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Representative actions are a type of collective action where claimants are represented by an organisation/body. Those organisations can be in principle private or public. The objective of a representative action is to clarify questions regarding the breach of law and redress. More specifically, the European Commission defines it as “an action for the protection of the collective interests of consumers to which the consumers concerned are not parties”.
The European Commission published a proposed Directive on Representative Actions in April 2018, as part of its New Deal for Consumers Package. This regulatory package also comprises the Directive on better enforcement and modernisation of EU consumer protection rules known as Omnibus Proposal, for which an agreement was reached in April 2019.
One of the main objectives of the European Commission is to allow each and every EU citizen to have compensatory collective redress tools at national level. The European Commission originally identified nine Member States which did not provide such mechanisms (Estonia, Czech Republic, Ireland, Latvia, Cyprus, Greece, Hungary, Luxembourg and, Slovakia).
By introducing the representative actions’ proposal, the European Commission proposed to enlarge the scope of the former Injunction Directive by including a redress part. The suggested text couples injunction proceedings - which order specific action or cessation of action - with collective redress proceedings.
The current representative actions approach of the EU, however, should take into consideration the following points outlined by expert analysis and independent academic research:
- More clarity is needed on the Proposal’s implications on cross-border litigations. The current proposal risks disrupting already existing, effective legal systems implemented in Europe.
- More regulatory harmonisation should be achieved. The Proposal disregarded important safeguards that the European Commission recommended itself in 2013 to prevent abuses. This approach risks provoking a “race to the bottom” in regulation and consequently would lead to forum shopping.
- Collective in-court litigation is an old technique: it is complex, costly, lengthy and open to abuse. The right approach should build on Alternative Dispute Resolution (ADR) mechanisms, such as ombudsmen or public supervisory bodies, which have proven to be more effective.
Where do we stand
On 26th of March 2019, the European Parliament adopted in a plenary session its position on the Directive on Representative actions, for which MEP Geoffroy Didier (EPP, France) is rapporteur. The text was adopted with 579 votes in favor to 43 against and 33 abstentions. While the text adopted is far from being an ideal solution and several issues remain unanswered, it still constitutes a considerable advancement compared to the Commission's original proposal.
On 28th of November 2019, in addition the Council adopted its position.
Mid of January 2020, the three institutions (European Parliament, Council and European Commission) started the inter-institutional negotiations. This process of informal conversation, known as trilogues, aims at reaching an agreement on the Directive on Representative Actions.
On 22nd of June, the European Parliament and the Council reached an agreement during the 4th trilogue. COREPER adopted the result on 30th of June.
It is expected that the final formal voting at European Parliament's plenary will take place in September, which makes it likely that the Directive will be published in the official journal in October 2020.