U.S.-Style Class Actions Come to Europe

NO SAFEGUARDS? NO COLLECTIVE ACTIONS

67% of consumers do not support the introduction of collective action lawsuits in their country without safeguards.

Source: A 'Fair Deal' for Consumers? An Update on EU Consumer Attitudes Towards Collective Actions and Litigation Funding. July 2018. Institute for Legal Reform.

SAFEGUARDS MUST BE CONSISTENT

Nearly 82% of consumers feel it is important that collective action safeguards are made consistent across the EU.

Source: A 'Fair Deal' for Consumers? An Update on EU Consumer Attitudes Towards Collective Actions and Litigation Funding. July 2018. Institute for Legal Reform.

CONSUMERS DON'T TRUST LITIGATION FUNDERS

Just 5% of consumers believe that litigation funders will ensure that collective action cases operate in consumers' best interests.

Source: Supporting Safeguards: EU Consumer Attitudes Towards Collective Actions and Litigation Funding. September 2017. Institute for Legal Reform.

CONSUMERS WANT LITIGATION FUNDING SAFEGUARDS

78% of consumers support the introduction of safeguards for third party litigation funding.

Source: A 'Fair Deal' for Consumers? An Update on EU Consumer Attitudes Towards Collective Actions and Litigation Funding. July 2018. Institute for Legal Reform.

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The EU Directive on Collective Actions

The EU Directive on Representative (Collective) Actions was officially adopted by the European Parliament in November 2020. The Directive requires each Member State to establish a collective action system to allow consumers to sue for damages. While the Directive contains some safeguards to prevent abusive litigation, it does not go far enough, and clever profiteers could exploit its loopholes.

Member States now have two years to transpose the Directive into their national laws. National governments will determine crucial features of their country’s redress system, such as how much control third parties, like litigation funders, will have over a claim and whether consumers will have the opportunity to consent to be part of a lawsuit.

This is an opportunity for policymakers to improve the Directive with much-needed safeguards for consumers and businesses. They should take heed of the advice given here, and resist the siren calls of litigation entrepreneurs and speculators.