionapplicationswereleduptoMarch2009and245upto30June2009;thatis,onaverage,14classactionswereinstitutedannually.
Thenumberofclassactionproceedingswasuctuantandtheirfrequencydidnothaveanincreasingtendency.
Therstquarteroftherules'17-year-longhistorysaw33proceedings,followedbyanintensiveperiodof92proceedings;60SeeSection20ofLaw26/1984of19JulyonConsumerProtection(Leyparaladefensadelosconsumidoresyusuarios),nowSection24ofRoyalLegislativeDecree1/2007of16November,whichissuedaconsolidatedtextoftheLawonConsumerProtectionandothersupplementarylaws(TextorefundidodelaLeyGeneralparalaDefensadelosConsumidoresyUsuariosyotrasleyescomplementarias).
ThisprovisionwaslateroninsertedinalmosteveryspecialconsumerlawissuedbytheSpanishlegislator.
SeePieiro(2007:63–65).
TheSpanishCivilProcedureActof2000is,though,therstattempttosystematizecollectiveproceedingsanditsprovisions(Articles6,11,15,15bis,221,222(2),256(1)(6),519).
61Seee.
g.
Sections18-19ofthe2002EnterpriseAct,whichwereinsertedinSections47/A-47/Dofthe1998CompetitionAct.
SeealsoGroupLitigationOrdersinSections19.
10.
and19.
11.
oftheCivilProcedureRules.
62SeeHeffernan(2003:104),BranchandMontrichard(2005).
SeeGotanda(2004).
63SeeStuycketal.
(2007:379)("Connectedwithconcernsabout(…)unmeritoriousclaimsarefearsthatintroducingUS-typecollectiveactionsintoalegalsystemwouldhaveaoodgateeffect.
Thatis,courtswouldbeoverwhelmedwithweakcasestryingtoobtaincompensationthroughcollectiveactionprocedures.
ExperiencefromcountriessuchasSweden,CanadaandAustraliashowsthatthefearsoflegalblackmailandaresultingoodgateeffectonthecourtsdonotseemtohaveoccurred.
").
AnotherpointofreferencecouldbeLatin-America;severalLatin-Americancountriesadoptedclassactionlegislationandinsertedthisinstitutionintoacivil-lawenvironment.
SeeGidi(2003:311,2012:901–940).
64FederalCourtofAustraliaAmendmentAct1991(Cth).
ThefederalclassactionrulesaretobefoundintheFederalCourtofAustraliaAct1976(Cth)ptIVA.
SeeClarkandHarris(2001:289).
65SupremeCourtAct1986(Vic)pt4A(Austl.
).
SeeMorabito(2009a:321).
584TransatlanticPerspectives:ComparativeLawFramingthenumberoftheproceedingswasdecreasinginthelasttwoquarters:63between4September2000and3December2004and53between4December2004and3March2009.
66InCanada,opt-outclassactionswereintroducedinthevastmajorityoftheprovinces(startingwithQuebec's1978legislation67)68andintheFederalCourtRules(in2002).
69AlbeitclassactionlitigationisfrequentinCanada,itisbynomeansexcessive,ascomparedtotheUS.
Nonetheless,itisworthyofremarkthatCanada'sempiricalexperiencesmaybetakenintoaccountonlywithsomecorrec-tion.
Forinstance,contingencyfeesarelawfulinCanadaandlawyersfundthebulkofclassactions70;andseveralprovincesliftedorsoftenedthe"loserpays"principleinrespecttoclassactions.
71Between2010and2018,thelaunchof826classactionswasreportedtotheCanadianBarAssociation'sdatabase.
72Thisis,onaverage,92casesperannum.
73Othersurveysshowthatatleast287classactionproposalswereledinOntariobetween1993andApril200174and,uptoSeptember2004,52proposedclassactionswerecertiedinBritishColumbia,104inOntarioand130inQuébec.
75Inanother66Morabito(2009b).
67Loisurlerecourscollectif,L.
Q.
1978,c.
8.
SeeBouchard(1980),Mazen(1987),Lafond(1998–1999:19–34).
68BritishColumbia,ClassProceedingsAct,R.
S.
B.
C.
1996,c.
50;Newfoundland,ClassActionsAct,S.
N.
L.
2001c.
C-18.
1;Saskatchewan,ClassActionsAct,R.
S.
S.
2001c.
C-12.
01;Alberta,ClassProceedingsAct,R.
S.
A.
2003c.
C-16.
5;Manitoba,ClassProceedingsAct,R.
S.
M.
2002c.
C130;NewBrunswick,ClassProceedingsAct,R.
S.
N.
B.
2011c.
C-125;NovaScotia,ClassProceedingsAct,R.
S.
N.
S.
2007c.
28.
69Kalajdzicetal.
(2009:note29).
ForanoverviewoftheCanadianexperiencesandmajorissues,seeWatson(2001:272–284).
70Kalajdzicetal.
(2009:44).
71Kalajdzicetal.
(2009:42).
BritishColumbiaessentiallyadoptedthe"Americanrule:"costawardsmaybemadeonlyincaseof"vexatious,frivolousorabusiveconduct,"improperorunnecessaryapplicationsorsteps"takenforthepurposeofdelayorincreasingcostsorforanyotherimproperpurpose"andincasethereare"exceptionalcircumstancesthatmakeitunjusttodeprivethesuc-cessfulpartyofcosts.
"SeeClassProceedingsAct,R.
S.
B.
C.
1995c.
50,art.
37andWatson(2001:274).
InOntario,thecourt,whenexercisingitsdiscretionwithrespecttoawardingcosts,"mayconsiderwhethertheclassproceedingwasatestcase,raisedanovelpointoflaworinvolvedamatterofpublicinterest.
"ClassProceedingsAct,R.
S.
O.
1992,c.
6,s.
31(1).
72NationalClassActionDatabase,TheCanadianBarAssociation,http://www.
cba.
org/ClassActions/main/gate/index/default.
aspx.
Accessed20April2019.
Thedatabaseisbasedonvol-untaryreportingandisthereforenotacomprehensiverecordofallCanadianclassactionlawsuits.
Nonetheless,itmaybeusedasaroughindicatorastothenumberofclassactionsinCanadawithinspecictimeperiods.
732010:116,2011:101,2012:141,2013:n/a,2014:150,2015:85,2016:71,2017:80,2018:82.
74BaertandGuindon(2008:3).
75Forfurtherstatistics,seeBranchandMontrichard(2005)andLafond(2006:35)(InQuébec,between1979and2004,151classactionsendedwithasettlement,andin32casesthecourtdecidedfortheclass).
4.
2WhyShouldEuropeansNotFeartheAmerican…59survey,approximately332classactionswerereportedpendingin2009and427classactionsin2014.
76Althoughthesenumbersdonotexcludethepotentialofblackmailsettlementsandotheradverseeffects,theyclearlysuggestthatcollectiveproceedingsentailednolitigationboomandtheconcernofblackmailinglitigationseemsnottobereal.
4.
3TheNovelQuestionsofCollectiveActionsinEuropeCollectiveactionsarelegaltransplantsalientotraditionalcivil-lawthinking,hence,onceintroduced,theycallforthere-considerationofawidearrayofquestions.
77Obviously,itisperfectlylegitimatetoadoptforeignlegalsolutionswithoutadoptingtheirregulatorycontext;however,inthiscase,thelegaltransplantmayraiseissuesthatdonotemergeinthedonorcountry.
4.
3.
1FundingintheAbsenceofOne-WayCost-Shifting,ContingencyFeesandPunitiveDamagesEuropeanlegalsystemsarelargelydevoidofthenancialincentivesthatsointen-sivelystimulatelitigationintheUS(contingencyfees,super-compensatorydamages,noorone-waycostsshifting).
Whileitisneitherimperative,nornecessarilyjustiedtoadoptforeignlegalsolutionsasapackage,absentthisaforeigntransplantmaytakealifeofitsown.
IntheUS,classactionsarenormallynancedbylawrms(incitedbytherewardofacontingencyfee)andprotectedagainsttherisksrelatedtothedefendant'sattorney'sfees(duetotheAmericanrule).
Ontheotherhand,inEuropethereisnocomparablemarket,notonlybecauseclassactionshavenohistorybutalsobecauselitigationislessprotable.
IntheUS,lawrmsarecompensated,vialegalinstitutionsofgeneralapplication,fortheimmenseriskstheyundertake.
Atthesametime,therearenosuchmechanismsontheothersideoftheAtlantic.
Thiscircumstancecallsforaregulatoryconsideration,giventhatnancingistheoilintheengineofcollectiveactions.
78Unfortunately,Europeancollectiveactionlawshavefailedtosettleorevenaddresstheproblemofnancing.
Ontheonehad,theyruledouttheAmericaninstitutionsthatstimulatedtheoperationofUSclassactions.
Ontheotherhand,theyfailedtoreplacethesewithappropriatesubstitutes.
Nonetheless,Europeancollectiveactionswillnotbeeffectiveandself-sustainingabsentappropriatenancialincentivesprovidingariskpremiumthatcompensatesthegrouprepresentativefortherisksincurred.
76Kalajdzic(2018:16–17).
77OnthenancingoptionsinEurope,seeVoet(2016:201–222).
78SeeNagy(2015:548–550).
604TransatlanticPerspectives:ComparativeLawFramingTheEuropeanfearoftheAmerican-stylenancialincentiveshasbeensohugethattheRecommendationonCollectiveRedresssuggestedtheintroductionofsafeguardsinordertoobviateincentivestoabusethemechanismofcollectiveaction.
Itmakestheuseofthe"loserpays"principlemandatory,79excludes,atleastinprinciple,contingencyfees80andprohibitspunitivedamages.
81Furthermore,itrestrictsgrouprepresentationtonon-protentities.
82TheRecommendationdemonstrateswellEurope'saversiontotheAmericanlit-igationpattern.
Namely,thesesafeguardsappeartobeexcessive(evenredundant),takingintoaccountthattheRecommendationexplainsthechoiceofthe"opt-in"sys-temwiththeconsiderationofobviatingabusivepractices.
TheRecommendation'sinsistenceonnotadoptinglegalconceptspeculiartotheUSregulatoryenvironmentsurroundingtheoperationoftheUSclassactionactuallysuggeststhat,ontheothersideoftheAtlantic,itisnottheopt-outsystembutitslegalenvironmentthatmayberesponsiblefortheallegedplethoraofclassactions.
Furthermore,contingencyfeesandpunitive(orexemplary)damagesareavailableinquiteoffewMemberStates83andthereisnoreasontorulethemoutspecicallyinrelationtoclassactions.
AlbeitthattheamountofexemplarydamagesawardedinEuropeancommonlawsystemsistiny(ascomparedtoUSpunitiveawards),thisconceptisasolidpartofthese.
84Thebiggesttroubleis,however,thattheEuropeanmodel,inessence,rulesouttheriskpremiumdevicesofUSlaw,whichareratherunpopularinEurope,anyway,whileitfailstoofferanysurrogate.
Thefunctionandeffectsofcontingencyfeesandpunitivedamagesaretoprovideariskpremiumtogrouprepresentatives,inordertocompensatethemfortherisktheyruninfavourofgroupmembers.
Europeansystemsscraptheselegalinstitutions(inlinewiththeprohibitionoftheRecommendationonCollectiveRedress)withoutofferinganythinginexchangeinordertotackletheproblemofriskpremium.
Above,itwasarguedthatitiseconomicallyrationalforgrouprepresentativestoenforcegroupmembers'claimsifallthecostsrelatedtothecollectiveactioncanbeshiftedonthelosingdefendantandgrouprepresentativesaregrantedariskpremium,i.
e.
iftheywintheygetareimbursementhigherthantheiractualcostsinordertocompensatethemfortherisktheyrunwheninstitutingtheproceedings.
85The"Americanrule"onattorney'sfees,contingencyfeesandpunitivedamagesaremeanttobeariskpremium(orsimplyhavesuchanunintendedeffect).
The79CommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompen-satorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionLaw,para13.
80Id.
atpara.
29-30.
AccordingtotheRecommendation,contingencyfeescanbepermittedonlyexceptionally.
("TheMemberStatesthatexceptionallyallowforcontingencyfeesshouldprovideforappropriatenationalregulationofthosefeesincollectiveredresscases,takingintoaccountinparticulartherighttofullcompensationofthemembersoftheclaimantparty.
").
81Id.
atpara31.
82Id.
atpara4.
83SeeGrace(2006:287–288),Waelbroecketal.
(2004:93–94,116–17),Leskinen(2011:98–105).
84Wilcox(2009:7–54).
85Nagy(2013:495–497).
4.
3TheNovelQuestionsofCollectiveActionsinEurope61purposeofthe"Americanrule"istoshiftsomeoftherisksattachedtotheplaintiff'sorgrouprepresentative'sfailureontothedefendant.
86Super-compensatorydamagesareclearlyriskpremiums;punitiveandtrebledamagesaremeanttoincitetheplaintifftolitigatethroughcompensatinghimfortherisksherunsbecauseofthelitigation.
87Contingencyfeesalsocontainaclearriskpremium,becausetheyarepresumablyhigherthantheattorney'sfeeschargedincaseofnorisk88;thisriskpremiumismeanttocompensatethelawrmfortherisksittakesoverfromtheclient.
Albeitjurytrials(whichappeartoissueinhigherawards)andgenerous"painandsuffering"awardsareprobablynotmeanttoprovideariskpremium,thisisoneoftheirside-effects.
InUSlaw,itistheprovisionofgenerousriskpremiumsthatmakestheoperationoftheUSclassactionsointensive.
89Ironically,themeasuresthatcouldmakecollectivelitigationeffectivewouldmovetheEuropeanregulatoryenvironmenttowardsUSlaw.
AllthemeasurestheabsenceofwhichexplainedwhyEuropeshouldnotfeartheopt-outclassactionareactuallythefunctionalequivalentsofariskpremium,eveniftheyareofgeneralapplicationandarenotspecictoclassactions.
Theseensurethattheschemeiseffectiveandwide-spread.
90InEurope,thesimplestwayofcompensatinggrouprepresentativesfortheriskstheyassumewhenenforcingthegroup'sclaimswouldbetograntthemalumpsuminexcesstotheirexpenses(organizationalandordinarylegalcosts).
Neverthe-less,allbenetsinexcessofcompensationwouldbethefunctionalequivalentsofsuper-compensatorydamages.
Anothersolution,introduced,bywayofexample,inCanada,91couldbeliftingorsofteningthe"loserpays"ruleinfavourofthegrouprepresentative;however,again,theriskpremiumgrantedtothegrouprepresentative(andbornebythedefendant),whereasliftingoneofthehurdlesofcollectivelitiga-tion,maycreateacatalysingfactorwhoseabsenceisanargumentconrmingwhyEuropeshouldnotfeartheopt-outclassaction.
Allinall,itseemsthattheeffectivenessandwidespreaduseofcollectivelitigationandthepotentialofabuseandadverseeffectsareinverselyproportionaltoeachother.
Itwouldamounttoanexaggerationtocontendthatthisisaviciouscircle;itisnot,itisatrade-off,whichdoesallowne-tuning.
TheEuropeanlegislatororlegislatorshavetondthepointofequilibriumwherethemarginalbenetofeffectiveenforcementequalsthemarginalcostofabuseandadverseeffects.
Lowriskpremiumswouldencouragecollectivelitigationingoodcasesbutwouldnotbesufcienttobeanincentivetotakeupweakcases.
IftheriskpremiumembeddedintheUSsystemappearstobeexcessiveinEurope,aloweroneshouldbeintroduced.
Furthermore,theperilsinherentintheriskpremiumcertainlydonotrefutethepropositionthattheopt-outclassactionshouldnotbefearedifintroducedinthecurrentEuropeanregulatoryenvironment.
Thefactthatwithoutanappropriaterisk86SeeGryphon(2011:569).
87Behr(2003:120–121),Visscher(2009:224),Koziol(2009:304).
88Nagy(2013:495–496).
89Nagy(2013:489,497).
90Nagy(2013:496).
91SeeKalajdzicetal.
(2009:note29).
624TransatlanticPerspectives:ComparativeLawFramingpremiumtheintensityofopt-outclassactionswouldnotexceedacertainlevelisnotanargumentagainsttheirintroduction.
Inparticular,becausethegrouprepresentativemayespousethecollectiveactionfordifferentnon-economicreasons;andthelimitedEuropeanexperienceshowsthatcivilorganizationsmayendeavourtoprotecttherightsofgroupmembers,evenincaseitdoesnotpayoutforthemtodoso.
Allinall,themainawofEuropeancollectiveactions'treatmentofnancialincentivesisthat,inessence,theyscraptheriskpremiumdevicesofUSlaw,whilefailingtoofferanysurrogate.
92Intheabsenceofanadequateriskpremiumitwillnotpayoutforgrouprepresentativestotakeupthecase;andevenifthegrouprep-resentativeisanon-protorganization,failingpublicfunding,theentity'sexpectedcostsandexpectedincomehavetobeinbalancetomakethesystemsustainable.
4.
3.
2Two-WayCost-ShiftingWhileintheUS,owingtotheAmericanrule,groupmembersdonotruntheriskofbecomingresponsibleforthedefendant'sattorney'sfees,inEuropetheprincipleoftwo-waycost-shiftingprevails.
Thisimpliesthat,evenifthisprincipledoesnotworktothefull,groupmembers'nancialliabilityforthelegalcostshastobeaddressed.
Thegeneralprincipleofcivilprocedurerequiresthatsomeoneshouldbeobligedtoreimbursethewinningpartyforhislegalexpensesandthereisnoreasontodeprivethedefendantsofcollectiveactionsofthisprotection.
Thisobligationmaybeplacedeitheronindividualgroupmembersoronthegrouprepresentative.
Inopt-insystemsbothvariationsareconceivable,asgroupmembersjointhecollectiveactionvoluntarily.
However,ifadopted,opt-outsystemsentailanadditionaltwist:thestrongestargumentfortheconstitutionalityofopt-outclassactionsisthattheyconferonlybenetsandnodisadvantagesongroupmembers;thisargumentwouldloseweightifgroupmemberswereexposedtotheriskofbeingliableforthedefendant'slegalcosts.
Hence,theargumentfortheopt-outscheme'sconstitutionalitymaybepreservedifgroupmembersarefreedfromallliabilityandthegrouprepresentativerunsthefullriskastolegalcosts.
4.
3.
3DistrustofMarket-BasedMechanismsintheEnforcementofPublicPolicy(NoPrivateAttorneyGeneral)InEurope,classactionsarenotmeanttohaveapublicpolicyfunctionandserveasapurelycompensatoryfunction.
Apublicpolicyrolewouldbedifculttoreconcilewiththeprinciplethatpublicpolicyistheprerogativeofthestate.
Theonlylegitimatepurposeofcollectiveactionsistoorganizetheeffectiveenforcementofprivatelaw92SeeGeradin(2015:1096–1099).
4.
3TheNovelQuestionsofCollectiveActionsinEurope63claimsthatwouldotherwisenotbeenforced.
Whilethismaycertainlyinuencethebehaviorofundertakings,beyondtheseside-effects,allpublicpolicyaimsarelefttopubliclawandpublicauthorities.
Inthesamevein,theconceptof"privateattorneygeneral"iscompletelyalientoEuropeanlegalsystemsandfor-protentities'aptnesstoservethepublicinterestisnormallyreceivedwithdoubt.
Asaresult,Europeanlegislatorshavebeenreluctanttovestfor-protprivateentitieswiththepowertolaunchcollectiveproceedings.
Standinghasbeennormallylimitedtopublicentitiesandnon-protorganizations.
Thegeneralattitudeisthatnancialincentivesmaygiveastimulusthatisnotreconcilablewiththepublicinteresttobeprotected.
Theconsequenceofthisattitudeisthatinclassactionsstandingisnormallyconferredonnon-protentities(non-protorganizations,administrativeagenciesorpublicprosecutors),whicharepresumednottobeinuencedbyinadequateincentives.
934.
3.
4EuropeanOpt-InCollectiveActionsandJoindersofPartiesAfewEUMemberStatesadoptedopt-insystems,rulingoutrepresentationwithoutpositiveauthorization.
Thesesystemsembedtherequirementthatthegrouprepre-sentative,onewayoranother,hastobeexplicitlyauthorizedbygroupmembersandonlythosepersonsarepartofthelitigationwhoexpresslydidso.
Probablytherstquestionthatemergesastotheopt-insystemisitsraisond'être:whytohaveanopt-inschemeifthedoctrineofjoinderofpartiesisavailablefororganizinggrouplitigation.
Theanswerliesinthedetails.
Ajoinderofpartiescreatesaverydecentralizedsystem.
Itisnotleadbyagrouprepresentative,quitethecontrary,inajoinderofparties,legallyspeaking,thereisnogrouprepresentative,thoughthepartiesmayhirethesameattorney.
Thegroupisnotcentralized,groupmembershaveequalrightsandobligations,theymaymakeindividualsubmissionsandtheirmotionsmaycontradict.
Thismakesatraditionaljoinderofpartiesunsuitableformasslitigation,inparticularinrelationtosmallclaims.
Theopt-inclassactionisacentralizedjoinderofpartiesthatmakesmasslitigationfeasiblethroughtheconcentrationoftherepresentationandtherestrictionofcer-tainproceduralrightsofgroupmembers(i.
e.
groupmembers'proceduralrightsarerestrictedincomparisontoindividuallitigation).
Thatis,theopt-inclassactionnotonlysimpliesadherencebutalsoturnsthegrouprepresentativefromamarionetteintothemasterofthecase.
93SeeFairgrieveandHowells(2009:400,407)(TheEuropeanmodelregards"publicagenciesoraccreditedconsumerorganizationsasagatekeeper[s].
").
644TransatlanticPerspectives:ComparativeLawFraming4.
3.
5Opt-OutSystemsandthe"OnlyBenets"PrincipleThetabooofpartyautonomyhasprofoundlyshapedtheEuropeanmodelofcollectiveactions.
ThisentailedthatsomeMemberStatesadoptedopt-inschemes,whilethosewhointroducedanopt-outsystemdidthisalongwiththe"onlybenets"principle(i.
e.
intheopt-outsystemonlybenetsmayaccruetogroupmembers).
Accordingtothe"onlybenets"principle,theopt-outruleisreconcilablewiththeconstitutionalrighttopartyautonomy,becauseitconfersonlybenetsongroupmembers,sotheirassentmaybepresumed.
Asacorollary,opt-outsystemswereworkedoutinawaythatgroupmembersrunnoriskastolegalcostsand,attimes,theyarecoveredbythenaljudgment'sresjudicataeffectsonlyiftheyexpresslyacceptitorifthatisintheirinterest.
TheFrenchclassactionyarndemonstrateswellhowthe"onlybenets"principle,erectedbyconstitutionalconsiderations,hasshapedEurope'sparadigm.
Franceintroducedacollectiveactionmechanismforconsumersin2014,94whichwasscrutinizedandendorsedbytheFrenchConstitutionalCouncil.
95TheFrenchregulatoryregimeestablishedatrulyuniquesystem(actiondegroupeàlafranaise),whichcombinestheelementsoftheopt-outandopt-inmodels.
EventhoughFrenchlawretainedtherequirementthattheconsumerneedstoadherethroughanexpressdeclaration,thisdeclarationneedstobesubmittedonlyafterthejudgmenthasbeenmade,whentheconsumerturnstheawardintocash.
Theschemeappearstobeadefactoopt-outsystem,althoughtheconsumer'srighttoopt-inisretainedandcanbeexercisedafterthejudgmentismade.
Thisis,tosomeextent,comparabletotheopt-outsystem,sinceeventhere,attheendoftheday,groupmembershavetoactinordertoreceivetheirshareoftheaward.
Atthesametime,thereisarealdifferencebetweenthe"actiondegroupeàlafranaise"andopt-outclassaction.
Intheformercase,thejudgment'sresjudicataeffectextendstothegroupmemberonlyif,afterhavingbeendulyinformed,heexpresslyacceptsthejudgmentandthecompensation.
Ifagroupmemberthinksthathecanreachamorefavourableaward,hecanenforcehisclaimindividually.
However,thisseemstobearatherformaldifference:itishighlyunlikelythatinthesubsequentindividualactionthecourtwouldreachadifferentconclusion.
Takingintoaccounttherulethattheconsumerhastostepinonlyinthelastphase,afterthelegalsituationhasbeenxed,andassumingthatconsumerswillgotheirownwayextremelyrarely,thissystemcanbereasonablycharacterizedasadefactoopt-outscheme.
TheFrenchconsumercode(Codedelaconsummation)establishesastandardgroupprocedureandasimpliedprocedure.
Thesimpliedprocedure96appliesiftheidentityandthenumberoftheinjuredconsumersareknownandtheysustainedeitheraharmofthesameamount,ofthesameamountperagivenserviceorofthe94Act2014-344of17March2014(Loin°2014-344du17mars2014relativeàlaconsomma-tionpubliéeauJournalOfcieldu18mars2014).
95Decision2014-690of13March2014(Le14novembre2014,JORFn°0065du18mars2014,Texten°2,Décisionn°2014-690DCdu13mars2014).
96ArticleL423-10oftheFrenchConsumerCode.
4.
3TheNovelQuestionsofCollectiveActionsinEurope65sameamountforagivenperiod.
Accordingtothesecriteria,thecourtmayestablishthedefendant'sliabilityandorderittocompensategroupmembersdirectlyandindividuallywithinthedeadlinesetbythecourt.
Theonlyelementwhichobscurestheopt-outnatureofthisprocedureistheruleprovidingthataconsumercanbecompensatedonlyafterheacceptedtobecompensatedaccordingtothetermsofthejudgment.
Thesimpliedprocedurehasthestrongestopt-outfeatures.
Fromtheperspectiveofresjudicataeffects,thisrulepreserves,indeed,theopt-innatureoftheprocedure,sinceiftheconsumerisnotcontentwiththejudgment,hemaytaketherouteofindividuallitigation.
However,notwithstandingthelackofresjudicataeffects,asnotedabove,itishighlyunrealisticthatthecourtwouldcometoadifferentconclusioninthesubsequentindividuallitigation.
Furthermore,asamatteroffact,thesimpliedproceduredoesnotmakeexpressadherenceapre-conditionoftheprocedureandthejudgment.
Infact,itdoesnotrequiremuchmoreactivityfromtheconsumerthanopt-outsystemsdo:theconsumerwouldhavetoactatthepaymentorenforcementstageanyway(forexample,contactthegrouprepresentativeorthecourt,initiatetheenforcementofthejudgment).
Thestandardprocedurefollowsthesamelogic.
97Intherstphase,thejudge—asaresultofthegrouprepresentative'saction—decidesonthemeritsofthecase,insofarthisispossible.
Itestablishesthedefendant'sliability,denesthegroupandestablishestheapplicablecriteria,determinestheharmsthatcanbecompensatedinrespectofallconsumersorallcategoriesofconsumers,includingtheamountandtheelements,whichpermittheevaluationoftheharm.
Furthermore,thecourtestablishesthemeasuresthathavetobeadoptedtoinformgroupmembersandxesadeadlineforadherence.
Inthesecond,out-of-courtphase,groupmembersareinformedandhavetodecidewhethertheywanttobecoveredbythejudgment.
Intheidealcase,thedefendantpayscompensationtothem.
Shouldthisnothappen,theactionmovestothethirdphase,wherethecourtdecidesontheeventualdifcultiesofenforcementandonindividualcases.
Accordingly,thecourtdecidesonthemeritsofthecaseasearlyastherstphase.
Atthisstage,consumers'expressadherenceisnotrequired,andtheyhavetodecidewhethertheywanttobecompensated.
Thethirdstageisleftforne-tuningandindividualaspects.
Again,thejudgment'sresjudicataeffectisconditionalontheconsumer'sacceptanceofthejudgment.
However,thisappearstobearatherformaldissimilaritytotheopt-outsystem:asnotedabove,itseemstobehighlyunrealisticthatthecourtwouldcometoadifferentconclusioninthesubsequentindividuallitigationthaninthecollectiveaction.
Itappearsthat,duringthelaw'sconstitutionalreview,itwasdecisivefortheFrenchConstitutionalCouncilthattheresjudicataeffectcoverssolelythosegroupmemberswhoreceivedcompensationattheendoftheprocedure.
98Itseemsthatthecircumstancesthatonlybenetsaccruetogroupmembersandthatthejudgment'sresjudicataeffectcoversonlythosegroupmemberswhoassentedtoit(sincecompen-97ArticlesL423-3toL423-9oftheFrenchConsumerCode.
98Decision2014-690of13March2014(Le14novembre2014,JORFn°0065du18mars2014,Texten°2,Décisionn°2014-690DCdu13mars2014),paras10and16.
664TransatlanticPerspectives:ComparativeLawFramingsationcanbepaidonlyifthegroupmemberacceptsit)weresufcienttoextinguishthepossibleconstitutionalconcerns.
Beforetheadoptionoftheabove-mentioneddecision,theFrenchConstitutionalCouncilhadbeenreferredtoasanauthoritytojustifytheunconstitutionalityoftheopt-outsystem,citingitsfamousdecisionof1989,99whichdealtwithalawthatauthorizedtradeunionstolaunchanyaction(toutesactions)onbehalfoftheemployee,includingclaimsofunfairdismissal.
100TheFrenchrulesadoptedin2014seemtohavegonebeyondtheconstitutionalrequirementsofthedecisionof1989,since,althoughattheendoftheprocedure,theydorequireexpressacceptancefromgroupmembers,theydonotcontentthemselveswithtacitadherence.
4.
4SummaryTheregulatoryandsocialenvironmentsofcollectiveactionsdifferconsiderablyonthetwosidesoftheAtlantic.
ContrarytotheUS,"entrepreneuriallawyering"isvirtuallymissinginEurope,contingencyfeesareeitherprohibited(oravail-ablewithrestrictions)or,eveniflegal,arenormallynotavailableinthemarket;activeclient-acquiringandlawyeradvertisementsarebannedorheavilyrestrictedinmostEUMemberStates.
The"Americanrule"andespeciallyone-waycost-shifting,asprovidedbyvariousAmericanprotectivestatutes,areunknowntoEuro-peanjurisdictions,whichtraditionallyfollowtherulesoftwo-waycost-shifting.
Super-compensatorydamagesarenotavailableinEurope,withsomenarrowandinsignicantexceptionsinacoupleofcommonlawjurisdictions,andthegenerousUSdiscoveryruleshaveequallynocounter-part.
Thesedifferenceshavetwofoldconsequences.
First,duetotheabsenceoftheabovepro-plaintiffincentives,theoperationandimpactofEuropeancollectiveactionsdifferconsiderablyfromtheirAmericanancestor.
Second,Europeanleg-islatorshavetoaddressquiteafewregulatoryissuesthatdonotemergeintheUS.
Boththeoreticalanalysisandempiricaldataclearlysuggestthatthepurportednegativerepercussionsofopt-outcollectivelitigation(USclassaction)wouldnotemergeifthisregulatorymechanismwereintroducedinEurope.
ThetheoreticalargumentsandthebriefaccountoftheempiricalevidenceinEuropesuggestthat,whereastherelativelyshorttimethathaselapsedsincethewide-spreadappearanceofthesemechanisms(bothopt-inandopt-outsystems)inEuropedoesnotenableustopredictlong-termconsequences,opt-outcollectiveproceedingswouldtriggernolitigationboominEurope.
ThisconclusionisunderpinnedalsobytheempiricalexperimentsofAustraliaandCanada,whichintroducedclassactionsinaregulatoryenvironmentdifferentinsomeoftherelevantaspectsfromtheUS.
ThetransplantationofcollectiveactionsintotheEuropeanlegalandsocialenvi-ronmentraisesanarrayofnovelregulatoryquestions.
99Décisionn°89-257DCdu25juillet1989.
100Id.
atpara25.
4.
4Summary67EuropeanlegalsystemslackthecounterpartsofUSlegalinstitutionsthatfacilitatelitigationthroughtheprovisionofnancialincentives(one-waycost-shifting,con-tingencyfeesandpunitivedamages),makinglitigationnanceacrucialregulatoryissue.
Unfortunately,Europeancollectiveactionlawshavefailedtosettleorevenaddressthisproblem:whiletheyruledouttheAmericaninstitutionsthatstimulatetheoperationofUSclassactions,theyfailedtoreplacethesewithappropriatesub-stitutes.
Arguably,failingpublicfunding,Europeanclassactionshavelittlechancetobecomeeffectiveandself-sustaining,if,onewayoranother,appropriatenancialincentivesarenotprovidedfortoensurethatthegrouprepresentativereceivesariskpremiumforrunningnancialrisksintheinterestofthegroup.
Economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremiumand,hence,hemaybeincitedtoespousegroupmembers'claims,ifheiscompensatedfortherisksherunswhenengagingincollectivelitigation.
WhileinUSclassaction,duetotheAmericanrule,groupmembersarenotresponsibleforthedefendant'sattorney'sfeeseveniftheclassactionfails,inEurope,theprincipleoftwo-waycost-shiftingprevails,raising—bothinopt-inandopt-outsystems—theregulatoryquestionofallocation.
Itisgenerallyacceptedthattheopt-outscheme'sconstitutionalitymaybepreservedifgroupmembersarefreedfromallliabilityandthegrouprepresentativerunsthefullriskastolegalcosts.
Europeanclassactionsarenotmeanttohaveapublicpolicyfunctionandtheirroleislimitedtoensuringacompensatoryremedyforgroupmembers.
Astheconceptof"privateattorneygeneral"iscompletelyalientoEuropeanlegalsystemsandthegeneralattitudeisthatnancialincentivesmayfunctionasanunacceptablestimulus,for-protentities'aptnesstoservethepublicinterestisnormallyreceivedwithdoubt.
ThisexplainswhyinEuropestandinghasbeennormallylimitedtopublicentitiesandnon-protorganizations.
ApeculiarelementofthearchitectureofEuropeancollectiveactionsisthe"onlybenets"principle,whichprevailsinopt-outsystems.
Thestrongestargumentfor"representationwithoutauthorization"andagainsttheallegationthatopt-outclassactionsencroachonpartyautonomyisthatonlybenetsmayaccruetogroupmem-bers,soitwouldberedundanttorequireexpressauthorization.
Hence,thesesystemswereworkedoutinawaythatgroupmembersrunnoriskastolegalcostsandtheyarecoveredbythenaljudgment'sresjudicataeffectsonlyiftheyexpresslyacceptitorifthatisintheirinterest.
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Chapter5EuropeanModelsofCollectiveActionsAsidefromsomegenerallegalrequirements,EUlawcontainsno"federal"legalframeworkforMemberStates'collectiveactionregimes.
MemberStateshavepro-ceduralautonomyintheapplicationofEUlaw,thatis,theyarefreetodeterminethestructureandwayofapplicationandenforcement,1withtheprovisothatnationallawmustnotdiscriminatebetweentheapplicationofEUanddomesticlaw(principleofequivalence)2and"mustnotbesoframedastomakeitvirtuallyimpossibleorexcessivelydifculttoobtainreparation(principleofeffectiveness).
"3In2013,theEuropeanCommissionadoptedaRecommendationonCollectiveRedress,4anon-bindinglegalinstrument,5proposingthatMemberStatesadoptcol-lectiveredressmechanismsforviolationsofEUlaw.
AlthoughitmaycertainlyhaveanimpactonMemberStatelaws,6asnotedabove,contrarytoadirective,the1Seee.
g.
Case51-54/71InternationalFruitCompany,[1971]ECR1107,ECLI:EU:C:1971:128,paras3and4.
2Seee.
g.
Case33/76,Rewe-ZentralnanzeGandRewe-ZentralAGvLandwirtschaftskammerfürdasSaarland,[1976]ECR1989,ECLI:EU:C:1976:188,para5.
3Seee.
g.
CaseC-261/95RosalbaPalmisanivIstitutonazionaledellaprevidenzasociale(INPS),[1997]ECRI-4025,ECLI:EU:C:1997:351,para27.
4ForananalysisoftheRecommendation,seePieiro(2013),Szalai(2014),Stadler(2015:61)andNagy(2015:530).
5Article288TFEU.
6Infact,theRecommendation'simpactonpositivelawintheMemberStateshasbeenratherslight,seeCommissionReportontheimplementationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p20.
("Asfarasthetransitionintolegislationisconcerned,theanalysisofthelegislativedevelopmentsinMemberStatesaswellastheevidenceprovideddemonstratethattherehasbeenaratherlimitedfollow-uptotheRecommendation.
TheavailabilityofcollectiveredressmechanismsaswellastheimplementationofsafeguardsagainstthepotentialabuseofsuchmechanismsisstillveryunevenlydistributedacrosstheEU.
TheimpactoftheRecommendationisvisibleinthetwoMemberStateswherenewlegislationwasadoptedafteritsadoption(BEandLT)aswellasinSIwherenewlegislationispending,andtoacertainextentintheMemberStatesthatchangedtheirlegislationafter2013(FRandUK).
")TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_571725EuropeanModelsofCollectiveActionsRecommendationcreatesnoframeworkfornationalregulation.
Itssignicanceandpotentialimpacthastobeassessedaccordingly.
TheRecommendationfollowsaconservativeapproach.
Itsuggestsrestrictinggrouprepresentationtonon-protentitiesandpublicauthorities.
7Furthermore,itexpressesastrongpreferencetowardstheopt-insystem,recommendingthatonlythosegroupmembersshouldbeinvolvedinthecollectiveactionwhoexpresslyassentedtoit.
8TheRecommendationdoesnotbantheopt-outschemeoutrightbutleavesopenagate,evenifasmallone,tosuchmechanisms:"[a]nyexceptionto[theopt-in]principle,bylaworbycourtorder,shouldbedulyjustiedbyreasonsofsoundadministrationofjustice.
"9TheRecommendationintroducessafeguardsinordertoobviatetheincentivestoabusethemechanismofcollectiveactions:itmakestheuseofthe"loserpays"principlemandatory,10excludes,atleastinprinciple,contingencyfees11andprohibitspunitivedamages.
12TheaboveEuropeanfederalframeworkmaychangeconsiderablyintheforesee-ablefuture.
InApril2018,theCommissionproposedtheadoptionofaconsumercollectiveactionscheme(termed"representativeaction").
13TheproposeddirectiveisinaccordancewiththecommonprinciplesofEuropeancollectiveactionlaws:ithasasectoralapproach(consumerprotection),rigorouspre-conditions,confersstand-ingonqualiedrepresentativeentities,maintainsthe"loserpaysrule"andrulesoutnancialincentives,suchascontingencyfeesandpunitivedamages.
Itevadesthedilemmaofopt-inandopt-outthroughleavingthechoicetoMemberStates.
14Giventhatmostnationalcollectiveactionschemesalreadycomplywiththeserequirements,7RecommendationonCollectiveRedress,paras4–7.
8Trstenjak(2015:689).
9RecommendationonCollectiveRedress,para21.
("Theclaimantpartyshouldbeformedonthebasisofexpressconsentofthenaturalorlegalpersonsclaimingtohavebeenharmed('opt-in'principle).
Anyexceptiontothisprinciple,bylaworbycourtorder,shouldbedulyjustiedbyreasonsofsoundadministrationofjustice.
")10RecommendationonCollectiveRedress,para13.
11RecommendationonCollectiveRedress,paras29–30.
AccordingtotheRecommendation,con-tingencyfeescanbepermittedonlyexceptionally.
("TheMemberStatesthatexceptionallyallowforcontingencyfeesshouldprovideforappropriatenationalregulationofthosefeesincollectiveredresscases,takingintoaccountinparticulartherighttofullcompensationofthemembersoftheclaimantparty.
")12RecommendationonCollectiveRedress,para31.
13ProposalforaDirectiveonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC,COM(2018)184nal.
SeeEuropeanParliamentlegislativeresolutionof26March2019ontheproposalforadirectiveoftheEuropeanParliamentandoftheCouncilonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC(COM(2018)0184–C8-0149/2018–2018/0089(COD)).
14Article6.
5EuropeanModelsofCollectiveActions73thedirectiveissupposedtoentailnolandslideconceptualreform.
Instead,itsmajorvirtueisexpectedtobetheintroductionofconsumercollectiveactioninonethirdoftheMemberStateswherethismeachanismisstillnotavailableatall.
ThischaptergivesatranssystemicoverviewoftheEuropeannationalsolutionsandschemesalongthekeyissuesofclassactions.
15ItpresentstheEuropeanlandscape,theopt-inandopt-outsystemsandtheirmainfeatures,thepurviewofcollectiveactionlawsfeaturingaprecautious,step-by-stepevolution,thepre-requisitesofcollectiveactionsandcertication,therulesonstandingandadequaterepresentation,thestatusofgroupmembers,theirliabilityforlegalcostsandtheresjudicataeffectinopt-inproceedings,theoperationofthe"onlybenets"principleinopt-outproceedingsanditsimpactonthestatusofgroupmembers,andtheenforcementofjudgmentsincollectiveactions.
5.
1TheEuropeanLandscape:ToOptinortoOptOutInEurope,thehistoryofcollectiveactionsstartedroughlythreedecadesago.
16Collectiveactionlawgainedafootholdinthemid-1990s.
AsidefromtheEnglishrepresentativeaction,adoctrinerootedincommonlawbutrarelyusedinpractice,17classactionlegislationrstappearedintheHispanicpeninsula(Spain,1984;Portu-gal,1995),inGreeceinconsumerprotectionlaw(1994)andinHungaryintheeldofcompetitionlaw(1996).
Interestingly,allthesesystemswerebasedontheopt-outprincipleand,evenmoreinterestingly,theyprovedtobelesseffectivethanonewouldexpectfromanopt-outscheme,andwaylesseffectivethanUSclassactions.
Thesewerefollowedbytheintroductionofvariousopt-inandopt-outschemes.
Today,17outof28MemberStatesprovideforcollectiveactions18and10outofthemhave15Forageneraltypology,seeHensler(2017:971–979).
16SeeFairgrieveandHowells(2009:383–401).
17Sherman(2002:402).
18Commission'sReportontheimplementationoftheRecommendationonCollectiveRedresssaysthat"Compensatorycollectiveredressisavailablein19MemberStates(AT,BE,BG,DE,DK,FI,FR,EL,HU,IT,LT,MT,NL,PL,PT,RO,ES,SE,UK).
"CommissionReportontheimplemen-tationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p3.
However,somewhatmisleadingly,italsolistsMemberStateswherethereisadmittedlyno"legislationoncompensatoryrelief"but"collectiveactionsarecarriedoutonthebasisoftheassignmentofclaimsorthejoinderofcases.
"745EuropeanModelsofCollectiveActionsasystembased,atleastpartially,ontheopt-outprinciple(Belgium,19Bulgaria,20Denmark,21France,22Greece,23Hungary,24Portugal,25Slovenia,26Spain,27andthe19TheBelgiansystemleavesittothejudgetodecidewhethertheactionshouldbeconductedaccordingtotheopt-inortheopt-outmodel.
LawInsertingaTitle2on'CollectiveCompensationAction'inBookXVII'SpecialJurisdictionalProcedures'oftheCodeofEconomicLaw,28March2014,MoniteurBelge(M.
B.
)(OfcialGazetteofBelgium(29March2014)(Loiportantinsertiond'untitre2Del'actionenréparationcollectiveaulivreXVIIProcéduresjuridictionnellesparticulièresduCodededroitéconomiqueetportantinsertiondesdénitionspropresaulivreXVIIdanslelivre1erduCodededroitéconomique)andSectionXVII.
38inconjunctionwithSectionI.
21oftheBelgianCodeofEconomicLaw.
20Chapter33,Sections379-388oftheBulgarianCodeofCivilProcedure,foranEnglishversionofthestatutorytext,seehttps://kenarova.
com/law/Code%20of%20Civil%20Procedure.
pdf.
Accessed20April2019.
SeeKatzarskyandGeorgiev(2012:64).
21Sections254a–254eoftheAdministrationofJusticeAct.
22InFrance,defactoopt-outclassactionswererstintroducedintheeldofconsumerprotectionin2014,Loin°2014-344du17mars2014relativeàlaconsommationetDécr.
n°2014-1081du24sept.
2014relatifàl'actiondegroupeenmatièredeconsommation,followedbythehealthcaresectorinJanuary2016,Loin°2016-41du26janv.
2016demodernisationdenotresystèmedesantéetDécr.
n°2016-1249du26sept.
2016relatifàl'actiondegroupeenmatièredesanté.
InNovember2016,ageneralframeworkwascreatedinFranceforgroupactions.
Loin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
Thenewregimeextendedthepurviewofthemechanismtodiscrimination,environmentalprotection,personaldataandhealthcarematters,insertingSections826-2–826-24intotheFrenchCodeofCivilProcedure.
23Articles10(16)-(29)ofLaw2251/1994onConsumers'Protection.
24Section92ofHungarianCompetitionAct(1996.
éviLVII.
trvényatisztességtelenpiacimaga-tartásésaversenykorlátozástilalmáról);Sections38-38/AofHungarianConsumerProtectionAct(ActCLVof1997)(1997.
éviCLV.
trvényafogyasztóvédelemrol);Sections580-591ofthenewHungarianCodeofCivilProcedureeffectiveasfrom1January2018(ActCXXXof2016ontheCodeofCivilProcedure,inHungarian:2016.
éviCXXX.
trvényapolgáriperrendtartásról).
25Law83/95ontheAcoPopular.
SeeRossiandFerro(2013:46–64)andFerro(2015:299–300).
26LawonCollectiveActions(Zakonokolektivnihtobah—ZkolT),OfcialJournaloftheRepublicofSloveniaNo.
55/2017.
27SeeSection20ofLaw26/1984of19JulyonConsumerProtection(Leyparaladefensadelosconsumidoresyusuarios),nowSection24ofRoyalLegislativeDecree1/2007of16November,5.
1TheEuropeanLandscape:ToOptinortoOptOut75UnitedKingdom28).
29Accordingly,morethanhalfoftheMemberStateshavesanc-tionedtheintroductionofcollectiveactionsandfromthosewhodid,morethanhalfchose,tosomeextent,theopt-outsystemandonlylessthanhalfstuckfullytothemoreconservativeopt-inprinciple(Finland,30Germany,31Italy,32Lithuania,33Malta,34Poland35andSweden36).
Acoupleofstatesadoptedmechanismsthatmayresemblecollectiveactionsbutcannotberegardedasameansofcollectivecivillitigation(Fig.
5.
1).
ForreasonsadvancedaboveinSect.
4.
3.
4,traditionalproceduralinstitutions(joinderofpartiesandassignmentofclaims)cannotbeconsideredaformofcollectiveaction,althoughtheyareattimesusedforthepurposeofcollectivelitigationinacoupleofMemberStates(e.
g.
AustriaandtheNetherlands).
VirtuallyeverysingleMemberStatelawprovidesforthispossibilityandin11MemberStates(Austria,Croatia,Cyprus,CzechRepublic,Estonia,Ireland,Latvia,Luxembourg,theNetherlands,Romania,Slovakia),beyondtheselegalinstituions,nospecialproceduralschemeisavailablewhichissuedaconsolidatedtextontheLawonConsumerProtectionandothersupplementarylaws(TextorefundidodelaLeyGeneralparalaDefensadelosConsumidoresyUsuariosyotrasleyescomplementarias).
ThisprovisionwaslateroninsertedinalmosteveryspecialconsumerlawissuedbytheSpanishlegislator.
SeePieiro(2007)63–65.
TheSpanishCivilProcedureActof2000is,though,therstattempttosystematizetherulesofcollectiveproceedings(Articles6,11,15,15bis,221,222(2),256(1)(6),519).
28Seee.
g.
Sections18-19ofthe2002EnterpriseAct,whichwereinsertedinSections47/A-47/Dofthe1998CompetitionAct.
SeealsoGroupLitigationOrdersinSections19.
10.
and19.
11.
oftheCivilProcedureRules.
29ContraCommissionReportontheimplementationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMemberStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p13.
(ConsideringFrench,HungarianandSpanishlawtocontainanopt-insystem.
)30Act444/2007onGroupActions(Ryhmkannelaki).
31GesetzzurEinführungeinerzivilprozessualenMusterfeststellungsklage(MuFKlaGk.
a.
Abk.
).
G.
v.
12.
07.
2018BGBl.
IS.
1151(Nr.
26).
32SeeLawNo99of23July2009.
33ChapterXXIV1,Section441117oftheLithuanianCodeofCivilProcedurewiththelatestamendmenton8November2016No.
XII-2751.
34ActVIof2012.
Seehttp://www.
justiceservices.
gov.
mt/DownloadDocument.
aspxapp=lom&itemid=11910&l=1.
Accessed20April2019.
35Actof17December2009onPursuingClaimsinGroupProceedings(Ustawazdnia17grudnia2009r.
odochodzeniuroszczenwpostepowaniugrupowym),JournalofLawsfrom2010,No.
7,item44.
ThelawwascomprehensivelyamendedbyActof7April2017amendingdifferentlawsinordertofacilitaterecoveryofdebts—(Ustawazdnia7kwietnia2017r.
ozmianieniektórychustawwceluuatwieniadochodzeniawierzytelnosci),publishedinDziennikUstaw(JournalofLaws)of2017,item933.
Theamendmentsenteredintoforceon1June2017.
36GroupProceedingsAct,SFS2002:599.
765EuropeanModelsofCollectiveActionsFig.
5.
1TheEuropeancollectiveactionlandscape(grey:solelyopt-incollectiveactionsareavail-able,black:opt-outcollectiveactionsareavailable)forcollectivemonetaryclaims,eventhoughcollectiveproceedingsareavailableforinjunctionsanddeclaratoryjudgments.
37AlthoughusuallylistedamongEurope'sopt-outcollectiveproceedings,theDutchcollectivesettlementisnotconsideredtobeacollectiveaction,asitmerelyprovidesaframeworkforcaseswherethedefendantconcedesliabilityandisreadytosettle.
In2005,theNetherlandsadoptedtheActonCollectiveSettlementofMassDam-ages(Wetcollectieveafwikkelingmassaschade),38whichisapplicable(asitsnamesuggests)solelytosettlementsand,accordingly,cannotbeusedtoclaimrecovery.
Thegroupisrepresentedbyasocialorganization,whichmayconcludeasettlement37SeeBritishInstituteofInternationalandComparativeLaw(2017:10)andEuropeanParliament,PolicyDepartmentforCitizens'RightsandConstitutionalAffairs,DirectorateGeneralforInternalPoliciesoftheUnion(2018:18).
38TheActenteredintoforceon27July2005.
ForacomprehensiveanalysisontheAct,seeKrans(2014)andBosters(2017:47–59).
5.
1TheEuropeanLandscape:ToOptinortoOptOut77withthetortfeasor;thesettlementhastobeapprovedbythecourt.
39Groupmembersmayopt-outfromthesettlementwithinthreemonths.
Likewise,regimesprovidingforthedisgorgementofillicitlyobtainedproceedsforthepublicbudgetarenotregardedascollectiveactions,astheyarenotmeanttocompensatethevictims.
Forinstance,Germanlaw,intheeldofantitrustandunfaircompetitionlaw,providesforadisgorgementprocedurewherewrongdoersmaybeenjoinedtosurrendertheillicitlyacquiredeconomicbenets,however,theproceeds,insteadofthevictims,gotothefederalbudget.
Intheeldofunfaircompetitionlaw,certainassociationsmaysueformonetaryreliefequaltotheillicitprots,lessthesumsthewrongdoerpaidbecauseoftheviolation,tothirdpartiesorthestate.
Theassociationmayenforcethecreaming-offclaimwithouttheexpressauthorizationofgroupmembers,however,themoneyawardeddoesnotgotothevictimsbuttothecentralbudget.
40SimilarrulesareembeddedintheGermanAntitrustLaw,whichappliesincaseswheretheGermanFederalCompetitionOfce(Bundeskartellamt)adoptednomeasuretocreamofftheillicitprotsandprovidesthattheOfceshallreimbursetheassociationsfortheircostsup-tothepaymentstheysecuredforthefed-eralbudget.
41Accordingly,thecreaming-offmechanism'sfunctionisnottosecureaprivateremedyfortheinjuredpartiesbuttosupplementpublicenforcement.
42Insamevein,judicialmechanismsthathelptocoordinatetheadjudicationofparallelindividualproceedingsaftertheyhavebeenlaunchedarenotconsideredtobecollectiveactions,astheyarenotrelatedtoaccesstojusticeandarenotaimedatenhancingtheeffectivenessoflaw.
Forinstance,in2005,Germanyintroducedastatutorytest-casemechanismincapitalmarketlawforinvestorclaims.
43However,thismechanismdoesnotuniteindividualclaimstobesubmittedandenforcedjointlybutstreamlinesindividualactionsalreadylaunched.
Itcreatesapossibilitytosuspendindividualactionsandtohavethecommonlegalandfactualissuesdecidedbyasinglecourt.
Asnotedabove,whileEuropeisgenerallyconsideredtofeaturetheopt-inscheme,thisobservationisonlypartiallyvalid.
Ontheonehand,itistruethatrepresentationwithoutauthorizationisgenerallydisapprovedtakingintoaccountthatin40%oftheMemberStatessolelytraditionaljoinderofpartiesandassignmentofclaimsare39TheapprovalofthesesettlementscomesunderthecompetenceoftheCourtofAppealsinAms-terdam.
40Section10oftheGermanActagainstUnfairCompetition(GesetzgegendenunlauterenWettbe-werb—UWG),GesetzgegendenunlauterenWettbewerbinderFassungderBekanntmachungvom3.
Mrz2010(BGBl.
IS.
254),lastamendedthroughSection4ofGesetzvom17.
Februar2016(BGBl.
IS.
233).
41Section34aoftheGermanActagainstRestrictionsofCompetition(GesetzgegenWettbewerb-sbeschrnkungen—GWB),GesetzgegenWettbewerbsbeschrnkungeninderFassungderBekan-ntmachungvom26.
Juni2013(BGBl.
IS.
1750,3245),lastamendedthroughSection5ofGesetzvom13.
Oktober2016(BGBl.
IS.
2258).
42Cf.
Stadler(2009:117).
43LawonModelProceedingsinCapitalMarketDisputes(GesetzüberMusterverfahreninkapital-marktrechtlichenStreitigkeiten—KapMuG),adoptedonAugust16,2005(BGBl.
IS.
2437).
SeeHalfmeierandFeess(2012),Steinberger(2016:44–132)andBosters(2017:27–34).
785EuropeanModelsofCollectiveActionsavailableasameanstobringcollectiveclaimstocourt.
Ontheotherhand,fromthe17MemberStateswhichcreatedaspecialregimeforcollectivelitigation,only7stuckfullytotheopt-inprinciple.
The2002SwedishActonGroupProceedings44isoneoftherstcomprehensivenationalcodicationsofcollectiveactionsthatcoveredthewholespectrumofcivilclaims(andnotonlyspecicsectorsorbranchesoflaw).
45TheSwedishActenteredintoforceon1January2003.
Althoughitadoptsanopt-insystem,theavailablesta-tisticaldatasuggeststhattheSwedishGroupProceedingsActisrelativelyeffective:17groupproceedingswereinitiateduntilthebeginningof2014(thatis,intherst12yearsofthelaw).
46Thesemattersincludetheenforcementofairpassengers'rights,claimsbyinsuranceholders,aprocedureagainsttheSwedishstateforviolat-ingEUlaw,overchargesconcerningelectricitysupply(violationofxeduniversalserviceprices).
47TheFinnishparliamentadoptedtheActonCollectiveProceedingsinFebruary2007,after15yearsofsocialdebate48;theActcameintoforceon1October2007.
49ThecentralfeatureoftheFinnishsystemisthatiscreatesanopt-insystem50empow-eringexclusivelytheConsumerOmbudsmantoinstituteacollectiveaction51inmat-terscomingunderitscompetence(consumermatters).
52Untilrecently,therehasbeennoproceedingsinstitutedonthebasisoftheFinnishAct53;thismaybeexplainedwiththeopt-inruleandwiththefactthatcollectiveactionsmaybelaunchedexclusivelybytheConsumerOmbudsman.
54Ofcourse,thelackofcasesdoesnotnecessarilymeanthattheFinnishActhasbeendevoidofimpactonthebehaviorofenterprises.
5544GroupProceedingsAct,SFS2002:599.
Forthenon-ofcialtranslationoftheAct,seehttps://www.
government.
se/government-policy/judicial-system/group-proceedings-act/andhttp://www.
courdecassation.
fr/IMG/File/loi_suedoise_swedish_law_eng.
pdf.
Accessed20April2019.
TheActenteredintoforceon1January2003.
Foracomprehensiveanalysisofthedraftversion,seeLind-blom(1997:824–830),Nordh(2001:395–402),Lindblom(2007)andPersson(2012).
45Sections1-2oftheSwedishActonGroupProceedings.
46Ervo(2016:188).
SeealsoErvoetal.
(Unknown).
47Lindblom(2008:2–7)(reporting12cases.
).
Cf.
Persson(2008:17)(reporting11cases).
48Act444/2007onClassActions(Ryhmkannelaki),foranunofcialEnglishtranslationoftheAct,seehttp://www.
nlex.
//laki/kaannokset/2007/en20070444.
pdf.
Accessed20April2019.
ForananalysisontheAct,seeViitanen(2007).
49Section19oftheFinnishActonClassAction.
50Section8(1)oftheFinnishActonClassAction.
51Section4oftheFinnishActonClassAction.
52TheActisnotapplicabletocapitalmarketmatters.
53Ervo(2016:189)andKiurunen(2012:226).
54Vlimki(2007)andViitanen(2008:2).
55Itmaybeusedasaleveragetocompelasettlement.
See"CarunaandtheConsumerOmbudsmanreachedanegotiatedsolution—noneedforaclassactionlawsuit,butchangesintheElectricityMar-ketActstillintheagenda".
http://www.
hankintajuristit.
/caruna-and-the-consumer-ombudsman-reached-a-negotiated-solution-no-need-for-a-class-action-lawsuit-but-changes-in-the-electricity-market-act-still-in-the-agenda/.
Accessed20April2019.
5.
1TheEuropeanLandscape:ToOptinortoOptOut79TheItalianlegislatorenactedalawoncollectiveactionsinDecember2007byinsertingSection140bisintheItalianConsumerCode.
56Theseruleswere,never-theless,replacedbyanewSection140bis,57whichenteredintoforceon1January2010.
58Contrarytotherulesof2007,whichreferredtothe"collectiveinterests"ofgroupmembers,accordingtotherulesof2009,thecollectiveactionaimstoprotectthe"individualinterests"ofgroupmembers.
In2012,oneofthepre-requisitesofcollectiveactionwassoftened:asfrom25March2012,itsufcesiftherightsofgroupmembersare"homogeneous",theydonothavetobe"identical"anymore.
59TheItalianclassactionmaybeusedonlyforpursuingconsumerclaimsarisingfromspeciccases:standardcontractualtermsandconditions,defectiveproductsandservices,unfaircommercialpracticesandanticompetitiveconducts.
60Accordingtopubliclyavailablesources,58classactionshadbeenlaunchedunderthisprovisionuntilJanuary2016,althoughaconsiderablepartofthemwasdeclaredinadmissibleandthevastmajorityofthemispending.
61Polandintroducedcollectiveactionsin2009(ActonPursuingClaimsinGroupProceedings).
Theseruleswentintoeffecton19July2010.
62TheActunderwentsignicantchangesin2017,63whichenteredintoforceon1June2017.
Theregimeinitiallyappliedtoconsumerlaw,productandtortliability(withtheexceptionoftheprotectionofpersonalinterests).
In2017,itwasextendedtoclaimsresultingfromthenon-performanceorundueperformanceofanobligation,unjustenrichmentandcertaininfringementsofpersonalinterests(bodilyinjuryorhealthdisorder).
64TheActfollowstheopt-inprinciple.
65Membersmayjointhegroupafterthecourtcertiesit.
66Standingisconferredonclassmembersandtheregionalconsumer56Act244of24December2007.
ForacomprehensiveanalysisoftheItalianlegislation,seeCaponi(2011a:61),Caponi(2011b)andErnestoandFernando(2012).
57Act99of23July2009.
http://www.
tedioli.
com/Italian_class_action_text_english_version.
pdf.
Accessed20April2019.
58InrespectoftheItalianlegislation,seeSilvestri(2007a,b,2008).
59Lawno.
27dated24March2012undertheheading"Rulestomakeclassactionseffective".
60Section140bis(2)oftheItalianConsumerCode;Principe(2012).
Recently,inAdusbefvMontedeiPaschidiSiena,thecourtofappealsofFlorenceheldthatretailinvestorsarenotconsumersand,hence,arenotcoveredbytheItalianclassactionlegislation.
Afferni(2016:82,85).
61Seetheoverviewprovidedathttp://www.
osservatorioantitrust.
eu/it/azioni-di-classe-incardinate-nei-tribunali-italiani/.
Accessed20April2019.
Formoreinformationonthecase-law,seehttp://www.
collectiveredress.
org/collective-redress/reports/italy/caselaw.
Accessed20April2019.
62Actof17December2009onPursuingClaimsinGroupProceedings(Ustawazdnia17grudnia2009r.
odochodzeniuroszczenwpostepowaniugrupowym).
JournalofLawsfrom2010,No.
7,item44.
63Actof7April2017amendingdifferentlawsinordertofacilitaterecoveryofdebts—(Ustawazdnia7kwietnia2017r.
ozmianieniektórychustawwceluuatwieniadochodzeniawierzytelnosci),publishedinDziennikUstaw(JournalofLaws)of2017,item933.
64Sections1(2)and1(2)(a)–(b)ofthePolishActonPursuingClaimsinGroupProceedings.
65Sections6(2),11and13(2)ofthePolishActonPursuingClaimsinGroupProceedings.
66Section11(1)ofthePolishActonPursuingClaimsinGroupProceedings.
805EuropeanModelsofCollectiveActionsombudsman(apublicbody).
67Notwithstandingtheopt-inrule,thePolishsystemhasproducednumerouscases.
68Maltaintroducedopt-incollectiveactionsin2012coveringtheviolationsofcon-sumerprotection,competitionandproductsafetylaw.
69Groupmembersmayjointheactionwithinthedeadlinespeciedbythecourt.
70Itappearsthatsofartwocaseshavebeenlaunched.
71Lithuaniaintroducedcollectiveactionsin2015.
72TheregimewasinsertedintotheLithuanianCodeofCivilProcedure73(articles4411toarticle44117).
74Theactintroducedanopt-inschemeofgeneralapplicationhavingahorizontalapproach.
SofartheLithuanianruleshavebeenappliedinahandfulofcases.
75Germanyintroduceda"modeldeclaratoryclaim"(Musterfeststellungsklage)in2018,whichwasinsertedasBook6(Sections606-614)intheCodeofCivilPro-cedure(Zivilprozessordnung).
76Thecollectiveaction,whichenteredintoforceon1November2018,createdanopt-inschemeforconsumermatters.
AsapeculiarfeatureoftheGermanysystem,courtshavenopowertoawarddamagesbutmayenteradeclaratoryjudgmentastothepre-conditionsofliability(theymayestablishthattheclaim'sorlegalrelationship'sfactualandlegalpre-conditionsexistordonotexist).
77Groupmembersmayseekmonetaryrelief,onanindividualbasis,afterthepre-conditionsofthedefendant'sliabilityhavebeenestablished.
Thenaldeclaratoryjudgmentisbindingoncourtsinmattersbetweenthedefendantandthoseconsumerswhooptedin,providedthesehavethesameaimandconcernthesamefactpatternasthecollectivedeclaratoryjudgment.
78Sincethelaw'sveryrecententryintoforce,the67Section4(2)ofthePolishActonPursuingClaimsinGroupProceedings.
68SeethestatisticsofthePolishMinistryofJusticefortheperiodbetween2010and2016,Pozwyzbiorowewlatach2010–2016,athttps://isws.
ms.
gov.
pl/pl/baza-statystyczna/opracowania-wieloletnie/download,2853,32.
html.
Accessedon20April2019.
69Articles3-4andScheduleAoftheMalteseCollectiveProceedingsAct.
70Articles2(denitionofrepresentedperson),7-8and18oftheMalteseCollectiveProceedingsAct.
71BritishInstituteofInternationalandComparativeLaw(2017)217.
72Ithastobenotedthatgroupactionsweretheoreticallyavailablealsobefore2015.
Section49(6)oftheLithuanianCodeofCivilProcedure,introducedin2003,madeprovisionforgroupactionsincaseitwasnecessarytoprotectthepublicinterest.
However,asconrmedbyrulingNr.
2-492/2009oftheCourtofAppealofLithuania,thisprovisioncouldnotbeputintopracticeasitwasnotaccompaniedbyaneffectiveimplementationmechanism.
NewChapterXXIV1onCollectiveRedresswasinsertedintotheCodeofCivilProcedurewhichcameintoeffecton1January2015andrepealedSection49(6).
SeeJuka(Unknown).
73Section441117oftheLithuanianCodeofCivilProcedure.
74ForanEnglishversionofthe2015LithuanianClassActionActseeRenataJuzikienè'sunofcialtranslationathttp://globalclassactions.
stanford.
edu/sites/default/les/documents/Class_Action_Lithuania.
pdf.
Accessed20April2019.
Inthefollowing,thequotesfromtheLithuanianlegislationrefertotheforegoingtranslation.
75SeeJuka(Unknown).
76SeeHalfmeier(2017)andSchfer(2018).
77Section606(1)oftheGermanCodeofCivilProcedure.
78Section613(1)oftheGermanCodeofCivilProcedure.
5.
1TheEuropeanLandscape:ToOptinortoOptOut81institutionofthreecaseshasbeenpublished79;therst"modeldeclaratoryclaim"(emergingfromVolkswagen'snotoriousdieselemissionsscandal)80wassubmittedontheverydaywhentherulesenteredintoforce.
IntheEU,thereare10MemberStateswhichhavesanctioned(atleastpartially)anopt-outscheme.
Fourofthesecombinetheopt-inandtheopt-outruleandleaveittothejudgetodecideunderwhichschemetocarryoutthecollectiveaction.
81TheDanishrulesoncollectiveactionareapplicabletoproceedingsinstitutedasfrom1January2008.
82Itisuptothecourttodecidewhethertocarryouttheactionintheopt-inortheopt-outscheme.
However,thevalueofthisexibilityissignicantlyreducedbythefactthattheopt-outschemecanbeusedonlyifthegrouprepresentativeisanadministrativeagency.
83Thecourtdecidesfortheopt-outpatterniftheclaims'individualenforcementisnotfeasibleduetotheirlowmonetaryvalueanditmaybeassumedthattheopt-inpatternwouldnotbeappropriateformanagingtheclaims.
Accordingtothetravauxpréparatoir,themonetaryvalueoftheclaimislowifitdoesnotinvolvemorethanDKK2000(approximatelye270).
84Ifthecourtadoptstheopt-outpattern,adeadlineissetforgroupmemberstoabandonthecollectiveaction.
Untilrecently,therehasbeenninecaseslaunchedonthebasisoftheDanishActonClassAction.
85Inthesamevein,inBelgium,86itisuptothecourt'sdiscretionwhethertocertifythecollectiveactionundertheopt-inortheopt-outscheme.
87However,groupmem-bersresidinghabituallyorhavingtheirprincipalplaceofbusinessoutsideBelgiumarecoveredonlyiftheyoptin.
88Furthermore,onlytheopt-inschememaybeusedincaseofphysicalandmoraldamages.
8979Seetheregistryof"modeldeclaratoryclaim"cases(RegisterfürMusterfeststellungsklagen)oftheGermanfederalministryofjusticeathttps://www.
bundesjustizamt.
de/DE/Themen/Buergerdienste/Klageregister/Allgemeines_node.
html.
Accessedon20April2019.
80Weimann(2018:38).
Interestingly,whilefacingtechnicalhurdlesinGermany,inthedieselemissionscaseanopt-outcollectiveactionwaslaunchedinBelgium.
Staudt(2019:157).
81Forascholarlyproposalsuggestingthatthechoicebetweentheopt-inandtheopt-outschemeshouldbemadedependentonthesumoftheclaims,seeNeumannandMagnusson(2011:169–170).
82ForanEnglishsummaryoftheDanishlegislation,seeWerlauff(2008).
83AlthoughitisnotanEUMemberState,itisnoteworthythattheNorwegianrulesoncollectiveactionsenteredintoforceonthesamedayastheirDanishcounter-parts.
TherulesoncollectiveproceedingswereincludedinChapter35oftheDisputeAct.
ForanEnglishtranslationoftheNorwegianrules,seehttp://globalclassactions.
stanford.
edu/sites/default/les/documents/Norway_Legislation.
pdf.
Accessed20April2019.
Thetwosystemsfollowroughlythesamemodel:bothcombinetheopt-inandtheopt-outschemeandleavethechoicebetweenthetwotothecourt.
84Mgelvang-Hansen(2008:5)andNielsenandLinhart(2012:236).
85SeeErvo(2016:189).
86SeeLafneurandRenier(2016).
87Foranoverview,seeParis(2015:23–24).
88SectionsXVII.
38andXVII.
43oftheBelgianCodeonEconomicLaw(Codededroitéconomique).
89SectionXVII.
433°oftheBelgianCodeonEconomicLaw.
825EuropeanModelsofCollectiveActionsIntheUnitedKingdom,duetoamechanismintroducedin2015,90opt-outclassactionsareavailableincompetitionmattersanditisuptotheCompetitionAppealTribunal(CAT)todecidewhethertheprocedurewillbecarriedoutintheopt-inortheopt-outscheme.
91ItisworthyofnotethatclassmembersdomiciledoutsidetheUnitedKingdomhavetoopt-in,eveniftheCATchosetheopt-outschemeforthecase.
TheCompetitionActdoesnotsetoutthefactorstheCAThastotakeintoaccountwhenexercisingitsdiscretion,however,theCompetitionAppealTribunalRulesof2015listtwoconsiderations:"thestrengthoftheclaims"and"whetheritispracticablefortheproceedingstobebroughtasopt-incollectiveproceedings,havingregardtoallthecircumstances,includingtheestimatedamountofdamagesthatindividualclassmembersmayrecover.
"92TheCAT's2015Guidetoproceedings93ampliestheserequirements.
Withoutcarryingoutafullmeritsassessment,theCAT"willusuallyexpectthestrengthoftheclaimstobemoreimmediatelyperceptibleinanopt-outthananopt-incase,sinceinthelattercase,theclassmembershavechosentobepartoftheproceedingsandmaybepresumedtohaveconductedtheirownassessmentofthestrengthoftheirclaim.
(…)Forexample,wheretheclaimsseekdamagesfortheconsequenceofaninfringementwhichiscoveredbyadecisionofacompetitionauthority(follow-onclaims),theywillgenerallybeofsufcientstrengthforthepurposeofthiscriterion.
"Astowhetheritispracticablefortheproceedingstobebroughtintheopt-inscheme,theCAT"willconsiderallthecircumstances,includingtheestimatedamountofdamagesthatindividualclassmembersmayrecoverindeterminingwhetheritispracticablefortheproceedingstobecertiedasopt-in.
"Ithastobeemphasizedthat"[t]hereisageneralpreferenceforproceedingstobeopt-inwherepracticable.
""Indicatorsthatanopt-inapproachcouldbebothworkableandintheinterestsofjusticemightincludethefactthattheclassissmallbutthelosssufferedbyeachclassmemberishigh,orthefactthatitisstraightforwardtoidentifyandcontacttheclassmembers.
"InSlovenia,thelawoncollectiveactionswasadoptedin2017(andenteredintoforceinApril2018).
94Itleavesthechoicebetweentheopt-inandtheopt-outschemetothecourt.
95Theopt-insystemhastobeusedifnon-pecuniarydamagesareinvolvedorifatleast10%ofgroupmembershasaclaiminvalueexceedingEUR2000.
Nonetheless,eveniftheopt-outsystemischosenbythecourt,groupmembersnotdomiciledinSloveniacanbecomepartoftheproceedingsonlyiftheyoptin.
9690ConsumerRightsAct2015.
Foracomprehensiveanalysis,seeRodger(2015).
91Section47/B(7)(c)ofthe1998CompetitionAct.
SeeSection47/B(10)–(11).
92Section79(3)ofCompetitionAppealTribunalRules2015,StatutoryInstrument2015/1648.
93Section6.
39of2015CompetitionAppealTribunal,Guidetoproceedings.
http://www.
catribunal.
org.
uk/les/Guide_to_proceedings_2015.
pdf.
Accessed20April2019.
94SeeFootnote26.
95Article29oftheSlovenianLawonCollectiveActions.
SeeBritishInstituteofInternationalandComparativeLaw(2017:14–15)andSladiˇc(2018:214).
96Article30oftheSlovenianLawonCollectiveActions.
5.
1TheEuropeanLandscape:ToOptinortoOptOut83SevenMemberStatesprovideforthestatutoryrighttoopt-outcollectivelitigation(inEnglandthisoperatesinadditiontotheforegoingcompetitionlawmechanismcombiningtheopt-inandtheopt-outsystem).
97Greeceintroducedopt-outcollectiveactionsveryearly,in1994,intheeldofconsumerprotection.
98Thisvestscertiedconsumerprotectionorganizationswithstandingtoclaimdamagesonbehalfofagroupofinjuredconsumers.
Sinceitsintroduction,thismechanismhasproduced,onaverage,2–3casesperannum.
99ThePortuguesecollectiveactionlawdatesbackto1995,longbeforethisquestionbecamesotopicalinEurope,andhasaconstitutionalbasis.
100ThePortuguesepro-visionshaveageneralapplicationandenableactionsforanycivilclaim,includingnancialrelief.
Thegeneralrulesonpopularactions(acopopular)areincludedinAct83/95andspecialprovisionsaretobefoundinparticularelds,e.
g.
LawNo.
19/2014of14AprilonEnvironmentPolicy,LawNo.
24/96of31JulyonConsumerProtection,LawNo.
107/2001of8SeptemberontheCulturalHeritage,SecuritiesCodeandLaw23/2018of5JuneonAntitrustDamagesActions.
Notwithstandingtheopt-outrule,thePortuguesepopularactionseemsnottobeparticularlysuccess-ful101;theinformationavailablesuggeststhatthelaw'srstdecadesawonlyafewcollectiveproceedings.
102TheSpanishsystem103isamixedopt-in-opt-outschemewitharestrictedsectoralapproach(itappliesonlytoconsumermatters).
104In2007,asimilarprovisionwasinsertedastomattersconcerningequaltreatmentbetweenmenandwomen.
105Onlysomecollectivecaseshavemadetheirwaytocourtoverthelastthirtyyears,mostlyinjunctiveactions.
Collectiveactionsarerareinpracticeduetotheircostandthedifcultyinvolved,rst,inlegallyunderstandingwhatisneededtoproceedwiththeaction,and,second,ingatheringgroupmembersandevidenceandadministeringenforcement.
Intherecentyears,anincreasehasbeenobservedasaresultoftheeconomicdownturn.
106Notwithstandingthenon-exhaustiveanduncertainregulation97Asnotedabove,fromthesetheUnitedKingdomalsohas,intheeldofcompetitionlaw,aschemeleavingthedecisionbetweentheopt-inandopt-outschemetothejudge.
98SeeFootnote23.
99Emvalomenos(2016:6).
100Section52(3)ofthePortugueseConstitution.
101SeeTortell(2008:2–3,5)andRossiandFerro(2013:37–38).
102Tortell(2008:10).
Cf.
RossiandFerro(2013:65–66).
103Section11ofSpanishCodeonCivilProcedure(Ley1/2000,de7deenero,deEnjuiciamientoCivil).
ForanEnglishtranslationoftheSpanishprovisions,seedeCabiedesHidalgo(2007a),forananalysisoftheSpanishsystem,seedeCabiedesHidalgo(2007b).
CollectiveactionshavebeenpartofSpanishlawsince1984.
SeePieiro(2016:88).
104GomezandGili(2008:6–7).
105Section11bisintroducedbyL.
O.
3/2007,de22demarzo,paralaigualdadefectivademujeresyhombres(B.
O.
E.
23marzo).
106SeePieiro(2015:1055–1088).
845EuropeanModelsofCollectiveActionsoftheeld107andtheabsenceofasettledpractice,10849collectiveproceedingshavebeenrecordeduntil2008.
109InHungarianlaw,opt-outcollectiveactionmechanismsexistincompetitionlawandconsumerprotectionlaw,whileanopt-injointactionschemewasintroducedbythenewHungarianCodeofCivilProcedureastocertainsubject-matters(consumerprotection,employmentmattersandenvironmentaldamages).
110Althoughtheopt-outmechanismhasbeeninforcefortwodecades,ithasproducedonlyasinglepublishedcasewheremonetaryreliefwasawarded.
111Bulgariaadoptedanopt-outclassactionschemeinitsCodeofCivilProcedureof2007.
112However,courtscontinuouslyapplyhighrequirementsonclassformationandrepresentation,effectivelytransformingtheprocedureintoanopt-insystem,withtheexceptionwheretheplaintiffisapublicauthority(theCommissiononConsumerProtection)orarepresentativeconsumerassociationpursuinginjunctivemeasures.
113Intermsofstatutorylanguage,theregimemaycoverallviolationsoflaw,thoughthecase-lawhasthetendencytolimitthescopetonon-contractualviolations.
114Besidesconsumerassociations'usualpowertorequestaninjunctionoradeclara-toryjudgmentonanopt-outbasis,115theFrenchConsumerCode(Codedelacon-sommation)containstwopatternsofcollectiveactionwheremonetaryreliefmaybesought.
First,in1992anopt-inschemewasinsertedintotheConsumerCode(actionenreprésentationconjointe),116andsubsequentlyintroducedastoothermat-ters(investorprotection,117environmentalprotection).
Thisappearedtobelessef-cientgiventhatitproduced,intherstoneandahalfdecadeofitshistory,only107SeeGomezandGili(2008:3).
(Nospecialprocedurewasintroducedforcollectiveproceedingsandtherespectiverulesaresometimesinconsistent,self-contradictoryandgappy.
)108SeeAlmogueraetal.
(2004:7).
109GomezandGili(2008:51,19–28).
110Sections580-591ofthenewHungarianCodeofCivilProceduretogointoeffecton1January2018(ActCXXXof2016ontheCodeofCivilProcedure,inHungarian:2016.
éviCXXX.
trvényapolgáriperrendtartásról).
SeeSzalai(2017)andUdvary(2018).
111CaseGf.
40336/2008/7(BudapestHighCourtofAppeals),publishedundernrH2009.
125.
112PromulgatedinStateGazetteNo.
59/20.
07.
2007,amendedandsupplementedbySGNo.
50/30.
05.
2008,modiedbyJudgmentNo.
3oftheConstitutionalCourtoftheRepublicofBulgariaof8.
07.
2008–SGNo.
63/15.
07.
2008,amendedbySGNo.
69/5.
08.
2008.
TheclassactionprovisionscanbefoundinChapter33,Sections379-388oftheBulgarianCodeofCivilProcedure.
113Markova(2015:142–152).
114KatzarskyandGeorgiev(2012:64),para1.
2.
115SectionsL621-1-L621-6oftheFrenchConsumerCode(Codedelaconsommation).
TheFrenchCommercialCode(CodedeCommerce)alsoprovidesforthepossibilityofcollectiveactionsinrespectofcertainunfaircompetitionmischiefs;thepublicprosecutor(ministèrepublic),theministerofeconomicaffairsandtheheadofthecompetitioncouncilhavestanding.
SectionL442-6oftheFrenchCommercialCode.
SeeMomègeandBessot(2004:8).
116Loin°92-60,18janv.
1992devenuelesarticlesL.
422-1àL.
422-3duCodedelaconsommation,réd.
Loin°93-949,26juillet1993;R.
422-1à422-10,réd.
Décr.
n°92-1306,11décembre1992.
117L452-2oftheMonetaryandFinancialCode.
SeeMagnierandAlleweldt(2008:7–9).
5.
1TheEuropeanLandscape:ToOptinortoOptOut85afewcases.
118Second,recently,in2014,theFrenchlegislatorinsertedanopt-outcollectiveactionregimeintotheConsumerCode(actiondegroupe),whichappearstobemuchmoreeffectivethantheancienrégime,havingproducedsevencasesintwoyears'time.
Thisregimewasextendedtohealthcaremattersand,in2016,con-vertedintoageneralschemeapplicabletodiscrimination,environmentalprotection,personaldata119andhealthcarematters.
Englishlawprovidesforthreeoptionsforcollectivelitigation:twogeneralpro-ceduraltools(representativeproceedings,grouplitigationorders120)andasectoraltoolincompetitionlaw(where,asnotedabove,itisattheCAT'sdiscretiontochoosetheopt-outscheme).
Althoughrepresentativeproceedingsmaybecarriedoutonanopt-outbasis,theyhaveremainedineffectiveduetothestrictconstructionofthepreconditionsinthejudicialpractice.
5.
2Purview:Step-by-StepEvolutionofaPrecautiousRevolutionMostEuropeancollectiveactionlawshavealimited(sectoral)purview121reectingthenotionthatcollectiveactionsshouldbelimitedtocaseswheretheyarebadlyandobviouslyneeded.
SomeMemberStateshaveused"leapfrogging"toextendtheschemetoothersectorsdemonstratingtheprecautiousapproachoftheEuropeanlegalsystemsastocollectivelitigation.
InGreece,collectiveredressisavailableonlyinconsumerprotectionlaw.
122TheFinnishActonCollectiveProceedingsof2007appliesexclusivelytomatterscomingundertheremitoftheConsumerOmbudsman(consumermatters).
123ItalyintroducedcollectiveactionsintheConsumerCode,124whichmaybeusedtopur-sueconsumerclaimsarisingfromspeciccases:standardcontractualtermsandconditions,defectiveproductsandservices,unfaircommercialpracticesandanti-118SeeMagnier(2007:14).
119Loin°2014-344du17mars2014relativeàlaconsommationetDécr.
n°2014-1081du24sept.
2014relatifàl'actiondegroupeenmatièredeconsommation;Loin°2016-41du26janv.
2016demodernisationdenotresystèmedesantéetDécr.
n°2016-1249du26sept.
2016relatifàl'actiondegroupeenmatièredesanté;Loin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
120Forananalysisofgrouplitigationorders,seeMulheron(2014:94–111).
121CommissionReportontheimplementationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMem-berStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p3.
122Emvalomenos(2016:2);BritishInstituteofInternationalandComparativeLaw(2017:181).
123SeeFootnote51.
124Act244of24December2007andAct99of23July2009.
http://www.
tedioli.
com/Italian_class_action_text_english_version.
pdf.
Accessed20April2019.
865EuropeanModelsofCollectiveActionscompetitiveconducts.
125ThepurviewofMaltesecollectiveactionsisconnedtocertainelds,suchascompetition,consumerprotectionandproductsafetylaw.
126ThePolishregimeintroducedin2009127initiallyappliedonlytoconsumerlaw,productliabilityandtortliability(withtheexceptionoftheprotectionofpersonalinterests)butwasextended,in2017,toclaimsresultingfromthenon-performanceorundueperformanceofanobligation,unjustenrichmentandcertaininfringementsofpersonalinterests(bodilyinjuryorhealthdisorder).
128TheSpanishclassactionrules129applyonlytoconsumermatters.
130In2007,asimilarprovisionwasinsertedastomattersconcerningequaltreatmentbetweenmenandwomen.
131Aftertheintroductionofgroupactionsintheeldofconsumerprotectionin2014132andhealthcareinJanuary2016,133inNovember2016,theFrenchlegislatorcreatedageneralframeworkforgroupactions.
134Thenewregimeextendedthepurviewofthemechanismtodiscrimination,environmentalprotection,personaldataandhealthcarematters;consumermattersarenotconcernedbythegeneralframework.
135Hungaryintroducedopt-outclassactionsin1996intheCompetitionActandthenin1997intheConsumerProtectionAct.
136Interestingly,whiletheoperationofthesesystemsattractednocriticism,thenewHungarianCodeofCivilProcedure,havinggoneintoeffecton1January2018,introducedanopt-inschemeapplicabletoconsumer,employmentandenvironmentaltortmatters.
125Section140bis(2)oftheItalianConsumerCode;Principe(2012).
Recently,inAdusbefvMontedeiPaschidiSiena,thecourtofappealsofFlorenceheldthatretailinvestorsarenotconsumersand,hence,arenotcoveredbytheItalianclassactionlegislation.
Afferni(2016:85).
126SeeFootnote69.
127ActonClassActionsof17December2009(Ustawaodochodzeniuroszczenwpostepowaniugrupowym),publishedinDziennikUstaw),publishedinJournalofLawsof2010,no7;item.
44p.
1.
128NewSections1(2)and1(2)(a)-(b)ofthePolishActonClassActions.
129Section11oftheSpanishCodeofCivilProcedure.
130GomezandGili(2008:6–7).
131Section11bisoftheSpanishCodeofCivilProcedure.
132Loin°2014-344du17mars2014relativeàlaconsommationetDécr.
n°2014-1081du24sept.
2014relatifàl'actiondegroupeenmatièredeconsommation.
133Loin°2016-41du26janv.
2016demodernisationdenotresystèmedesantéetDécr.
n°2016-1249du26sept.
2016relatifàl'actiondegroupeenmatièredesanté.
134Loin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
135Loin°2014-344du17mars2014relativeàlaconsommationetDécr.
n°2014-1081du24sept.
2014relatifàl'actiondegroupeenmatièredeconsommation;Loin°2016-41du26janv.
2016demodernisationdenotresystèmedesantéetDécr.
n°2016-1249du26sept.
2016relatifàl'actiondegroupeenmatièredesanté;Loin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
136ActCLVof1997onconsumerprotection(1997.
éviCLV.
trvényafogyasztóvédelemrol).
5.
2Purview:Step-by-StepEvolutionofaPrecautiousRevolution87TheSlovenianregimeoncollectiveactionsappliestoconsumer,competition,securities,labourandenvironmentallawmatters.
137TheGermanmodeldeclaratoryclaimprocedureintroducedin2018appliessolelytoconsumermatters.
138InEnglishlaw,opt-outrepresentativeproceedingshavebeenavailablelongsince,thoughtheyremainedineffectiveduetothestrictconstructionofthepreconditionsinthejudicialpractice.
139Afterintroducingageneralopt-inproceduraltool(grouplitigationorder),140theEnglishgovernmentrejectedtheintroductionofanopt-outschemeofgeneralapplicationanddecidedtointroducethismechanismonasector-by-sectorbasis.
141Asaresult,anopt-outschemewasmadeavailableincompetitionmatters.
142TheBelgiancollectiveactionwasinitiallyavailableonlyforconsumersbutin2018itwasextendedtoSMEs.
143Itappliestocaseswhereanenterprise144breachesoneofitscontractualobligationsorviolatesoneofthe31(BelgianorEuropean)lawsenumeratedinSectionXVII.
37oftheCodeofEconomicLaw(Codededroitéconomique).
Theseextendtoeldslikebanking,competitionlaw,consumerprotec-tion,energy,insurance,intellectualproperty,passengers'rights,paymentandcreditservices,privacy,productsafetyandprofessionalliability.
145AfewMemberStateshavecollectiveactionregimesofgeneralapplication.
The2002Swedishlawongroupproceedings,introducinganopt-inschemeeffectiveasfrom1January2003,coversthewholespectrumofcivilclaims(andnotonlyspecicsectorsorbranchesoflaw).
146Likewise,thePortuguesecollectiveactionlawof1995hasageneralapplicationandenablesactionsforanycivilclaim,includingnancialrelief,albeitspecialprovisionscanbefoundalsoinparticularelds,e.
g.
LawNo.
19/2014of14AprilonEnvironmentPolicy,LawNo.
24/96of31JulyonConsumerProtection,LawNo.
107/2001of8SeptemberonCulturalHeritage,SecuritiesCodeandLaw23/2018of5JuneonAntitrustDamagesActions.
TheBulgarianopt-out137Article2oftheSlovenianLawonCollectiveActions.
SeeSladiˇc(2018:214);BritishInstituteofInternationalandComparativeLaw(2017:249).
Article2(2)referstoanti-discriminationdisputes,however,italsoprovidesthatinthisregardonlycollectiveinjunctionsarepermissible.
138SeeFootnote77.
139SeeAndrews(2001:253).
140SeeMulheron(2009:427–431).
141TheGovernment'sResponsetotheCivilJusticeCouncil'sReport,ImprovingAccesstoJusticethroughCollectiveActions(2009).
SeeHodges(2010:376–379);Hodges(2009:50–66).
142TheCompetitionAppealTribunalspeciesinthecollectiveproceedingsorderwhethertheprocedurehastobecarriedoutintheopt-inortheopt-outsystem.
Sections47A-49EofCompetitionAct1998,insertedbyPart1ofSchedule8oftheConsumerRightsAct2015.
143Loiportantmodication,encequiconcernel'extensiondel'actionenréparationcollectiveauxP.
M.
E.
,duCodededroitéconomique.
22May2018,MoniteurBelge(M.
B.
)(OfcialGazetteofBelgium,22May2018).
SeeRenier(2018).
144SectionI.
212°oftheBelgianCodeofEconomicLawdenesthegroupasagroupofconsumersorSMEs,whileSectionsXVII.
36andXVII.
38refertoaviolationcommittedbyanenterprise.
145SectionXVII.
37oftheBelgianCodeofEconomicLaw.
146SeeFootnote45.
885EuropeanModelsofCollectiveActionscollectiveactionschemeinsertedintotheCodeofCivilProcedureof2007alsocoversallviolationsoflaw,albeitthecase-lawhasthetendencytolimitthescopetoinjunctivemeasuresconcerningconsumerdisputes.
147TheLithuaniansystemintroducedin2015isalsoofgeneralapplication.
148TheDanishrulesoncollectiveactionshavinggoneintoeffecton1January2008introducedagenerallyapplicablesystemwhereitisuptothejudgetodecidewhethertoapprovethecollectiveactionundertheopt-inortheopt-outscheme.
5.
3Pre-requisitesofCollectiveActionandCerticationThepre-conditionsofcollectiveactioninEuropenormallyextendtothoseofUSclassaction(numerousity,commonality,typicalityandadequaterepresentation),149however,somesystemsgobeyondthisandrequirethatthecollectiveactionsbeexpedientorsuperiortoindividuallitigationandthatthegroupbedenable.
Therequirementofexpediencycontentsitselfwiththatthecollectiveactionisanappro-priatemeanstoenforcetheclaimsofgroupmembers.
Superioritygoesbeyondthisexpectationandrequiresthatacollectiveactionbemoreexpedientthanindivid-uallitigation.
Thelatterhasahighersignicanceinopt-outproceedings:theseareexpectedtobemoreexpedientthanindividualactionsanddenabilityplaysamuchmoreimportantrolehere,asgroupmembersareunknown,thus,thebeneciarieswillhavetobeidentiedonthebasisofthenaljudgment'sgroupdenition.
Ofcourse,legalcounselsmaygoasfaraspossiblewiththecommonquestions,totheextentpermittedbythedenabilityofthegroup,e.
g.
theymayrequestthecourttoestablishthelegalbasis(defendant'sliability)butleavequantumtocollectiveactionscover-ingsub-classesortoindividuallitigation.
Inthissense,duetotherequirementsofsuperiority/expediencyanddenability,thepurviewofEuropeancollectiveactionsismorerestrictedthanthatoftheirUScounterpart.
Itisworthyofnotethatsomeofthelawsdonotspecifyallthetraditionalrequire-mentsofcollectiveaction,suchasnumerousity,superiorityandadequaterepresen-tation.
However,thismaybeduetothecircumstancethatowingtotherulesonscopeandstanding,suchaspecicationmightappeartoberedundant.
Quiteafewsystemslimittheavailabilityofcollectiveactionstoconsumermatterswhereitisassumedthatanumberofvictimsareconcernedandtheyhavesmall-claimswhichwouldbedifculttobringtocourtbutforcollectivelitigation.
Similarly,severalsystemsleantowardsensuringadequaterepresentationthroughlimitingstandingtopublicentitiesandrecognizedcivilorganizationsorthroughgrantingtheseplaintiffsaprivilegedstatus.
InFrance,opt-outcollectiveactionsmaybelaunchedifnumerouspersons(numer-ousity)placedinasimilarsituationsufferdamagescausedbythesameperson,the147KatzarskyandGeorgiev(2012:64),para1.
2.
148Section4411oftheLithuanianCodeofCivilProcedure.
149SeeUdvary(2012:37–40).
5.
3Pre-requisitesofCollectiveActionandCertication89commoncauseofwhichisasimilarbreachoflegalorcontractualobligations(com-monality).
150InGermany,modeldeclaratoryclaimsmaybesubmittedonlybyqualiedcon-sumerprotectionorganizations.
Itisnoteworthythatheightenedrequirementsapplyhere:inadditiontotheconditionsapplicabletoorganizationseligibletolaunchactionsforaninjunction,organizationsengaginginactionsforcompensationneedtofulllextrarequirements(adequaterepresentation).
151Furthermore,thematteriseligibleif,atthetimeofsubmission,itissubstantiatedthatitconcernsatleast10consumersandwithintwomonthsaftertheprocedure'spublicationatleast50consumersregistertheircases(numerousity).
152UnderGreeklaw,consumers'associationsmaybringconsumercollectiveactions"fortheprotectionofthegeneralinterestsoftheconsumingpublic"orif"anillegalbehaviorhurtstheinterestsofatleastthirty(30)consumers.
"153InPoland,thecourtcertiesacollectiveactionifthefollowingconditionsaremet:–numerousity(thegroupshallconsistofatleast10people)154;–commonality(theclassactionhastocoverclaimsofthesamekindandwiththesameorsimilarfactualbasis)155;–thePolishActcontainsanidiosyncraticrequirementwhichmayberegardedasanemanationoftherequirementofcommonality:ifalaw-suitconcernsamonetaryclaim,acollectiveactionmaybelaunchedonlyiftheamountsclaimedbyindi-vidualgroupmembersareequal;however,representativeplaintiffsmayobviatetheproblemsemergingfromthisrequirementthroughformingsub-classesandrequestingadeclaratoryjudgment.
156Section140bisoftheItalianConsumerCodeestablishesthefollowingpre-conditionsforcollectiveactions:–primafaciecase(theclaimisnotmanifestlyunfounded);–numerousity(anumberofconsumersisinvolved);–homogeneity(theindividualrightstobeenforcedarehomogeneous);–adequaterepresentation(thereisnoconictofinterestbetweenthegrouprep-resentativeandgroupmembersandthegrouprepresentativeshallbecapableofrepresentingthegroupadequately).
157150"Lorsqueplusieurspersonnesplacéesdansunesituationsimilairesubissentundommagecauséparunemêmepersonne,ayantpourcausecommuneunmanquementdemêmenatureàsesobli-gationslégalesoucontractuelles,uneactiondegroupepeutêtreexercéeenjusticeauvudescasindividuelsprésentésparledemandeur.
"Section62ofLoin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle.
151Section606(3)1oftheGermanCodeofCivilProcedure.
152Section606(3)2-3oftheGermanCodeofCivilProcedure.
153Articles10(16)ofLaw2251/1994onConsumers'Protection.
154Section1(1)ofthePolishActonPursuingClaimsinGroupProceedings.
155SeeFootnote154.
156Sections2(1)and2(2)ofthePolishActonPursuingClaimsinGroupProceedings.
157Section140-bis(6)oftheItalianConsumerCode.
905EuropeanModelsofCollectiveActionsInMalta,thecourtcerties158"theproceedingsasappropriateforcollectiveproceedings"ifthey"raisecommonissues"(commonality)159and"arethemostappropriatemeansforthefairandefcientresolutionofthecommonissues"(supe-riority).
160Interestingly,thelawexpresslyexcludestherequirementofnumerousitywhenitprovidesthat"theproceedingsarebroughtonbehalfofanidentiedclassoftwoormorepersons.
"Thelawsetsoutrequirementsastotheadequacyofgrouprepresentation:aregisteredconsumers'association(oradhocconstitutedbody)oragroupmembermaybeapproved,ifthecourt"issatisedthattheclassrepresentative(a)wouldfairlyandadequatelyactintheinterestsoftheclassmembers;and(b)doesnothave,inrelationtothecommonissuesfortheclassmembers,amaterialinterestthatisinconictwiththeinterestsoftheclassmembers.
"161AcollectiveactionmaybelaunchedinBulgaria,ifthefollowingrequirementsaremet:–commonality(acollectiveactionmaybecertiedifgroupmembers'commoninterestswereimpairedbythesameinfringementandthismaygiverisetosimilarlegalconsequencesforallofthem)162;–denability(groupmembersareidentiable)163;–adequaterepresentation(ithastobeprovedthatthegrouprepresentativehasthecapacity"toprotecttheharmedinterestseriouslyandingoodfaith,aswellastoincurthechargesrelatedtotheconductofthecase,includingthecosts").
164TherequirementofnumerousitydoesnotappearintheBulgarianCodeonCivilProcedure.
165InSweden,theinstitutionofgroupproceedingsissubjecttothefollowingpre-conditions.
158Article9(1)oftheMalteseCollectiveProceedingsAct.
159Article2oftheMalteseCollectiveProceedingsActdenestheterm"commonissues"asfollows:"(i)commonbutnotnecessarilyidenticalissuesoffact,or(ii)commonbutnotnecessarilyidenticalissuesoflawthatarisefromcommonbutnotnecessarilyidenticalfacts.
"Article10providesthat"[t]hecourtshallnotrefusetodecreeproceedingsascollectiveproceedingssolelyonanyofthefollowinggrounds:(a)theclaimrequiresindividualassessmentafterdeterminationofthecommonissues;(b)theclaimrelatestoseparatecontractsinvolvingdifferentclassmembers;(c)theamountandnatureofthedamagessoughtvaryamongthedifferentclassmembers.
"160Astosuperiority,amongothers,thefollowingcircumstancesneedtobetakenintoaccount:"(a)thebenetsoftheproposedcollectiveproceedings;and(b)thenatureoftheclass.
"Article9(2)oftheMalteseCollectiveProceedingsAct.
161Article12oftheMalteseCollectiveProceedingsAct.
162KatzarskyandGeorgiev(2012:64–65),para1.
6.
163Section379(1)oftheBulgarianCodeofCivilProcedure.
164Sections380(3)and381(1)oftheBulgarianCodeofCivilProcedure.
Therequirementofnan-cialabilityplayedacentralroleinacasewheretheclassactioninitiatedbyaconsumerassociationagainstaleasingcompanywasdismissedwhenthecourtestablishedthattheplaintiffheldalittlemorethanBGN3400(approximatelye1700)initsbankaccount.
Thiswasdeemedinsufcientinthecase,whichconcernedover30,000leasecontracts.
Rulingno5951of14November2016oncaseno.
7904/2013ofSoaCityCourt,CommercialDivision,panelVI-9.
165SeeSection379oftheBulgarianCodeofCivilProcedure;KatzarskyandGeorgiev(2012:64),para1.
5.
5.
3Pre-requisitesofCollectiveActionandCertication91–commonality("theactionisfoundedoncircumstancesthatarecommonorofasimilarnaturefortheclaimsofthemembersofthegroup");–expediency("groupproceedingsdonotappeartobeinappropriateowingtosomeclaimsofthemembersofthegroup,asregardsgrounds,differingsubstantiallyfromotherclaims");–superiority("thelargerpartoftheclaimstowhichtheactionrelatescannotequallywellbepursuedbypersonalactionsbythemembersofthegroup");–denability("thegroup,takingintoconsiderationitssize,ambitandotherwise,isappropriatelydened");–adequaterepresentation("theplaintiff,takingintoconsiderationtheplaintiff'sinterestinthesubstantivematter,theplaintiff'snancialcapacitytobringagroupactionandthecircumstancesgenerally,isappropriatetorepresentthemembersofthegroupinthecase").
166InFinland,collectiveproceedingsmaybelaunchedinconsumermatters,ifthefollowingrequirementsaremet:–numerousity("severalpersonshaveclaims");–commonality("severalpersonshaveclaimsagainstthesamedefendant,basedonthesameorsimilarcircumstances");–expediency("thehearingofthecaseasaclassactionisexpedientinviewofthesizeoftheclass,thesubject-matteroftheclaimspresentedinitandtheproofofferedinit");–denability("theclasshasbeendenedwithadequateprecision").
167InDenmark,acollectiveactionmaybeinitiated,ifthefollowingsubstantivecondi-tionsaremet:–commonality(thepartiesdisposeofacommonclaimarisingfromthesamefactualandlegalbasis);–superiority(thecollectiveactionisthebestmechanismtosettletheclaims;thisconditionismet,ifthecollectiveactionismoreexpedientthantraditionaljoinderofparties);–denability(groupmembersareidentiableandmaybeinformedinanappropriatemanner);–technicality(thejudgedisposesoftheexpertiserequiredtoadjudicatetheclaims);–adequaterepresentation(anappropriatepersoncanbeappointedasthegroup'srepresentative).
168166Section8oftheSwedishGroupProceedingsAct.
167Section2oftheFinnishActonClassAction.
168Mgelvang-Hansen(2008:4).
925EuropeanModelsofCollectiveActionsInHungary,thepre-conditionsofcollectiveactionundertheCompetitionActandtheConsumerProtectionActmaybeboileddowntothefollowingrequirements169:–numerousity(theviolationconcernsnumerousconsumers);–denability(thevictimsoftheviolationareidentiableonthebasisofthecircum-stancesoftheviolation);–adequaterepresentationisnotexpresslyrequired,however,asstandingisconferredsolelyonpublicbodiesandrecognizedconsumerrightsorganizations(ontheHungarianCompetitionOfceastotheCompetitionActandontheconsumerprotectionagency,thepublicprosecutorandconsumerrightsorganizationsastotheConsumerProtectionAct),suchaspecicationseemstoberedundant.
UnderthenewHungarianCodeofCivilProcedure,thecourtcertiesanopt-incollectiveaction,ifthefollowingconditionsaremet170:–numerousity(thejointactionmaybecertied,ifatleast10plaintiffsjoin)171;–commonality—identity(theplaintiffsmaybringtocourtoneormorerightsthatare,intermsofcontent,identicalinrelationtoallplaintiffs—"representativeright"—,ifthefactssustainingtherepresentativerightare,inessence,thesameinrelationtoallplaintiffs(representativefacts)anditcanbeprovedthattheindividualplaintiffsareentitledtotherepresentativeright—"linking")172;–superiority(thecourtmaydeclinetherequestforcertication,ifitisnotreason-abletocertifythecollectiveactiongiventhattheburdenintermsofworkandtimerelatedtotheaction'scollectivenaturewouldbesohugethatthecollectiveproceedings'efciencybenetswouldlikelyvanish).
173InLithuania,theCodeofCivilProcedureestablishesthefollowingpreconditionsforcollectiveactions174:–numerousity("anactionshallbelodgedbyatleast20naturaland/orlegalentitiesthatexpresstheirwilltobemembersoftheclassandbringtheactiontothecourtinwriting"),175–commonality(theactionhastobe"groundedonidenticalorsimilarfactualcir-cumstances"andtoaimat"protectingnaturalorlegalentitiesthatsetupaclassandbroughtaclaim,identicalorsimilarsubstantiverightsorinterestsprotectedbythelawbymeansofthesameremedy"),176169Section92(1)oftheHungarianCompetitionAct;Section39(1)oftheHungarianConsumerProtectionAct.
170Section585(1)-(2)ofthenewHungarianCodeofCivilProcedure.
171Sections583(1)and585(1)(a)ofthenewHungarianCodeofCivilProcedure.
172Sections583(1)and585(1)(b)-(e)ofthenewHungarianCodeofCivilProcedure.
173Section585(1)(f)ofthenewHungarianCodeofCivilProcedure.
TheCode'sexplanatorymem-orandumconrmsthatthisisasuperiorityrequirement,asthecourthastoinvestigatewhetherthejointactionismoreefcientthanpursuingtheclaimsindividually.
174Section4413oftheLithuanianCodeofCivilProcedure.
175Section4413(2)(1)oftheLithuanianCodeofCivilProcedure.
176Sections4411(2)and4413(1)(1)oftheLithuanianCodeofCivilProcedure.
5.
3Pre-requisitesofCollectiveActionandCertication93–superiority(the"classactionisamoreexpedient,effectiveandappropriatemeansofresolvingtheparticulardisputethanindividualactions"),177–adequaterepresentation("theclassshallberepresentedbyanappropriaterepre-sentative"178and"byanattorney-at-law"179).
180Spanishlawdoesnotspecifythepre-conditionsofcollectionactionsinconsumermatters,though,itattacheshighimportancetodenability.
181AlthoughrepresentativeproceedingsareavailableunderEnglishlawifmorethanonepersonhasthesameinterestinaclaim,theyhavebeenrarelyusedduetothestrictjudicialinterpretationofthepre-conditions.
Whiledenabilityisnotspeciedbythelaw,courtshavebeenreluctanttoendorserepresentativeproceedingswheregroupmemberswerenotreadilyascertainable.
InEmeraldSuppliesLtdandOthersvBritishAirwaysplc182owerimporterssuedBritishAirways,becauseitparticipatedinananti-competitivecollusionresultingintheincreaseofcarriagefees.
Emerald,whorepresentedtheplaintiffs,suedbothonbehalfofdirectandindirectpurchasers,andthecourtcametotheconclusionthattheprocedurewasnotrepresentativeasatthemomentwhenitwasinstitutedgroupmemberscouldnotbedeterminedanddidnothaveacommoninterest.
Ifthedamagessufferedbythegroupandthelosssustainedbyindividualgroupmembersarenotascertainable,claimsfordamagesmaybepursuedinatwo-stageprocedure.
Accordingly,intherstphase,adeclaratoryjudgmentisrequestedinrespectoftheissuesthegroupmembershaveincommon.
Thereafter,individualgroupmembersmayinstituteseparateactionsfordamages,wheretheymayrelyonthejudicialdeterminationofthecommonissues.
183Incompetitionlaw,theCompetitionAppealTribunal(CAT)maycertify184acollectiveaction(collectiveproceedingsorder,CPO),iftheclaimsarisefromacompetitionlawviolation,185they"raisethesame,similarorrelatedissuesoffactorlaw"(commonality),"arebroughtonbehalfofanidentiableclassofpersons"177Section4413(1)(2)oftheLithuanianCodeofCivilProcedure.
178Section4413(1)(4)oftheLithuanianCodeofCivilProcedure.
179Section4413(2)(2)oftheLithuanianCodeofCivilProcedure.
SeealsoSection4411(3)oftheLithuanianCodeofCivilProcedure.
180Inadditiontotheabove-listedsubstantivepre-conditions,Lithuanianlawalsoerectsaprocedural(pre-trialdisputesettlement)requirement:thedefendanthastobenotiedoftheintentiontoleaclassactionandhastobegivenatleast30daystomeetthegroup'sdemands.
SeeSections4413(1)3)and4412oftheLithuanianCodeofCivilProcedure.
181GomezandGili(2008:6).
182[2009]EWHC741(Ch).
183PrudentialAssuranceCo.
V.
NewmanIndus.
Ltd.
,2W.
L.
R.
339(Ch1980).
184ForananalysisoftheCAT'sdecisionpractice,seeVeljanovski(2019).
185Section47/A(2)ofthe1998CompetitionAct945EuropeanModelsofCollectiveActions(denability),186"aresuitabletobebroughtincollectiveproceedings"(expedi-ency)187andadequaterepresentationissecured.
188ThecerticationofthersttwocollectiveactionswasdismissedbytheCAT.
189However,inoneofthese,inMerricksvMastercardIncorporated&Anor,190thecasewasremandedbytheCourtofAppeal,whichheldthatthecerticationofaclaimandthegrantofacollectiveproceedingsorder(CPO)maynotberefusedmerelybecauseindividuallossescannotbeascertained.
TheCATrefusedcerticationbecauseof"theabsenceofanyplausiblemeansofcalculatingthelossofindividualclaimantssoastodeviseanappropriatemethodofdistributinganyaggregateawardofdamages.
"191TheCourtofAppealoverturnedtheCAT'sdecision,rulingthatTheCATisexpresslyrequiredunderRule79(2)totakeintoaccountwhethertheclaimsaresuitableforanaggregateawardofdamageswhenconsideringwhethertomakeaCPObutnotwhethersuchanawardcanbedistributedinanyparticularmanner.
Themakingofanaggregateawarddoesnot(…)requiretheCourttocalculateindividuallossorimportantlytoassessthedamagesincludedinthatawardonanindividualbasis.
Why,then,shouldtheybedistributedinthatway192Moreimportantly,forpresentpurposes,theCATisnotrequiredunderRule79(2)(f)forcerticationpurposestoconsidermorethanwhethertheclaimsaresuitableforanaggregateawardofdamageswhich,bydenition,doesnotincludetheassessmentofindividualloss.
Distributionisamatterforthetrialjudgetoconsiderfollowingthemakingofanaggregateaward:seeRules92and93.
WethereforeconsiderthatitwasbothprematureandwrongfortheCATtohaverefusedcerticationbyreferencetotheproposedmethodofdistribution:anerrorcompoundedbytheirviewthatdistributionmustbecapableofbeingcarriedoutbysomemeanswhichcorrespondstoindividualloss.
193Interestingly,thecollectiveproceedingsorderisnotconditionedonnumerousity:acollectiveactionmaybecertied,ifitcombines"twoormoreclaims.
"194Fur-thermore,thoughthestatutorylanguagedoesnotgobeyondtherequirementofsuitability,theCompetitionAppealTribunalRulesof2015containalistoffactorstobetakenintoaccountastotheinterpretationoftherequirementofsuitabilityandthesesuggestthatcollectiveproceedingsmaybecertiedonlyiftheyaremoreef-cientthanindividualactions(superiority).
Notably,theCATtakesintoaccountnotonlywhetherthecollectiveactionis"anappropriatemeansforthefairandefcientresolutionofthecommonissues"butalsoitscostsandbenets,whetherindividualactionshavealreadybeencommencedandthesizeandnatureofthegroup.
195186Section79(1)(a)ofCompetitionAppealTribunalRules2015,StatutoryInstrument2015/1648.
187Section47/B(6)ofthe1998CompetitionAct.
188Section47/B(5)ofthe1998CompetitionAct.
189GibsonvPride[2017]CAT9;MerricksvMastercard[2017]CAT16.
SeeVeljanovski(2019).
190[2019]EWCACiv674(16April2019).
191Para29.
192Para60.
193Para62.
194Section47/B(1)ofthe1998CompetitionAct.
195Section79(2)ofCompetitionAppealTribunalRules2015,StatutoryInstrument2015/1648.
5.
3Pre-requisitesofCollectiveActionandCertication95Anypersonmaybeappointedasgrouprepresentative,ifheiscapableofrepre-sentingthegroupadequately.
Therepresentativedoesnotneedtobeaclassmember,theCATmayappointanypersonifit"considersthatitisjustandreasonableforthatpersontoactasarepresentativeinthoseproceedings.
"196Concerningtheadequacyoftherepresentative,theCATwilltakeintoaccount,amongothers,whetherthereisaconictofinterest,therepresentative'sabilitytocoverthedefendant'slegalcostsiforderedtodoso,197whethertherepresentativehasaplanconcerningthelitiga-tionstrategy,thenoticationofgroupmembers,governanceissuesandestimatedcosts.
198InBelgium,thelawerectstworequirements:superiorityandadequaterepresen-tation.
Acollectiveactionmaybecertiedonlyifitismoreeffectivethanindividuallitigation199andthejudgeconsidersrepresentationtobeadequate.
200Interestingly,asnotedabove,althoughstandingisreservedforauthorizednon-protorganizations,adequacyofrepresentationhastobeinquiredseparately.
Asregardsthesuperiorityofcollectivelitigation,thecourtmayconsiderthefollowingfactors:sizeofthegroup,therelationshipbetweenindividualdamagesandcollectiveharmandthecollectiveaction'scomplexityandefciency.
2015.
4StandingandAdequateRepresentationAccordingtothegeneralopinion,contrarytotheUSpattern,intheEuropeanUnionstandingisreservedforpublicentities(administrativeagencies,theattorneygen-eraletc.
)andqualiednon-protcivilorganizationssuchasconsumerprotectionNGOs.
AccordingtoEuropeanthinking,conferringstandingonthesepublicandnot-for-protorganizationswiththeexclusionofgroupmembersandfor-protenti-tiesmitigatestheriskofabuse.
Itisarguedthatbecausetheseorganizationsarenotprot-orientated,theyareattentivetothepublicinterest,furthermore,theyarereg-istered,regulatedandsupervised.
However,infact,whiletheheroesofclassactionsarecertainlynotgroupmembers(representativeparties)butpublicentitiesandcivilorganizations,inquiteafewMemberStates,theirstandingoperatesinparalleltothatofgroupmembersandonlyafewEuropeanlegalsystemslimitstandingexclu-sivelytopublicentitiesandnon-protorganizations.
Nonetheless,thereisacleartendencytoreserve"hardcases"(whicharedifculttomanageorraisehigherrisksofabuse)topublicentitiesandrecognizedcivilorganizations.
Suchcasesinvolveopt-outproceedingsandcaseswhereitisdifculttodenethegroup.
196Sections47/B(2)and47/B(8)ofthe1998CompetitionAct.
197Section78(3)ofCompetitionAppealTribunalRules2015,StatutoryInstrument2015/1648.
198Section78(3)ofthe2015CompetitionAppealTribunalRules,StatutoryInstrument2015/1648.
199SectionXVII.
363°oftheBelgianCodeofEconomicLaw.
200SectionXVII.
362°oftheBelgianCodeofEconomicLaw.
201Voet(2016:2).
965EuropeanModelsofCollectiveActionsInFinland,solelytheConsumerOmbudsmanhasthepowertoinstituteacollectiveaction.
202InFrance,onlyrecognizedcivilassociationswhoseobjectextendstotheprotectionoftheinterestsatstakemayinstituteopt-outproceedings.
203InBelgium,onlyauthorizedconsumerassociations,SMEs'organizationsandnon-protorga-nizationsmaylaunchcollectiveactions.
However,thelawdistinguishesbetweenstandingandadequacyofrepresentation:thelatterhastobeexaminedindepen-dently.
Interestingly,theConsumerMediationService(Servicedemédiationpourleconsommateur")mayalsolaunchcollectiveproceedingsbutonlyfornegotiatingacollectivesettlement;ifnosettlementcanbeachieved,aconsumerassociationhastostepintocontinuetheprocedure.
204InGermany,modeldeclaratoryclaimsmaybesubmittedsolelybyqualiedconsumerprotectionorganizationsthat—inadditiontotheconditionsapplicabletoentitieseligibletolaunchactionsforinjunc-tion—meetveextraconditions:theyhaveamembershipmadeupofatleast10associationsor350naturalpersons,havebeenregisteredforfouryearsasauthorizedtolaunchconsumeractionsforinjunction,areengagedinnon-professionaleduca-tionaloradvisoryactivities,donotsubmitthemodeldeclaratoryclaimforfor-protconsiderationsanddonotgathermorethan5%oftheirnancialresourcesthroughcompanydonations.
205Thelawsuggeststhatincaseofactionsforcompensation,thegrouprepresentativeneedstomeetheightenedrequirementsascomparedtoactionsforaninjunction.
Itisnoteworthythat,legallyspeaking,nocompensationisawardedintheGermanprocedure,thecourtmaymerelyestablishthatthepre-conditionsofthedefendant'sliabilityaremet.
Inthesamevein,inGreece,standingisconferredexclusivelyoncertiedconsumerprotectionassociations("consumerunions")thathaveatleast500activemembers(ifmorethanoneassociationlesthecase,theyneedtohave500activemembersjointly)andhavebeenregisteredforatleastoneyear.
206InSlovenia,standingisconferredonrepresentativenon-protorganizationsandtheattorneygeneral.
207InLithuania,collectiveactionmaybelaunchedbyagroupmember,anassociationoratradeunion"wherethepleaslaidintheclassclaimariseoutoflegalrelationsdirectlyrelatedtotheobjectiveandeldofactivityoftheassociationorthetradeunionandwhereatleast10membersoftheclassarethemembersoftheassociationortradeunion.
Membersoftheclassmayincludenotonlythemembersoftheassociationorthetradeunionandinthelawsuitproceedingstheassociationorthetradeunionshallrepresenttheinterestsofallmembersoftheclass.
"208202SeeFootnote51.
203Section63ofLoin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle.
204SectionXVII.
39oftheBelgianCodeofEconomicLaw.
205Section606(1)2oftheGermanCodeofCivilProcedure.
206Articles10(16)-(17)ofLaw2251/1994onConsumers'Protection.
207Article4oftheSlovenianLawonCollectiveActions.
208Section4414(1)-(2)oftheLithuanianCodeofCivilProcedure.
5.
4StandingandAdequateRepresentation97InHungary,theCompetitionActconfersstandingontheHungarianCompetitionOfceandtheConsumerProtectionActonpublicentities(consumerprotectionagency,publicprosecutor)andconsumerrightsorganizations.
Inopt-inprocedureslaunchedunderthenewCodeofCivilProcedure,standingisconferredongroupmembers,who,beforesubmittingtheclaim,havetoconcludeajointactioncontractwhich,amongothers,hastonamethegrouprepresentative.
Polishlawconfersstandingonclassmembersandtheregionalconsumerombuds-man(apublicbody).
209InMalta,bothregisteredconsumers'associations(andadhocconstitutedbodies)andgroupmembersmaybeapprovedasgrouprepresentative.
Thelawestablishesrequirementstoensureadequaterepresentation:thecourtapprovesthegrouprepre-sentativeifitissatisedthathe"(a)wouldfairlyandadequatelyactintheinterestsoftheclassmembers;and(b)doesnothave,inrelationtothecommonissuesfortheclassmembers,amaterialinterestthatisinconictwiththeinterestsoftheclassmembers.
"210InSweden,collectiveproceedingsmaybeinitiatedbygroupmembers(privategroupaction),civilorganizations(NGOaction)andadministrativeagencies(publicgroupaction).
211Portugueselawalsodenesstandingwidely:citizens,associations,foundationsandmunicipalities(fortheprotectionofthecitizenslivingintheirterritory)mayinstituteanaction.
212InBulgaria,standingisconferredongroupmembersandcivilorganizations.
213InSpain,standingisconferredongroupmembers,consumerorganizationsandpublicentities.
TheSpanishCodeofCivilProceduredistinguishesbetweengeneralinterests(interesesgenerales)andcollectiveinterests(intersescolectivos).
Thefor-merconcernanundeterminednumberofconsumersandcanbeprotectedinaninjunc-tiveclassaction.
Publicentities(suchasthePublicMinistryandentitiesnamedinspecialconsumerlegislation)andrepresentativeconsumerorganizationshavestand-ingtobringthembeforecourts.
214Collectiveinterestsarethosewhereconsumersarealreadyidentiedorcanbeeasilyidentied;thesecanbebroughtbeforecourtsbygroupmembers,representativeconsumerassociationsandpublicentities(suchasthePublicMinistryandentitiesnamedbyspecialconsumerlegislation).
Inthis209Section4(2)ofthePolishActonPursuingClaimsinGroupProceedings.
210Article12oftheMalteseCollectiveProceedingsAct.
SeeBritishInstituteofInternationalandComparativeLaw(2017:217).
211Sections2(3)and3-6oftheSwedishGroupProceedingsAct.
SeePetterssonetal.
(2004:4).
212Article19ofLaw23/2018of5JuneonAntitrustDamagesActionsalsograntsstandingtobusinessassociations.
213Section379(2)-(3)oftheBulgarianCodeonCivilProcedure.
214Section11(5)oftheSpanishCodeofCivilProcedure,conferringstandingontheSpanishPublicProsecutor(MinisterioFiscal),wasinsertedin2014.
Ley3/2014,de27demarzo,porlaquesemodicaeltextorefundidodelaLeyGeneralparalaDefensadelosConsumidoresyUsuariosyotrasleyescomplementarias,aprobadoporelR.
D.
Legislativo1/2007,de16denoviembre(B.
O.
E.
28marzo).
SeedevilaRuiz-Peinado(2016:14).
985EuropeanModelsofCollectiveActionscase,agroupactionislaunched.
Specialconsumerlegislationmayalsoprovideforthepossibilitytoaccumulatebothtypesofactions.
215InDenmark,thegrouprepresentativeisappointedbythecourt,whomaybeagroupmember,anassociation,aprivateinstituteorotherorganizationoranadminis-trativeagency(e.
g.
theConsumerOmbudsman).
Asnotedabove,underDanishlaw,thecourthasthediscretiontodecidewhetherthecaseshouldbetriedintheopt-inortheopt-outscheme.
Iftheactionfollowstheopt-outpattern,onlyanadministrativeagencymaybeappointedasgrouprepresentative.
TheItaliancollectiveactionmaybeinitiatedbyanyconsumer.
Albeitthatthecon-sumermayalsoauthorizeaconsumerorganization,216standinggoestotheconsumerwhoinitiatedtheprocedure.
InEngland,grouplitigationorderandrepresentativeactionsmaybelaunchedbygroupmembers,while(intheUnitedKingdom)competitionlawcollectiveactionsmaybelaunchedbyagroupmemberorarepresentativebody.
5.
5StatusofGroupMembersinOpt-inProceedings:LiabilityforLegalCostsandResJudicataEffectAlthoughopt-incollectivelitigationisbasedongroupmembers'explicitapproval,inmostsystemsmembersare,atleastformally,notpartiestotheprocedureandthisqualityisconferredonthegrouprepresentative.
Asacorollary,groupmembersarenormallyaffectedbytheoutcomeofthecase(thatis,arecoveredbythejudgment'sresjudicataeffects)buttheyareusuallynotliablefortheprevailingdefendant'slegalcosts.
Thisisariskthatisnormallybornebythegrouprepresentative.
Therationaleofthisapproachismorepracticalthandoctrinal.
Asgroupmembersexpresslyjointhegroup,itwouldbeplausible,bothdoctrinallyandconstitutionally,toexpectthemtoruntherisksattachedtofailure.
Nonetheless,asamatterofpractice,itwouldberatherdifculttohavethemjoininmatterswheretheclaimissmall.
Theinformationasymmetrybetweenthemembersandthegrouprepresentativemaywarrantthatthisriskbeplacedonthelatter.
UnderSwedishlaw,thecost-shiftingburdensthosewholaunchedtheaction(grouprepresentative)andnotgroupmembers,whoarenotconsideredtobepar-tiestotheproceedings.
Accordingly,ifthelitigationissuccessful,groupmembersreceivetheirnetclaim;ifthelitigationisunsuccessful,thedefendant'slegalcostsareshiftedonthegrouprepresentative.
217Likewise,inFinland,thetraditional"loser215RoyalLegislativeDecree1/2007consolidatingthe1984LawonConsumerProtectionandotherconsumerlawshavereducedthenumberoftheselaws,ofwhichtherewereovertwenty-ve.
Somestillremained,andincluderulesoncollectiveactions,suchasSections32and33ofLaw3/1991of10JanuaryonUnfairCompetition,andSection6ofLaw34/1988of11NovemberonAdvertising.
SeePieiro(2016:90–91).
216Section140bis(1)oftheItalianConsumerCode.
217Sections33-36and41oftheSwedishGroupProceedingsAct.
5.
5StatusofGroupMembersinOpt-inProceedings…99pays"principleappliesalsotogroupproceedingsbutgroupmembersarenotpartiestotheproceedings,hence,ifjoiningtheaction,theydonotrunanyriskintermsoflegalcosts.
218Italianlaw'stwo-waycost-shiftingruleismaintainedalsoastocollectiveactions.
However,incasethecourtdecidesagainsttheplaintiff,itordersthegrouprepresentative(andnotgroupmembers)toreimbursethedefendantforhisreasonablelegalcosts.
InGermanylaw,themodeldeclaratoryclaimissubmittedbytheorganizationrepresentingthegroup,whichqualiesasapartyandrunstherisksrelatedtolegalcosts.
219ThemixedregimeavailableinSloveniamaintainsthetwo-waycostshiftingrule,220nonetheless,groupmembersare,formally,notpartiestothecollectiveaction221andhavenorighttoclaimreimbursementandarenotresponsibleforreimbursingthedefendant.
222Nonetheless,acoupleofopt-insystemsdosticktothefullapplicationofthe"loserpays"principle,insistingonthenotionthatifsomeonewantstohaveachanceforafavorableaward,healsohastocarrytheriskofbeingliablefortheexpensestheactiongenerates.
InMalta,althoughthe"costsmaybeawardedinfavouroragainsttheclassrepresentative,butmaynotbeawardedinfavouroforagainstarepresentedpersonwhoisnottheclassrepresentative",223thecollectiveproceedingsagreement,whichisanagreementbetweenthegroupmembersandthegrouprepresentativeandwhichisacceptedbygroupmemberswhenjoiningtheproceedings,"mayalsoincludeprovisionforthepre-paymentand,orreimbursementofanyjudicialcostsincurredbytheclassrepresentative,[p]rovidedthateveryclassmembershallonlybeliableforcostsinproportiontohisclaim.
"224Danishlawdidnotdiscardgroupmembers'liabilityforlegalcostsinopt-inpro-ceedings.
Thecourtmayprovidethatthegrouprepresentativeandjoininggroupmembershavetobestowasecurityforlegalcosts;ifthecourtdecidesso,noaddi-tionalnancialcontributionmayberequestedfromgroupmembers;thatis,thissumfunctionsasacaponindividualgroupmembers'liabilityforlegalcosts.
225Likewise,groupmembers(andnotthegrouprepresentative)areliableforthelegalcostsintheopt-inschemeestablishedbytheHungarianCodeofCivilProce-dure.
Beforelaunchingtheaction,groupmembershavetoconcludea"jointactioncontract",whichlists,amongothers,theplaintiffs,namestherepresentativeplaintiff218Viitanen(2008:8).
219SeeEntwurfeinesGesetzeszurEinführungeinerzivilprozessualenMusterfeststel-lungsklage.
https://www.
bmjv.
de/SharedDocs/Gesetzgebungsverfahren/Dokumente/RegE_Musterfeststellungsklage.
pdf__blob=publicationFile&v=2.
15and26.
Accessedon20March2019.
220Article60oftheSlovenianLawonCollectiveActions;Sladiˇc(2018:215).
221Zdoleketal.
(2018:231).
222"[U]nlessthecostsarecausedbythegroupmembers'fault.
"Article62oftheSlovenianLawonCollectiveActions.
223Article23(1)oftheMalteseCollectiveProceedingsAct.
224Article2oftheMalteseCollectiveProceedingsAct.
225Mgelvang-Hansen(2008:7–8).
1005EuropeanModelsofCollectiveActionsanditsdeputyandcontainsprovisionsontheadvancement,bearingandsplitofcosts,thepreparationoftheactionandlegalcosts,theresponsibilityoftherepresentativeplaintiff,includingitsliabilityfordamages.
226The"jointactioncontract"alsohastodeterminetheconditionsofadhesionandwithdrawal,227ithastocontainprovisionsonsettlement,thatis,whetherasettlementmaybeconcludedornot,andifitmay,italsohastoestablishtheminimumamountandotherrelatedconditions,228ithastomakeprovisionforwhethertherepresentativeplaintiff'sdeclarationshavetobeapprovedbytheparties(groupmembers).
229Sections586(1)(l)and586(2)oftheHungarianCodeofCivilProcedureexpresslyprovidethattheparties'sharefromthemoneyawardedbythecourtorprovidedforinthesettlementhastobecom-mensuratetotheproportionrepresentedbythevalueoftheindividualparty'sclaimandthepartiesmaynotagreeotherwise.
Asitisbannedtoagreetoadivisionthatdepartsfromtheproportionsofthevaluesoftheclaims,thepartiesmaynotenterintoarrangementswheresomememberstakehigherrisksinexchangeforahighershareinthemoneyawarded.
Hungarianlawfollowsthe"loserpays"principleand,attheendoftheday,groupmembersruntheriskofbeingresponsibleforthesuccessfuldefendant'slegalcosts.
Althoughlegalcostsareawardedtoandagainsttherepresen-tativeplaintiff,230asnotedabove,inthejointactioncontract,groupmembershavetoreachanagreementastotheadvancement,bearingandsplitofthesecosts.
InEuropeanopt-insystems,theresjudicataeffectsextendtothosegroupmemberswhoexpresslyjointhegroup.
InSweden,thejudgmentcoversthosegroupmemberswhoexpresslyjointhegroupand,accordingly,thejudgmentcoverstheclaimsofthesepersons(resjudicataeffect).
231Similarly,settlements,whicharetobeapprovedbythecourt,bindonlythosewhojointhegroup.
232InFinland,thegroupconsistsofthosepersonswhogettheirdeclarationsofaccessiontotheOmbudsmanwithinthedeadlineestablishedbythecourt.
233Thejudgment'slegaleffectscoversolelythosegroupmemberswhooptedin.
234InMalta,thecollectivejudgmentonthecommonissuesbindsonlythosegroupmemberswhojoinedtheproceedings.
235InGermany,courtshavenopowertoawarddamages,instead,thepurposeoftheactionistoestablishthattheclaim'sorlegalrelationship'sfactualandlegalpre-conditionsexistordonotexist.
236Groupmembersmayseekmonetaryrelief,onanindividualbasis,afterthepre-conditionsofthedefendant'sliabilityareestablished.
Thenaldeclaratoryjudgmentisbindingoncourtsinmattersbetweenconsumerswhoopted226Sections586(1)(a)-(c),586(1)(e)&586(1)(g)oftheHungarianCodeofCivilProcedure.
227Section586(1)(h)oftheHungarianCodeofCivilProcedure.
228Section586(1)(i)oftheHungarianCodeofCivilProcedure.
229Section586(1)(j)oftheHungarianCodeofCivilProcedure.
230Section590(3)oftheHungarianCodeofCivilProcedure.
231Sections13-14oftheSwedishGroupProceedingsAct.
232Section26oftheSwedishGroupProceedingsAct.
233SeeFootnote50.
234Viitanen(2008:5).
235Article18(1)oftheMalteseCollectiveProceedingsAct.
236SeeFootnote77.
5.
5StatusofGroupMembersinOpt-inProceedings…101inandthedefendant,providedtheseconcernthesameaimsandthesamefactpatternasthecollectivedeclaratoryjudgment.
237InItaly,thenaljudgmentisbindingonallgroupmemberswhojoinedtheproceedings(andtheleadplaintiffandthedefendantobviously).
Whilethosewhofailedtojoinarenotbound,theclassactionhasapreclusioneffectastofuturecollectiveactionsinthesamesubject:consumersnotpartofthegroupdoretaintheirrightstolaunchindividuallaw-suitsbutmaynotstartanothercollectiveactionagainstthesamedefendantonidenticalgrounds.
238InUKcompetitionlaw'sopt-inscheme,iftheCATcarriesouttheprocedureaccordingtotheopt-inprinciple,theCAT'sjudgmentsandorderswillbebindingonlyonthosegroupmemberswhooptedin.
239InLithuania,nalcourtdecisionsarebindingongroupmemberswhooptedin.
Thecourtmayadjudicatethepleascommontoallclassmembersina"commonruling";incaseclassmembershaveindividualpleas,thecourtmayadoptan"intermediateruling"and"individualrulings.
"2405.
6StatusofGroupMembersinOpt-OutProceedings:LiabilityforLegalCosts,ResJudicataEffectandthe"OnlyBenets"PrincipleAsnotedabove,duetodoctrinalandconstitutionalreasons,Europeanopt-outcol-lectiveactionshavebeenimpregnatedbythe"onlybenets"principle:theencroach-mentonpartyautonomymaybejustiedifonlybenetsaccruetogroupmembers.
Europeansystemshavebeenstrugglingremarkablywiththeimplementationofthisprinciple,producinginnovativeandidiosyncraticsolutions.
ThemajorrisksrelatedtocollectivelitigationinEuropearetheliabilityforlegalcostsandbeingboundbyanunfavorablejudgmentincasethegrouprepresentativefails.
Duetothetwo-waycost-shiftingrule,theprevailingpartyhastobecompensatedforhisreasonablelegalcosts.
Itisevidentthatinopt-outproceedingsgroupmembersmaynotbeliableforanylegalcosts(excepttheonestheycaused).
Likewise,thepossibilityofintroducingtheAmericanruleastocollectiveactionswasalsogenerallyrejected—itwouldhavebeeninconsistenttodoawaywithanentrenchedprincipleofEuropeancivilprocedureastocollectivelitigation,whilepreservingitastoindividualactions.
Thesetwofactorsdeterminedthatitshouldbethegrouprepresentativewhocarriestheriskoflegalcosts.
IntheGreekconsumercollectiveaction,groupmembersarenotliableforlegalcostsifthecollectiveactionprovesunsuccessful.
241Likewise,inPortugal,itisthe237SeeFootnote78.
238Afferni(2016:89–90).
239Sections47B(12)and59(1)ofthe1998CompetitionAct.
240Section4419andSection2611oftheLithuanianCodeofCivilProcedure.
241EuropeanParliament,PolicyDepartmentA:EconomicandScienticPolicy,DirectorateGeneralforInternalPolicies(2011:25).
1025EuropeanModelsofCollectiveActionsgrouprepresentative(collectiveplaintiff)andnotindividualgroupmemberswhocarriestheriskastolegalcosts.
242ThesameapproachprevailsinSpain.
Inordertopromotecollectiveactions,Article37(d)ofRoyalLegislativeDecree1/2007laiddowntherightofconsumerassociations'tolegalaid.
InHungary,inopt-outproceedings,groupmembersarenotliableforlegalcosts,contrarytotheopt-inschemeoftheHungarianCodeofCivilProcedure.
IntheUnitedKingdom'sopt-outschemeavailable(subjecttotheCAT'sdiscretion)incompetitionmatters,therisksrelatedtolegalcostsare,inprinciple,runbythegrouprepresentative:"costsmaybeawardedtooragainsttheclassrepresentative,butmaynotbeawardedtooragainstarepresentedpersonwhoisnottheclassrepresentative.
"243InBulgaria,groupmembersarenotliableforlegalcostsifthecollectiveactionprovesunsuccessful—themainburdenisassumedbythegrouprepresentative,whoisrequiredtoprovehisnancialcapacityattheoutsetoftheprocedure.
244However,groupmemberswhoexpresslyoptedinwouldbealsoliabletogetherwiththegrouprepresentative.
Oncetheyoptin,theybecomepartiestotheproceedingswiththepertinentrightsthatallowthemtoinuencethecourseofthecase,which,inturn,allowstheimpositionofliabilityincaseoffailure.
Danishlawsubjectsgroupmemberstopartialliabilityforlegalcosts,whiletryingtopreservethe"onlybenets"principle:iftheproceedingsareconductedintheopt-outpattern,groupmemberscannotbeobligedtopaymoreforlegalcoststhanthemoneyactuallyawardedtothem.
245Inotherwords,groupmembersruntheriskoflosingmoneywiththegroupactiononlyiftheopt-inschemeisusedandtheyjointheaction.
246Legalcostsarenottheonlyriskwheretheneedofthe"onlybenets"principlehasbeenclaimed.
WhilemostEuropeanopt-outsystemssimplyextendthejudgment'sresjudicataeffectstogroupmemberswhodidnotopt-out,afewMemberStateswereinuencedbytheargumentthatpartyautonomyisrestrictedalsoifindividualgroupmemberscouldhaveachievedabetterresultthantheonethegrouprepresentativedid(theycouldhavewoninacasewherethecollectiveactionfailedorcouldhaveobtainedamorefavorableremedy).
Asitisvirtuallyimpossibletoassessthisonacase-by-casebasis,someEuropeansystems(Hungary,Portugal,France)havedevel-opedvariouspracticestoensurethejudgment'sresjudicataeffectwithoutformallyextendingittogroupmembersandmadethejudgment'sbindingforcelimping.
ThemajorityofEuropeanopt-outregimesusesastraightapproachandprovidesthatthejudgment'sresjudicataeffectcoversallgroupmembersbutthosewhooptedout.
242Tortell(2008:7).
243Section98ofCompetitionAppealTribunalRules2015,StatutoryInstrument2015/1648.
244Section380(3)inconjunctionwithSection381(3)oftheBulgarianCodeonCivilProcedure.
245SeeFootnote225.
246NielsenandLinhart(2012:238).
5.
6StatusofGroupMembersinOpt-OutProceedings…103InBulgaria,groupmembersmayopt-inbutthejudgmentwillextendtoallgroupmemberswhodidnotopt-out.
Thejudgmentofthecourtshallhaveeffectinrespectoftheinfringer,thepersonorpersonswhohavebroughttheaction,aswellasinrespectofthosepersonswhoclaimthattheyareharmedbytheestablishedinfringementandwhohavenotdeclaredthattheywishtopursuearemedyindependentlyinaseparateprocedure.
Theexcludedpersonsmayavailthemselvesofthejudgmentwherebytheclassactionhasbeengranted.
247InSpain,groupmembersmayparticipateintheprocedure.
248Oncethecourtconrmsthecollectiveaction,thisfacthastobeannounced.
249Thecourt'sjudgmenthastogiveadetaileddenitionofthefeaturesandrequirementsthataretobemettoqualifyasagroupmember.
Thejudgmentrenderedasaresultofacollectiveactionanditsresjudicataeffectscoverallgroupmembers,eventuallyalsothose,whodidnotoptin.
Ifthecourtdecidesfortheplaintiffs,thejudgmenthastodeterminetheconsumersandusersbenetingfromthejudgmentindividually.
Whengroupmemberscannotbeidentied,thejudgmenthastosetouttheconditionsofgroupmembershipandestablishthedata,characteristicsandrequirementsthataretobemetforclaimingpaymentorrequestingenforcement.
250Ifconsumersarenotdeterminedindividuallyinthejudgment,awrithastobeissuedintheenforcementstagetoestablishwhetheraparticularperson,onthebasisofthedata,characteristicsandrequirementssetoutthere,iscoveredbythejudgment.
251InDenmark,asnotedabove,thecourthasthepowertodecidewhethertocarryouttheproceedingsintheopt-inortheopt-outscheme.
Thepartiesoftheprocedurearethegrouprepresentativeandtheadversaryparty(defendant);groupmembersarenotpartiesintheconventionalsense.
252Nevertheless,intheopt-outprocedure,thejudgment'sresjudicataeffectsextendtothememberswhofailedtooptout.
AsimilarschemeprevailsinBelgium:thecourthasthepowertodecidebetweentheopt-inandtheopt-outscheme.
Thenaljudgmentextends,accordingly,tothosewhooptedinoroptedout,dependingontheschemechosenbythecourt.
253IntheUnitedKingdom,incompetitionmatters,itisuptotheCATtodecidewhethertheprocedurewillbecarriedoutintheopt-inortheopt-outscheme.
254Incasetheopt-outsystemisused,theCAT'sjudgmentsandorderswillbebindingonthosewhodidnotoptout.
255ClassmembersdomiciledoutsidetheUK,tobecoveredbytheCAT'sjudgmentsororders,havetooptin,eveniftheopt-outscheme247Section386(1)oftheBulgarianCodeonCivilProcedure.
248Section13(1)oftheSpanishCodeofCivilProcedure.
249Section15oftheSpanishCodeofCivilProcedure.
250Sections221and222(3)ofSpanishCodeofCivilProcedure.
251Section519ofSpanishCodeofCivilProcedure.
SeePieiro(2016).
252Mgelvang-Hansen(2008:3).
253Voet(2016:3–4).
254Section47/B(7)(c)ofthe1998CompetitionAct.
SeealsoSection47/B(10)-(11)ofthe1998CompetitionAct.
255SeeFootnote239.
1045EuropeanModelsofCollectiveActionsisused.
TheCATisnotrequiredtoindividualizethedamagesawarded:"[it]maymakeanawardofdamages(…)withoutundertakinganassessmentoftheamountofdamagesrecoverableinrespectoftheclaimofeachrepresentedperson.
"256Asnotedabove,inafewMemberStates,judgmentsadoptedincollectiveactionshavelimpingresjudicataeffects.
InHungary,itisnotobviousifinopt-outproceedingsavailableincompetitionandconsumerprotectionlawthejudgment'sresjudicataeffectsextendtogroupmembers.
Thestatutorytextdoesnotprovideforthisspecically.
Itdealsonlywiththecasewhenthegrouprepresentativewins,notaddressingthecaseofplaintifffailure.
Moreimportantly,groupmembersarenotpartiestothecollectiveaction,hence,absentaspecicprovision,theyshouldnotbecoveredbytheresjudicataeffects.
Lastbutnotleast,thelawprovidesthatthecollectiveactiondoesnotaffecttheconsumer'srighttopursuehisrightsindividually.
257Allthesesuggestthatwhilegroupmembersmay"use"thejudgmentifthegrouprepresentativeprevails,theyarenotnecessarilycoveredbytheresjudicataeffect.
However,thisquestionhasnotbeentestedinjudicialpractice.
IntheGreekconsumercollectiveaction,thejudgment'sresjudicataeffectextendstoall(includingabsent)groupmembersbutonlyiftheconsumerassociationis,fullyorpartially,successful.
Incasethedefendantdoesthecomplywiththejudgmentvoluntarily,aconsumermayrequestthecourttoissueapaymentorderforhim.
258InPortugal,onceapopularactionisinitiated,thecourt,afteranappropriatepublicnotice,setsadeadlineforadherenceorrefusalofadherence.
Thepopularactionfollowstheopt-outprinciple259:silenceinfersadherence.
However,thelawsheltersgroupmembersinvariouswaysfromthepotentiallydetrimentalconsequencesofresjudicata.
First,groupmembersmayoptoutverylate,untiltheendoftheevidentiaryprocedure.
260Second,thelawerectstwoexceptionstotheprinciplethatthenaljudgment'sresjudicataeffectsextendtoallgroupmemberswhohavenotoptedout:groupmembersarenotcoveredbythejudgment'sresjudicataeffectsiftheclaimwasrejectedforlackofevidence,furthermore,thejudgemaydecidetoexemptgroupmembersfromthiseffectconsideringthespecialcharacteristicsofthecase.
261JudgmentsincollectiveactionshavelimpingresjudicataeffectsalsounderFrenchlaw,whichhasbeenaboveaveragecreativeastothepurviewofresjudicatainopt-outproceedings.
Theschemeappearstobeadefactoopt-outsystem,althoughthe256Section47/C(2)ofthe1998CompetitionAct.
257Section92(8)oftheHungarianCompetitionAct;Section38(7)ofActCLVof1997onConsumerProtection.
258Articles10(20)ofLaw2251/1994onConsumers'Protection.
SeeEmvalomenos(2016:4)andEuropeanParliament,PolicyDepartmentA:EconomicandScienticPolicy,DirectorateGeneralforInternalPolicies(2011:25).
259Section15ofthePortugueseActonPopularAction.
260Antunes(2007:20–21).
261Section19ofthePortugueseActonPopularAction.
ItisworthyofnotethatthereisatheoryinPortuguesedoctrinewhichsuggeststhat,duetoconsiderationsofconstitutionality,onlythoselegalconsequencesshouldhaveresjudicataeffectsongroupmemberswhicharebenecialtothem.
deFreitas(1998:797,809).
5.
6StatusofGroupMembersinOpt-OutProceedings…105consumer'srighttooptinisretainedandcanbeexercisedafterthejudgmentismade.
Accordingly,thejudgment'sresjudicataeffectsextendtogroupmembersontheconditionthattheyaccepttheawardandgetcompensated:thejudgment'sresjudicataeffectscoveronlythosegroupmemberswho,afterhavingbeendulyinformed,expresslyacceptthejudgmentandthecompensation.
262Notwithstandingtheconditionalnatureoftheresjudicataeffectsonindividualgroupmembers,thejudgmentadoptedattheendofthegroupactionhasageneralpreclusioneffectagainstsubsequentgroupactionsinitiatedinthesamecase.
2635.
7EnforcementInterestingly,although,asamatterofpractice,thisappearstobeofcrucialimportanceforthesuccessofcollectiveactions,inthevastmajorityofthesystems,collectiveawardscomeunderindividualenforcement.
264Nonetheless,ahandfulofMemberStatesmadeprovisionsforthecollectiveenforcementofthejudgmentaccruingfromthecollectiveaction.
InMalta,ifthecourtawardscompensation,it"mayorderthedefendanttocredittheamountduetoaspecicaccountheldbytheclassrepresentativeandmaygivesuchorders,asitdeemsnecessary,totheclassrepresentativefortheeffectivedistributionofthatcompensationamongtheclassmembers.
"265InBelgium,collectiveawardsandset-tlementsareenforcedunderthesupervisionofa"collectiveclaimssettler",whocanclaimhiscostsandfeesfromthedefendant.
266InSlovenia,enforcementiscarriedoutwiththehelpofacollectiveredressmanager.
267InFrance,themoneyhastobepaiddirectlytogroupmembers;however,therepresentativeplaintiffmaybeauthorizedtoenforcetheawardanddistributeitamongthemembers.
268IntheUnitedKingdom,inopt-outcollectiveproceedingsavailableincompetitionmatters,theCATmayorderthatthedamagesbepaideithertotherepresentativeplaintifforanythirdpersontheCATdetermines.
269Inopt-inproceedings,thedamagesare,inprinciple,tobepaid262Section78ofLoin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
263Section80ofLoin°2016-1547du18novembre2016demodernisationdelajusticeduXXIesiècle,JORFn°0269du19novembre2016texten°1.
264CommissionReportontheimplementationoftheCommissionRecommendationof11June2013oncommonprinciplesforinjunctiveandcompensatorycollectiveredressmechanismsintheMem-berStatesconcerningviolationsofrightsgrantedunderUnionlaw(2013/396/EU),COM(2018)40nal,p12.
("Theenforcementofinjunctionsisgenerallycarriedoutthroughthesamemeasuresirrespectiveofwhethertheinjunctiveorderwasissuedinindividualorcollectiveproceedings").
265Article18(3)oftheMalteseCollectiveProceedingsAct.
266SectionXVII.
57-62oftheBelgianCodeofEconomicLaw.
SeeVoet(2016:6–7).
267Article43oftheSlovenianLawonCollectiveActions.
268Sections826-21-826-23oftheFrenchCodeofCivilProcedure;Lustin-LeCore(2016:20).
269Section47/C(3)ofthe1998CompetitionAct.
1065EuropeanModelsofCollectiveActionsdirectlytogroupmembersunlesstheCATdecidesotherwise(inwhichcasetheywillbepaidtotherepresentativeplaintifforanythirdpersontheCATdetermines).
270InBulgaria,enforcementismanagedbythegrouprepresentativeundercourtsupervision.
Thecourtmayrequirethattheindemnicationbecollectedinthenameofoneoftherepresentativesorinanescrowaccount.
271Furthermore,thecourtmayconveneageneralmeetingofallinjuredparties,whichcandecideonthemannerofallocationorexpenditureoftheindemnicationamount.
Thismeetingischairedbythejudgeandcanadoptvaliddecisionsifmorethan6injuredpartiesattend.
272Normally,individualclaimsnotenforcedwithinthetermoflimitationremainwiththedefendant.
However,forinstance,inPortugal,ifgroupmembersdonotenforcethecompensationawardedtothemwithinthreeyears,theclaimaccruestotheMinistryofJusticewhoisexpectedtouseittopromoteaccesstojustice.
273Insecuritieslaw,thenon-distributedpartoftheglobalcompensationaccruestotherespectivenancialsector'sguaranteefund.
274Incaseofantitrustdamagesactions,thenon-distributedpartmaybeusedtopayforthepromoters'costsoflitigation,whichwouldotherwisegouncompensated.
275IntheUnitedKingdom,incompetitionlawopt-outcollectiveactions,provisionismadeforunclaimedmoneys:iftheCAT"makesanawardofdamagesinopt-outcollectiveproceedings,anydamagesnotclaimedbytherepresentedpersonswithinaspeciedperiodmustbepaidtothecharityforthetimebeingprescribedbyordermadebytheLordChancellor"276ortheSecretaryofState277;however,theCAT"mayorderthatallorpartofanydamagesnotclaimedbytherepresentedpersonswithinaspeciedperiodisinsteadtobepaidtotherepresentativeinrespectofallorpartofthecostsorexpensesincurredbytherepresentativeinconnectionwiththeproceedings.
"2785.
8SummaryInterestinglyandcounter-intuitively,10outofthe17EUMemberStatesthathaveadoptedcollectivelitigationschemescreatedsystemsbasedfullyorpartiallyontheopt-outprinciple(Belgium,Bulgaria,Denmark,France,Greece,Hungary,Portugal,Slovenia,Spain,andtheUnitedKingdom)andonly7ofthemstucktotheopt-inprin-ciple(Finland,Germany,Italy,Lithuania,Malta,PolandandSweden).
Accordingly,whileitistruethatinthevastmajorityoftheMemberStatesnoopt-outcollective270Section47/C(4)ofthe1998CompetitionAct.
271Section387oftheBulgarianCodeonCivilProcedure.
272Section388oftheBulgarianCodeonCivilProcedure.
273Section22ofthePortugueseActonPopularAction.
DiasandAndradeeCastro(2016:67).
274Section31oftheSecuritiesCode(Decree-Law486/99asrevised).
275Section19ofLaw23/2018of5JuneonAntitrustDamagesActions.
276Section47/C(5)ofthe1998CompetitionAct.
277Section47/C(7)ofthe1998CompetitionAct.
278Section47/C(6)ofthe1998CompetitionAct.
5.
8Summary107litigationisavailable,morethanhalfofthecountriesthatdecidedtocreateaspecialregimeallowedrepresentationwithoutauthorizationingeneraloringivensectors.
Thoughafewcountrieshaveregimesofgeneralscope,mostEuropeancollectivelitigationsystemshavealimitedambit(suchasconsumermatters),reectingthenotionthatcollectiveactionsshouldbelimitedtocaseswheretheyarehighlyneeded.
Somesystemshaveused"leapfrogging"toextendtheschemetofurthersectorsdemonstratingtheprecautiousapproachofEuropeanlegalsystemsastocollectivelitigation.
EuropeancollectivelitigationisnormallysubjecttomorestringentrequirementsthanUSclassactions.
Thepre-conditionsofcollectivelitigationnormallyembracethoseofUSclassaction(numerousity,commonality,typicalityandadequaterep-resentation)butquiteafewsystemsgobeyondtheseandrequirethatcollectivelitigationbeexpedientorsuperiortoindividuallitigationandthatthegroupbeden-ableandgroupmembersidentiablebymeansofthegroupdenition(especiallyincasetheopt-outschemeisused).
TheheroesofEuropeancollectivelitigationaregovernmentalandnon-governmentalnot-for-protorganizations(suchasadministrativeagencies,theattor-neygeneralandconsumerprotectionNGOs).
Althoughstandingisnotreservedsolelyforthem(infact,inseveralMemberStatestheirstandingoperatesinparal-leltothatofgroupmembersandonlyafewsystemslimitstandingexclusivelytopublicentitiesandnon-protorganizations),theyareexpectedtobetheauthorsofcollectiveactions(aslawrmsareintheUS).
Thereisacleartendencytoreserve"hardcases",whicharedifculttomanageandpresentahigherriskofabuse,topublicentitiesandrecognizedcivilorganizations.
AccordingtoEuropeanthinking,governmentalandnon-governmentalnot-for-protorganizationsareassumedtobemoreattentivetothepublicinterestthanfor-protenterprises.
Althoughinopt-insystemsgroupmembersexpresslyjointheaction,contrarytothegrouprepresentative,theyareformallynotpartiestotheprocedure.
Theyareboundbythenaljudgmentbutinmostsystems,insteadofthem,itisthegrouprepresentativewhoisliablefortheprevailingdefendant'slegalcosts.
Duetodoctrinalandconstitutionalreasons,Europeanopt-outclassactionlegis-lationhasbeenimpregnatedbythe"onlybenets"principle:theencroachmentonpartyautonomyisjustiedbythefactthatonlybenetsaccruetogroupmembers.
Europeansystemshavebeenstrugglingremarkablywiththeimplementationofthisprinciple,producinginnovativeandidiosyncraticsolutions.
First,itisevidentthatinopt-outproceedingsgroupmembersmaynotbeliableforlegalcostsandthegrouprepresentativeshouldcarrythisburden.
Second,ithasbeenarguedthatpartyautonomyisrestrictedalsoiftheindividualgroupmemberisboundbyanunfavor-ablejudgment.
Hence,insomeEuropeanopt-outsystems,theresjudicataeffectsarelimpinginrelationtogroupmembers.
Forinstance,inFrance,groupmembersareboundbythejudgmentonlyiftheyexpresslyacceptthecompensation.
InHun-gary,itisdubiousifinopt-outproceedingsavailableincompetitionandconsumerprotectionmattersthejudgment'sresjudicataeffectextendstogroupmembers.
InPortugal,ifthecourtdecidesforthedefendantduetolackofevidence,thejudgment1085EuropeanModelsofCollectiveActionswillnotbebindingongroupmembers;furthermore,asageneralrule,ifjustied,thecourtmayexemptgroupmembersofthejudgment'sresjudicataeffects.
Interestingly,although,asamatterofpractice,thisappearstobeofcrucialimpor-tanceforthesuccessofcollectiveactions,inmostsystems,collectiveawardscomeunderindividualenforcementandonlyahandfuloftheMemberStateshavemadeprovisionforcollectiveenforcement.
TheabovemodellingiscrownedwiththerecentEuropeanproposalforacon-sumercollectiveaction.
InApril2018,theCommissionproposedtheadoptionofa"representativeaction"intheeldofconsumerprotectionlaw.
279Theproposeddirectiveis,inessence,basedontheabovecommonprinciplesidentiedasthecom-moncoreoftheexistingEuropeanmechanisms.
GiventhatonethirdoftheMemberStateshasnocollectiveactionscheme,itisasignicantvirtueoftheproposeddirec-tivethat,ifadopted,itwillmakeconsumercollectiveactionsavailableineachandeveryMemberState.
Ontheotherhand,atthepresentstageofthelegislativepro-cess,280asasimplecodicationofthe"collectiveactiontraditionscommontotheMemberStates",itissupposedtoentailnolandslideconceptualreform:ithasasec-toralapproach(consumerprotection),rigorouspre-conditions,confersstandingonqualiedrepresentativeentities,maintainsthe"loserpaysrule",rulesoutnancialincentives,suchascontingencyfeesandpunitivedamagesand,lastbutnotleast,evadesthedilemmaofopt-inandopt-outthroughleavingthechoicetoMemberStates.
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Chapter6ConclusionsTheEuropeanhistoryofcollectiveactionsstartedroughlythreedecadesago.
WhilecollectivelitigationprovedtobeoneofthemostsuccessfulexportproductsofAmer-icanlegalscholarship,ithasbeenverylikelyalsooneofthelegaltransplantationsthatgeneratedthemostheateddebates.
Thisprocess,notdevoidofscare-mongeringandlegislativehesitation,hasresultedinalandscapewhere17outof28MemberStateshaveadoptedaspecialregimeforcollectiveactions.
ThisevolutioniscrownedwiththeCommission'srecentproposalforaconsumercollectiveaction.
1ThoughUSclassactionshavebeenapointofreference,collectivelitigationhasbeenfundamentallyreshapedduringtheEuropeantransplantation.
Notsurprisingly,thismetamorphosishasbeenduetoEuropeanlaw'sdiscrepantmentalattitudeanddivergingregulatoryenvironment.
Firstofall,incontrastwithUSlaw'snotionthatprivateplaintiffs(bothindividualandcollective)mayfunctionasa"privateattorneygeneral",Europeancollectiveactionshavenopublicpolicyrolebutareconnedtoservingapurelycompensatoryfunction.
InEurope,eventheproponentsofopt-outclassactionstendtodisallowitspossiblepublicpolicyfunctionandtoconceiveitsrolepurelyasprovidinganeffectiveremedytogroupmembers.
Second,ithasbeenevidentthattheoperationofcollectivelitigation,duetotheabsenceofcertaincontextualdoctrines,willdiffersharplyonthetwosidesoftheAtlantic.
Infact,thedivergingregulatoryenvironment(e.
g.
theabsenceofcontin-gencyfees,theAmericanruleonattorney'sfees,punitiveandtrebledamagesinEurope)takesofftheedgeoftheEuropeancriticismagainsttheintroductionofclassactions,whichislargely,ifnotfully,attributabletotheabovecontextualconcepts.
1ProposalforaDirectiveonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC,COM(2018)184nal.
SeeEuropeanParliamentlegislativeresolutionof26March2019ontheproposalforadirectiveoftheEuropeanParliamentandoftheCouncilonrepresentativeactionsfortheprotectionofthecollectiveinterestsofconsumers,andrepealingDirective2009/22/EC(COM(2018)0184–C8-0149/2018–2018/0089(COD)).
TheAuthor(s)2019C.
I.
Nagy,CollectiveActionsinEurope,SpringerBriefsinLaw,https://doi.
org/10.
1007/978-3-030-24222-0_61131146ConclusionsThird,duetothedissimilarregulatoryenvironment,inEurope,collectivelitigationraisesagoodnumberofregulatoryissuesthatsimplydonotemergeinthecountryoforigin.
BecauseoftheAmericanrule,theplaintiffs'liabilityforlegalcostsisnotanissueintheUS,whileitisacentralquestioninEurope.
LitigationnanceisacrucialprobleminEurope,contrarytotheUS,wherevariousmeansofgeneralapplication(suchascontingencyfees,super-compensatorydamages,one-waycostsshiftingincertainelds)areavailabletoinciteandrewardthosewhofundlitigationandtheseareequallyavailableinindividualandcollectiveactions.
Fourth,thetabooofpartyautonomyhashadaprofoundimpactonEuropeansys-tems,especiallyopt-outschemes.
Thisentailedtheemergenceofthe"onlybenets"principleconcerningcollectiveproceedings'effectsongroupmembers.
Allthesedifferencesresultedinasystemàl'européenne.
6.
1CollectiveActionsAreNeededinEuropetoEnsureAccesstoJusticeandEffectivenessoftheLawSmallclaimsfacehurdlesthatmaypreventindividualenforcementandleadtosub-optimalenforcement.
2Collectivelitigationmaymakelitigationpossiblealsoincaseswhereindividuallitigationwouldnotbeeconomicallyrational.
Collectiveactionsmayentailcost-savingsduetoeconomiesofscaleandmaytackletheproblemofpositiveexternalities.
Throughmakingtheenforcementofsmall-valueclaimsareal-ity,itensuresaccesstojusticeandeffectivenessofthelaw.
Nonetheless,collectivelitigationnecessitatesregulatoryintervention,since,duetothehighcostsofgrouporganization,itwouldnotworkspontaneouslyand,accordingly,thelawhastotackletheproblemoforganizationalcostssoastomaketheenforcementoftheseclaimsareality.
Thecostsandrisksmaymakelitigationeconomicallyunreasonableeveninwell-foundedcases(theexpectedcostsmaybehigherthantheexpectedvalue).
First,non-recoverablelegalcostsmaydeterlitigation.
AlthoughinEuropelegalcostsare,inprincipleandwithsomerestrictions,bornebythelosingparty,thewinningpartycannotshiftthelegalcostsinfull.
Theproofanddocumentationofthelegalexpensesmaybedifcult;thelawmayrestricttheamountoftheattorney'sfeesthatcanbeshiftedontothelosingparty;theclaim'senforcementmaygiverisetosomepracticallyunrecoverableexpenses.
Furthermore,certainexpensescannotbeshiftedontothelosingparty(thesecostsarelegallynotshiftable).
Examplesareinconveniencesrelatedtolitigationandthetimetheclaimantspendsontheclaim.
Obviously,suchexpensesmayemergeinanymatter,butinrespectofsmallclaimsthesecostsarecomparablymuchhighergiventhesmallpecuniaryvalueinvolved.
Second,thecostsofpreliminarylegalassessmentmayalsodissuadetheplain-tiff.
Although,theoretically,thesemayberegardedasshiftableexpenses(astheyemergeinrelationtolitigation),informationshortagepertainstosuchsituations.
2ForadetailedelaborationoftheanalysissetforthinthissectionseeNagy(2013:469–498).
6.
1CollectiveActionsAreNeededinEuropetoEnsureAccess…115Thepreliminarylegalassessmentoccursatastagewheretheclaimanthasnoinfor-mationabouthischances,sohehastotakeintoaccountthathemayhavetopayevenifthereisnoreasontosue.
Third,inmattersinvolvingsmallclaims,thevalueatstakeissmallandlegalcostsare,incomparisontotheclaim'svalue,veryhigh,hence,arelativelytrivialprobabilityoffailuremaymakethebalanceoflitigationnegative.
Thehigherthelegalcostsareinrelationtotheclaim'svalue,thebetterthisriskcropsout.
Asamatterofpractice,litigationinevitablyinvolvessomeriskandalmostallclaimshaveimmanenthazards.
Collectiveactionshavecertainadvantagesthatmaketheenforcementofsmallclaimspossibleincaseswherenumerouspersonsaredamagedbythesameillegalact.
Althoughdamagesaresmallforeachindividual(whatmaymakelitigationunreasonable),collectivedamages(thesumofvariousindividuals'damages)arehigh.
Themeritofcollectiveactionscanbeattributedtotwovirtues:economiesofscale3andtacklingexternaleconomiceffects(externalities).
Jointlitigationmayentaileconomiesofscaleandissusceptibleofdoingawaywiththeexternaleconomiceffectsindividuallitigationmaycause.
Thisisduetothefactthattheenforcementofindividualsmallclaimsmayhavesignicantcommoncosts.
4Althoughitistruethatthisisageneraladvantageofjointlitigation(thatis,itmayequallyemergeincaseswheretheclaimsarenotofsmallvalue),incaseofsmallclaims,thecost-savingsarecomparablyhigherthanincaseofhugeclaims.
Inrelatedmatters,litigationcostsareoftennotcommensurabletothenumberofclaimants,sincecertainexpenses(testimonies,deliberationofliabilityandsoon)emergeonlyonce.
5Asubstantialpartofthelegalcostsmaybexedcosts,whichemergeindependentlyofthenumberoftheclaimants,whiletherestmaybemadeupofvariablecosts,whichareaffectedbythenumberofclaimants.
Ifthelossiscausedbythesamewrong,theremaybecommon(xed)costs;andifthesearesignicantincomparisontoindividualcosts,collectiveactionsmaybecost-effective.
Individuallitigationmayentailpositiveexternaleffects(externalities),conferringadvantagesonotherclassmemberstheydidnotpayfor.
Thedifferencebetweentheexpectedcostsandtheexpectedvaluemaybenegativeonindividuallevelbutpositiveongroup(orsocial)level.
Sincetheindividuallitigatordoesnotbenetfromthepositiveexternaleconomiceffectsenjoyedbyothergroupmembers(thatis,thesebenetsarenotinternalized),thismayleadtosub-optimallitigation.
Althoughonemightarguethattestcasescaneffectivelysubstitutecollectivelitigation,thisisrefutedbythefactthattestcasesmayentailfree-riding:non-activegroupmembersmayfree-rideontheeffortsoftheindividuallitigatorwhostartedthetestcase.
Thereasonwhycollectivelitigationdoesnotoccur,atleastnotonalargescale,spontaneously,notwithstandingtheseveraltraditionallegaltools(joinderofparties,63Seee.
g.
Ulen(2011:185,187).
4SeeBone(2003:261–265).
5Ulen(2011:185,187).
6Nagy(2011:163).
1166Conclusionsassignmentofclaimstoanentityfoundedbygroupmembers)7thatmaybeusedtoorganizethegroup,isthecostofgrouporganization.
Thesecostsmaybeveryhigh,insomecasesevenprohibitive,8andtraditionallegaltoolsarenottailoredtotheneedsofcollectivelitigation,thusincreasingthecostsofgroupmanagement.
96.
2EuropeanObjectionsandFearsAgainsttheOpt-OutSystem:Superego,EgoandIdIntheEuropeanscholarlydiscourse,resistanceagainstUSclassactionshasbeenpredominantlydogmatic(constitutionaldoctrineofpartyautonomy)but,subcon-sciously,backedbythesettledEuropeanthinkingthattheenforcementofpublicpolicyistheprerogativeofthestateandmaynotbeprivatized.
Indeed,the"Coperni-canturn"ofopt-outcollectivelitigationinterfereswiththeontologicalprinciplesofEuropeancivilprocedure:whileacivilactiontraditionallycentersaroundtheclaim,intheUSclassactiontheclaimscenteraroundtheprocedure.
Europeantraditionalismhasbeenoftenwrappedupinconstitutionalparlance,buttheargumentsagainstclassactions'constitutionalconformityhavefoundnoreec-tionintheconstitutionalcase-law.
Thissuggeststhatwhilecertainlimitsdoapply,opt-outmechanismsarenotoutrightunconstitutionalandtheymaybeconstitution-allywarrantedinsmallvaluecases,whichwouldverylikelynotbebroughttocourtanyway.
Thescholarshipisrepletewithpiecessupportingtheintroductionoftheopt-outmodelinEurope.
Disregardingthemisconceivedreferencestolegaltraditionandthephobiaofforeignlegalsolutions,onecanrarelyndanyanalysisconvincinglydemonstratingthattheintroductionoftheopt-outmodelinEuropewouldleadtoalitigationboom,settlementsforcedoutbyblack-mailingandabuses.
Theallegedrepercussionsofopt-outcollectivelitigationintheUSwouldnotoccurwhenthisregulatorymechanismistransplantedintoaEuropeanenvironment.
Legalrulesdonotoperateinavacuumbutarepartofalegal,social,cultural,andeconomicenvironment.
USlawcontainsalargesetofinstitutionsthatcatalyzetheopt-outclassaction'soperation.
InEurope,failingthiscatalyzingenvironment,theallegedexcessesoftheUSpracticearenottobeexpected.
ThisconclusionisunderpinnedbythelimitedEuropeanempiricalevidenceconcerningopt-outcollectiveactionsandbytheexamplesofforeignlegalsystemsthatarecomparabletotheEuropeanregulatoryenvironmentandhaveadoptedUS-styleclassactionschemes(Australia,Canada,Latin-Americancountries).
Asdemonstratedabove,inclassactioncasesgrouprepresentativeshavetheverysameblack-mailingpotential(ifany)astheplaintiffinanindividualaction.
TheUSlitigationlandscapeisshapedbylegalinstitutionslikepunitiveandtrebledamages,7Id.
8Ulen(2011:185,191).
9Foradetailedanalysis,seeNagy(2013:469,478–479).
6.
2EuropeanObjectionsandFearsAgainsttheOpt-OutSystem…117the"Americanrule"onattorney'sfees,one-way-costshiftingincertaincases,con-tingencyfees,entrepreneuriallawrmsandlitigiousattitudes.
Thisregulatoryandsocialenvironment,whichisresponsibleforwhatmanyEuropeansattributetoclassactions,iscompletelymissinginEurope.
6.
3TransatlanticPerspectives:ComparativeLawFramingTheregulatoryandsocialenvironmentsofcollectiveactionsdifferconsiderablyonthetwosidesoftheAtlantic.
ContrarytotheUS,"entrepreneuriallawyering"isvirtuallymissinginEurope,contingencyfeesareeitherprohibited(oravailablewithrestrictions)or,eveniflegal,arenormallynotavailableinthemarket;activeclient-acquiringandlawyeradvertisementsarebannedorheavilyrestrictedinmostEUMemberStates.
The"Americanrule"andespeciallyone-waycost-shifting,asprovidedbyvariousAmericanprotectivestatutes,areunknowntoEuropeanjurisdic-tions,whichtraditionallyfollowthetwo-waycost-shiftingrule.
Super-compensatorydamagesarenotavailableinEurope,withsomenarrowandinsignicantexceptionsinahandfulofcommonlawjurisdictions.
ThegenerousUSrulesonpre-trialdis-coveryhavesimilarlynocounter-part.
Thesedifferenceshavetwofoldconsequences.
First,theoperationandimpactofEuropeancollectiveactionsdifferconsiderablefromtheirAmericanancestorduetotheabsenceoftheabovepro-plaintiffincentives.
Second,EuropeanlegislatorshavetoaddressquiteafewregulatoryissuesthatdonotemergeintheUS.
Boththeoreticalanalysisandempiricaldataclearlysuggestthatthepurportednegativerepercussionsofopt-outcollectivelitigation(USclassaction)wouldnotemergeifthisregulatorymechanismisintroducedinEurope.
Thetheoreticalargu-mentsandthebriefaccountofempiricalevidencesuggestthat,whereastherelativelyshorttimethathaselapsedsincethewide-spreadappearanceofthesemechanisms(bothopt-inandopt-outsystems)inEuropedoesnotenableustopredictthelong-runconsequences,itissafetosaythatopt-outcollectiveproceedingswouldtriggernolitigationboominEurope.
ThisconclusionisunderpinnedalsobytheempiricalexperimentsofAustraliaandCanada,whichhavearegulatoryenvironmentdifferentfromtheUSinsomeoftherelevantaspects.
ThetransplantationofcollectiveactionsintoaEuropeanlegalandsocialenvi-ronmentraisesanarrayofnovelregulatoryquestions.
EuropeanlegalsystemslackthecounterpartsofUSlegalinstitutionsthatfacilitelitigationthroughtheprovisionofnancialincentives(one-waycost-shifting,con-tingencyfeesandpunitivedamages),makinglitigationnanceacrucialregulatoryissue.
Unfortunately,Europeancollectiveactionlawshavefailedtosettleorevenaddressthisproblem:whiletheyruledouttheAmericaninstitutionsthatstimulateclassactions,theyfailedtoreplacethesewithappropriatesubstitutes.
Arguably,Euro-peancollectiveactionshavelittlechancetobecomeeffectiveandself-sustaining,if,1186Conclusionsonewayoranother,appropriatenancialincentivesorfundingarenotprovidedfortoensurethatthegrouprepresentativegetscompensated(receivesapremium)forrunningnancialrisksintheinterestofthegroup.
Economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremiumornon-prot-oriented(public)fundingand,hence,hemaybeincitedtoespousethegroupmembers'claimsifheiscompensatedfortherisksherunswhenengagingincollectivelitigation.
Theeffectivenessandwidespreaduseofcollectivelitigationandthepotentialforabuseandadverseeffectsareinverselyproportionatetoeachother.
Ontheonehand,economicallyspeaking,thegrouprepresentative'sexpectedincomeandexpectedcostscannotbeequilibratedintheabsenceofanappropriateriskpremium.
Ontheotherhand,suchariskpremiumwouldmovetheEuropeanregulatoryenvironmentfromitscurrentpositiontowardsUSlaw.
TheEuropeanlegislatororlegislatorsneedtondthepointofequilibriumwherethemarginalbenetofeffectiveenforcementequalsthemarginalcostofabuseandadverseeffects.
Alternatively,theymayrefusetoprovideariskpremiumtothegrouprepresentative;empiricalevidenceshowsthat,mainlyduetonon-economicconsiderations,collectivelitigationmayalsobeworkableintheabsenceofarisk-premium,albeitonalow-keylevel.
WhileinUSclassactionsgrouprepresentatives,duetotheAmericanrule,arenotresponsibleforthedefendant'sattorney'sfeeseveniftheclassactionfails,inEuropetheprincipleoftwo-waycost-shiftingprevails,raisingtheregulatoryquestionofallocationbothinopt-inandopt-outsystems.
Itisgenerallyacceptedthattheopt-outscheme'sconstitutionalitymaybepreservedonlyifgroupmembersarefreedfromallliabilityandthegrouprepresentativerunsthefullriskastolegalcosts.
Thismakesthe"onlybenets"principle,whichprevailsinopt-outsystems,apeculiarelementoftheEuropeancollectiveaction'sarchitecture.
Thestrongestargumentfor"representationwithoutauthorization"andagainsttheallegationthatopt-outcollectiveactionsencroachonpartyautonomyisthatonlybenetsmayaccruetogroupmembers,soitwouldberedundanttorequireexpressauthorization.
Hence,thesesystemswereworkedoutinawaythatgroupmembersrunnoriskastolegalcosts;someofthemalsoprovidethatgroupmembersarecoveredbythenaljudgment'sresjudicataeffectsonlyiftheyexpresslyacceptitorifthatisintheirinterest.
Europeancollectiveactionsarenotmeanttohaveapublicpolicyroleandtheirfunctionislimitedtoensuringacompensatoryremedyforgroupmembers.
Astheconceptof"privateattorneygeneral"iscompletelyalientoEuropeanlegalsystemsandthegeneralattitudeisthatnancialincentivesmaygiveanunacceptablestimulus,for-protentities'aptnesstoservethepublicinterestisnormallyreceivedwithdoubt.
ThisexplainswhyinEuropestandinghasbeenoftenlimitedtopublicentitiesandnon-protorganizations.
6.
4EuropeanModelsofCollectiveActions…1196.
4EuropeanModelsofCollectiveActions:ATranssystemicOverviewInterestinglyandcounter-intuitively,10outofthe17EUMemberStatesthathaveadoptedcollectivelitigationschemescreatedsystemsbasedfullyorpartiallyontheopt-outprinciple(Belgium,Bulgaria,Denmark,France,Greece,Hungary,Portugal,Slovenia,SpainandtheUnitedKingdom)andonly7ofthemstucktotheopt-inprin-ciple(Finland,Germany,Italy,Lithuania,Malta,PolandandSweden).
Accordingly,whileitistruethatopt-outcollectivelitigationisnotavailableinthevastmajorityoftheMemberStates,thosecountrieswhichdecidedtocreateaspecialregimeallowedrepresentationwithoutauthorizationingeneraloringivensectors.
Thoughafewcountrieshaveregimesofgeneralscope,mostEuropeancollectivelitigationsystemshavealimitedambit(suchasconsumermatters),reectingthenotionthatcollectiveactionsshouldbelimitedtocaseswheretheyarehighlyneeded.
Somesystemshaveused"leapfrogging"toextendtheschemetofurthersectorsdemonstratingtheprecautiousapproachofEuropeanlegalsystemsastocollectivelitigation.
EuropeancollectivelitigationisnormallysubjecttomorestringentrequirementsthanUSclassactions.
Thepre-conditionsofcollectivelitigationnormallyembracethoseofUSclassaction(numerousity,commonality,typicalityandadequaterepre-sentation)butquiteafewsystemsgobeyondtheserequiringthatcollectivelitigationbeexpedientorsuperiortoindividuallitigationandthatthegroupbedenableandgroupmembersidentiablebymeansofthegroupdenition(especiallyincasetheopt-outschemeisused).
TheheroesofEuropeancollectivelitigationaregovernmentalandnon-governmentalnot-for-protorganizations(suchasadministrativeagencies,theattor-neygeneralandconsumerprotectionNGOs).
Althoughstandingisnotreservedsolelyforthem(infact,inseveralMemberStatestheirstandingoperatesinparal-leltothatofgroupmembersandonlyafewsystemslimitstandingexclusivelytopublicentitiesandnon-protorganizations),theyareexpectedtobetheauthorsofcollectiveactions(aslaw-rmsareintheUS).
Thereisacleartendencytoreserve"hardcases",whicharedifculttomanageandpresentahigherriskofabuse,forpublicentitiesandrecognizedcivilorganizations.
AccordingtoEuropeanthinking,governmentalandnon-governmentalnot-for-protorganizationsareassumedtobemoreattentivetothepublicinterestthanfor-protenterprises.
Althoughinopt-insystemsgroupmembersexpresslyjointheaction,contrarytothegrouprepresentative,theyareformallynotpartiestotheprocedure.
Theyareboundbythenaljudgmentbutinmostsystems,insteadofthem,itisthegrouprepresentativewhoisliablefortheprevailingdefendant'slegalcosts.
1206ConclusionsAsnotedabove,duetodoctrinalandconstitutionalreasons,Europeanopt-outcollectiveactionlegislationhasbeenimpregnatedbythe"onlybenets"principle:theencroachmentonpartyautonomyisjustiedbythefactthatonlybenetsaccruetogroupmembers.
Europeansystemshavebeenstrugglingremarkablywiththeimplementationofthisprinciple,producinginnovativeandidiosyncraticsolutions.
First,itisevidentthatinopt-outproceedingsgroupmembersmaynotbeliableforlegalcostsandthegrouprepresentativeshouldcarrythisburden.
Second,ithasbeenarguedthatpartyautonomyisrestrictedalsoiftheindividualgroupmemberisboundbyanunfavorablejudgment.
Hence,insomeEuropeansystems,theresjudicataeffectislimpinginrelationtogroupmembers.
Forinstance,inFrance,groupmembersareboundbythejudgmentonlyiftheyexpresslyacceptthecompensation.
InHungary,itisdubiousifinopt-outproceedingsavailableincompetitionandconsumerprotectionmattersthejudgment'sresjudicataeffectsextendtogroupmembers.
InPortugal,ifthecourtdecidesforthedefendantduetolackofevidence,thejudgmentwillnotbebindingongroupmembers;furthermore,asageneralrule,ifjustied,thecourtmayexemptgroupmembersofthejudgment'sresjudicataeffects.
Interestingly,although,asamatterofpractice,thisappearstobeofcrucialimpor-tanceforthesuccessofcollectiveactions,inmostsystems,collectiveawardscomeunderindividualenforcementandonlyahandfuloftheMemberStateshavemadeprovisionsforcollectiveenforcement.
TheabovemodellingiscrownedwiththerecentEuropeanproposalforacon-sumercollectiveaction.
InApril2018,theCommissionproposedtheadoptionofa"representativeaction"intheeldofconsumerprotectionlaw.
10TheproposeddirectiveisvirtuallybasedontheabovecommonprinciplesbasedonthecommoncoreoftheexistingEuropeanmechanisms.
GiventhatonethirdoftheMemberStateshasnocollectiveactionschemeatall,itisasignicantvirtueoftheproposeddirectivethat,ifadopted,itwillmakeconsumercollectiveactionsavailableineachandeveryMemberState.
Ontheotherhand,atthepresentstageofthelegislativeprocess,11asasimplecodicationofthe"collectiveactiontraditionscommontotheMemberStates",itissupposedtoentailnolandslideconceptualreform:ithasasec-toralapproach(consumerprotection),rigorouspre-conditions,confersstandingonqualiedrepresentativeentities,maintainsthe"loserpaysrule",rulesoutnancialincentives,suchascontingencyfeesandpunitivedamagesand,lastbutnotleast,evadesthedilemmaofopt-inandopt-outthroughleavingthechoicetoMemberStates.
1210SeeFootnote1.
11https://oeil.
secure.
europarl.
europa.
eu/oeil/popups/cheprocedure.
doreference=2018/0089(COD)&l=en.
Accessed20April2019.
12Article6.
6.
5ClosingThoughts:"SmallMoney,SmallFootball…1216.
5ClosingThoughts:"SmallMoney,SmallFootball,BigMoney,BigFootball"13ThedebateinEuropeon"whethertooptoutornottooptout"hasbecomefairlyrep-etitious.
Althoughthisisatrulyimportantissue,itseemstobeoutdatedinacertainsenseandislosingweightintheonlineagewheregroupmemberscansimply"clickin".
Thesuccessofcollectiveactionshingesonfunding,14includingthequestionofriskpremium.
Anopt-outsystemdoeslessenthegroup'sorganizationalcostssignif-icantlyandmakescollectiveactionspossibleincaseswheresuchcostsprovedtobeprohibitive.
However,collectiveactionscannotbetrulyeffectivewithoutappropriatefunding.
Thisdoesnotmeanthatnocaseswouldbebroughttocourt;thismeansthatthepracticalsuccessofcollectiveactionswouldnotbeasconsiderableasitshouldbe.
Thisisunderpinnedbybotheconomicanalysisandexperience:inEurope,thereare(relatively)successfulopt-inandunsuccessfulopt-outsystems.
Withoutslight-ingtherelevanceoftheopt-out-opt-incontroversy,itseemsthat,asamatteroffact,thepivotalquestionofcollectiveactionsisfunding.
Itisnotaco-incidence(thatis,notamerecorrelationbutcausation)thattheworld'smostsuccessfulcollectiveactionmechanismprovidesforappropriatefundingintheformofavarietyoflegalinstitutions(forexample,punitivedamages,trebledamages,one-waycostshifting).
However,ithastobestressedthattheneedforariskpremiumiscertainlynotanargumentagainsttheintroductionofanopt-outsystem,especially,becausethegrouprepresentativemayespousethecollectiveproceedingsalsofornon-economicreasons.
Collectiveactionscanworkwithoutarisk-premiumbuttheirintensitywillbelowerthanitcouldbe.
Asnotedabove,theenforcementofcollectiveclaims,liketheenforcementofindi-vidualclaims,hingesoncostsandnancing.
However,itisanimportantdifferencebetweenindividualandcollectiveactionsthat,inthelattercase,thereareconsid-erableorganizationalcosts,which,incertainmatters,mayprovetobeprohibitive.
Furthermore,duetotheinvolvementofathirdparty(grouprepresentative),15nanc-ingmaybecomemorecomplicated.
Grouprepresentativesareexpectedtotakeoverthegroup'scaseandtoinvestinthebusinessofsomeoneelse,withouthavingaclearprospectofreward.
Evenifreasonableexpensesareremunerated(compensat-ingtherepresentativeforthecostheincursintheinterestofgroupmembers),grouprepresentativeswillbedisinclinedtoundertaketheburdenofgrouprepresentation,unlesstheyaresecuredariskpremiumorreceivepublicfunding.
WhileEuropeanlegalsystemsrejectthoselegalinstitutionsofUSlawthataffordariskpremiumtogrouprepresentativesandthatmaketheUSclassactionoperational,theyfailto13FerencPuskás,HungarianFootballer,CaptainoftheGoldenTeam.
14Cf.
BritishInstituteofInternationalandComparativeLaw(2017:18–20).
15Thoughthegrouprepresentativemaybeagroupmember,hestillqualiesasathirdpartyastotheclaimsoftherestofthegroup.
1226Conclusionssuggestalternativemeasuresthatcouldhandlethisproblem.
Nonetheless,onewayoranother(throughariskpremiumorpublicfunding)grouprepresentativeshavetobefunded.
Attheendoftheday,someonehastopaythepiper….
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