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In this post I will dwell on\u00a0the new collective actions for the protection of consumers\u2019 interests provided for in the EU proposed legislation named the \u201cNew Deal for Consumers\u201d.<\/p>\n
In 1980,\u00a0Franco Battiato<\/a>, a famous Italian pop singer, released a song called \u201cUp Patriots to Arms<\/a>\u201c, that quickly became one of its most known hits. The song\u2019s chorus is goes something like this:<\/p>\n \u201cUp Patriots to Arms, engagez-vous! Contemporary music gets me down!<\/em>\u201c<\/p>\n This verse is a sort of commander\u2019s exhortation to (emblematically) take the weapons and fight for a common cause. Similarly, the\u00a0new EU rules on consumer protection<\/strong>\u00a0allow people to unite in collective actions to exercise their rights.<\/p>\n My colleagues Alessandro Ferrari and Laura Borelli in two previous posts (available here <\/a>and here<\/a>) gave an introduction about the \u201cNew Deal for Consumers<\/a>\u201c, i.e. the new package of proposals that aims at raising the level of protection afforded to consumers and decrease administrative burdens for companies operating at EU level. This package is composed of,\u00a0inter alia<\/em>,<\/p>\n EU has already established solid rules affording consumer protection, that make the EU consumers\u2019 legal framework one of the strongest in the world. Nonetheless, tricky cases such as the Dieselgate scandal have revealed that it is hard to concretely enforce them. In particular, in a recent\u00a0report<\/a>, the EU Commission found out that the\u00a0risk of infringements of EU law affecting the collective interests of consumers is increasing due to economic globalisation and digitalisation<\/strong>.<\/p>\n Businesses infringing EU laws may affect thousands or even millions of consumers with misleading advertisement or unfair standard contract terms in different economic sectors. Because of the increase in cross-border trade and EU-wide commercial strategies, these infringements gradually also involve consumers not just in one, but also in different Member States. Furthermore, the need for strengthening EU action on collective redress has also been identified by the European Parliament on several occasions (see, amongst other things, its 2012 Resolution \u201cTowards a Coherent European Approach to Collective Redress<\/a>\u201c).<\/p>\n The Proposal clearly aims at reinforcing the current framework on collective actions of consumers in a wide range of industries, such as financial services, energy, telecommunications, health and the environment.<\/p>\n The true motto of the Proposal is the\u00a0efficiency of the procedure<\/strong>, since EU Member States will have to ensure \u201cdue expediency<\/strong>\u201d of civil procedures and that procedural costs do not represent a financial obstacle to bringing representative actions. In this regard, consumers will have to be appropriately made aware of the outcome of such proceedings and how they will benefit from them.<\/p>\n Furthermore, according to the Proposal, an alternative of the judicial decision will be represented by\u00a0collective<\/strong>\u00a0out-of-court settlements<\/strong>, aiming at restoring harmed consumers. Such extra-judicial solutions should be encouraged both before the representative action is brought and at any stage of the representative action.<\/p>\n The Proposal is pursuing a\u00a0balance between enabling access to justice\u00a0to safeguard consumers\u2019 interests\u00a0and ensuring appropriate safeguards from abusive litigation<\/strong>. Indeed, the representative actions may be brought only by\u00a0qualified entities<\/strong>\u00a0that must meet minimum reputational criteria \u2013 e.g. they must be regularly based non-profit entities and pursue a legitimate interest in safeguarding compliance with the relevant EU law. These high thresholds strongly ensure that frivolous actions are brought to attention of the judges.<\/p>\n The Proposal will also allow such qualified entities to bring representative actions seeking different types of adequate measures, depending on the circumstances of the case (i.e. injunctive or compensatory redress).<\/p>\n These innovations will significantly change the EU legal framework. With a bit of luck, the legislative actions of the \u201cNew Deal of Consumers\u201d will become law in May 2019. At that point, the EU Member States will be required to implement the provisions of the Directive in their domestic legal framework.<\/p>\nThe \u201cNew Deal for Consumers\u201d<\/strong><\/h2>\n
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The need to protect citizens against infringements of EU laws<\/strong><\/h2>\n
More efficiency for consumers\u2019 representative actions<\/strong><\/h2>\n
Access to consumers\u2019 actions will not lead to abuses<\/strong><\/h2>\n