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European Parliament Weighs Access to Justice for All

November 21, 2012

The European Union may have a single market, but for those interested in consumer, shareholder and/or human rights issues, the legal systems of the EU’s member states are anything but uniform. Of the 27 member states in the EU, 17 currently have legal provisions for collective redress (e.g., class actions), and the rest do not. However, the EU’s executive body, the European Commission, and the European Parliament are considering the concept of a uniform mechanism for the entire EU.

Research done by the public opinion analysis sector of the European Commission, known as Eurobarometer, has shown strong public interest in having access to collective redress, but European lawmakers not entirely familiar with the concepts and implementation of collective redress are still in the process of learning and evaluating how different states’ systems work in practice to bring either injunctive and/or compensatory relief to the injured. Toward this end, in November the European Parliament and the American Bar Association’s International Law Section held a two-day conference, titled “Increasing Access to Justice Through E.U. Class Actions,” for litigators and policy makers at the European Parliament in Brussels.

With world-class panelists and speakers from the global legal community, the conference offered tracks for both litigators and policy makers, as well as plenary sessions uniting the attendees “to discuss whether class actions bring increased access to justice for European citizens concerned about financial harm, competition, consumer protection, human rights, environmental damage, employment discrimination, and other common claims.” Some of the EU’s larger member states like Germany and France have neither opt-in nor opt-out class actions, and, as keynote speaker and former European Parliament Vice President Diana Wallis observed, “On the one hand, Eurobarometer surveys show that 79 percent of Europeans would be more willing to defend their rights in court if they could join other consumers complaining about the same thing. On the other hand, there are 14,000 lobbyists in Brussels, mostly opposed to any form of class actions.”

Robbins Geller attorney Nathan W. Bear was a panelist at two of the conference’s sessions. The first, in the litigator track, was “Myths and Realities of Financing Collective Actions,” where panelists discussed the differences between U.S. and various EU member states’ methods (or lack thereof) of litigation funding for collective redress with respect to (1) legal aid, (2) third-party commercial financing, (3) self-financing law firms, (4) consumer associations, and (5) victims. Where some U.S. firms have the capacity to self-finance large class actions, European firms are often barred by professional rules and instead have to collect hourly fees in any attempt at collective redress, which discourages access to justice.

Bear’s second panel was a plenary session titled “How Claimants Can Recover Compensation Through Collective Actions Prosecuted by Victims,” where the speakers not only discussed the mechanics of compensation (and the use of settlement administrators in the United States), but also the different procedures one must perform to become a class member. In England, a “Group Litigation Order” is required, which gives judicial approval for a test case to proceed on behalf of the group. In the Netherlands, a foundation can be established, and the victims may assign their claims in order to participate. The differences between countries’ systems of opt-in classes (Finland, France, Germany, Italy, Poland, Spain, Sweden, the United Kingdom and Denmark) and opt-out classes (Netherlands, Portugal, the United States, and in some instances also Norway and Denmark) were discussed with a view to a European Parliament resolution earlier in 2012 that recommended opt-in classes where members must be identified at the beginning of litigation, notwithstanding a July 2011 European Parliament report that stated that all of the existing mechanisms “fail on full effectiveness test, except for schemes running [an] opt-out model,” and that “several Member States consider opt-out mechanisms to remedy general low participation resulting from opt-in.”

Given the substantial public support for more participation, and the previous findings on the efficacies of opt-out vs. opt-in systems, the EU is likely to face tough deliberations before reaching a union-wide decision. Robbins Geller is proud to provide input to these deliberations, fighting for the rights of investors.


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