EJF issues first comprehensive Monitoring Report on Collective Redress Regulation in Europe

Following the entry into force of the EU Directive on Representative Actions on 24^th December 2020, Member States must now focus on the transposition of the Directive.

For this reason, EJF has launched its first “Monitoring Report on Collective Redress Regulation” in February 2021.

EJF’s Monitoring Report provides an overview of the collective redress mechanisms for, so far, 13 selected countries in Europe and the impact that the transposition of the Directive may have.  

Findings show that in numerous countries, existing collective action legislation is not expected to change. However, exceptions can be found in France and Spain, and Member States - like Ireland – which currently lack collective actions in their systems, or which are without a redress functionality in their existing collective action legislation.

With regard to procedural safeguards, one of the key findings is that on third party litigation funding (TPLF), there is hardly any regulation. Nevertheless, it is important to underline that TPLF is on rise in countries like Germany, The Netherlands, and the United Kingdom. In addition, TPLF is an established way of financing disputes and plays an increasing role in the so-called Austrian-style class action. In terms of admission safeguards, the analysis showed an important fragmentation of conditions. An important key barrier to the potential spreading of class actions domestically is the ‘opt-in principle’, although we see that this principle is often missing.

Furthermore, a gap analysis was conducted with regards to Qualified Entities (QE), where, according to the analysis only a few Member States, like Germany or Spain, have already legislation in place including the criteria as requested in the Directive.

From our analysis of in- and out-of-court cases, it can be seen that there are significant differences between the countries analysed. As regards court judgments handed down in Q1/Q2 2020, the Netherlands appears to be the most active country when it comes to collective action judgments.

Finally, it should be noted that the preparation of the monitoring report has provided interesting insights on the upcoming transposition of the Directive. Of course, we need to keep in mind that different countries move at different speeds. Much depends on additional factors including for example, national elections, already existing regulatory initiatives, and in-place collective redress measures.

For further information on the monitoring report or on country-specific information, please do not hesitate to contact us.