CONSULTATION ON COLLECTIVE REDRESS GREEK MINISTRY OF JUSTICE

Transcription

1 CONSULTATION ON COLLECTIVE REDRESS GREEK MINISTRY OF JUSTICE Q 1 What added value would the introduction of new mechanisms of collective redress (injunctive and/or compensatory) have for the enforcement of EU law? The introduction of new forms of collective redress would be useful where there is no motivation from the part of consumers to bring their individual claims before the court due to their low value, complexity or difficulties of proof. The result in such cases is that the applicable substantive law cannot be enforced. New mechanisms of collective redress would reduce litigation cost and psychological barriers for consumers and could lead easier and quicker to out-of-court settlement. The attraction of higher media coverage of collective redress than individual litigation and the possible increase in liability costs for infringements of consumer protection legislation would produce also a preventive effect. Q 2 Should private collective redress be independent of, complementary to, or subsidiary to enforcement by public bodies? Is there need for coordination between private collective redress and public enforcement? If yes, how can this coordination be achieved? In your view, are there examples in the Member States or in third countries that you consider particularly instructive for any possible EU initiative? Private collective redress should be independent of enforcement by public bodies. A coordination between private collective redress and public enforcement is not necessary. The experience of Scandinavian lands (Denmark, Finland, Sweden), England and Ireland can be instructive regarding the combination of private and public collective redress. In Sweden, proceedings can be initiated by the Consumer Ombudsman on behalf of a group of consumers (group action), or by an association of consumers or wageearners on behalf of a group of consumers, however, only if the Consumer Ombudsman has declined himself to initiate proceedings. Private injunctive collective redress (by associations of consumers or wage-earners) is subsidiary to public enforcement (by the Consumer Ombudsman). In Finland, private injunctive collective redress (by associations of consumers) is subsidiary to public enforcement (by the Ombudsman). In Denmark both private (i.e. associations of consumers) and public bodies (Consumer Ombudsman) are entitled to injunctive collective redress. In England, in the area of injunctive collective redress both private (i.e. associations of consumers) and public bodies (i.e. Office of Fair Trading) can initiate the procedure. Regarding compensatory collective redress the first mechanism is the so called representative action (Civil Procedure Rules Part 19 II). The representative party must be someone with an interest in the case.

2 This principle seems to prevent consumer or trade associations from using this procedure. Also the Group Litigation Order (Civil Procedure Rules Part 19 III) does not seem to give standing to public or private bodies In Ireland both private and public bodies are entitled to injunctive collective redress according to European Communities (Protection of Consumers Collective Interests) Regulations Q 3 Should the EU strengthen the role of national public bodies and/or private representative organisations in the enforcement of EU law? If so, how and in which areas should this be done? Firstly, it should be noted that art. 3 of the directive 98/27/EC on injunctions for the protection of consumers' interests provides for that both public bodies and private representative organisations are entitled to injunctive collective redress on specific sectors. These sectors are according to the annex of the abovementioned directive misleading advertising, contracts negotiated away from business premises, consumer credit, pursuit of television broadcasting activities, package travel/holidays and tours, advertising of medical products, unfair terms in consumer contracts, distance contracts, contracts relating to the purchase of the right to use immovable properties on a timeshare basis. Further strengthening the role of public and private bodies regarding injunctive collective redress at EU level seems to be not necessary. Q 4 What in your opinion is required for an action at European level on collective redress (injunctive and/or compensatory) to conform with the principles of EU law, e.g. those of subsidiarity, proportionality and effectiveness? Would your answer vary depending on the area in which action is taken? An action at European level on collective redress (injunctive and/or compensatory) should be subsidiary to national law of Member States in cross-border cases, proportional to the goals set by the Treaty on the Functioning of the EU and effective by facilitating access to justice. Q 5 Would it be sufficient to extend the scope of the existing EU rules on collective injunctive relief to other areas; or would it be appropriate to introduce mechanisms of collective compensatory redress at EU level? The EU could extend the scope of the existing rules on injunctive collective redress in other areas such as telecommunications, transport, games of chance, construction and postal services. Furthermore, it would be appropriate to introduce mechanisms of collective compensatory redress at EU level. Q 6 Would possible EU action require a legally binding approach or a nonbinding approach (such as a set of good practices guidance)? How do you see the respective benefits or risks of each approach? Would your answer vary depending on the area in which action is taken? Possible EU action requires a legally binding approach in the form of a Regulation or a Directive. The choice of Regulation on the matter of collective redress would lead to unification as it would be binding in its entirety and directly applicable in all Member

3 States. The main benefit from the choice of a Directive would be the achievement of a harmonization on the matter of collective redress. A Directive would be binding, as to the result to be achieved, upon each Member State to which it is addressed, but would leave to the national authorities the choice of form and methods. Q 7 Do you agree that any possible EU initiative on collective redress (injunctive and/or compensatory) should comply with a set of common principles established at EU level? What should these principles be? To which principle would you attach special significance? An EU initiative on collective redress should comply with common principles such as effective and efficient access to collective redress, adequate and extensive information, respect of the principle of representation, availability of adequate funding and a chance for consensual resolution before beginning of court proceedings. Special significance should be attributed to safeguards against abusive litigation. Q 8 As cited above, a number of Member States have adopted initiatives in the area of collective redress. Could the experience gained so far by the Member States contribute to formulating a European set of principles? Yes, definitely the experience gained so far by the Member States could contribute to formulating a European set of principles. Q 9 Are there specific features of any possible EU initiative that, in your opinion, are necessary to ensure effective access to justice while taking due account of the EU legal tradition and the legal orders of the 27 Member States? See above answer to question 7. Q 10 Are you aware of specific good practices in the area of collective redress in one or more Member States that could serve as inspiration from which the EU/other Member States could learn? Please explain why you consider these practices as particular valuable. Are there on the other hand national practices that have posed problems and how have/could these problems be overcome? Yes, as inspiration could serve the German Capital Market Model Claims Act of 2005 (Kapitalanleger-Musterverfahrensgesetz or KapMuG), which was designed to strengthen the position of investors under securities law. The main conception is to judge the common factual and legal questions arising in a group of similar legal actions only once with a binding effect for all the affected plaintiffs. It concerns a two step procedure. Specifically the common factual and legal questions will be decided in a collective procedure, which will then have to be applied to the individual cases. The law applies to damage that occurs in series to many capital investors, independently from the amount of the damage. If several affected individuals bring an action for damages due to wrong, misleading or omitted information on the capital market or if they seek the fulfillment of a contract pursuant to the Law Governing the Purchase and Acquisition of Stocks, the plaintiffs and the defendants in each individual lawsuit are then entitled to request the collective procedure. Once ten such

4 requests have been made, the collective procedure is initiated. In this case, all individual lawsuits for which the outcome of the collective procedure is relevant are suspended, and the individual claimants become included in the collective procedure unless they withdraw their claim. The judgment in the collective procedure shall be binding on all individual cases in process at the same time as the collective procedure, including those cases that have been brought after the collective procedure has been initiated. The example of German Capital Market Model Claims Act of 2005 is valuable because the common factual and legal questions of all similar individual cases are decided in a test collective procedure saving in that way time and cost. Furthermore all interested parties have the chance to participate in the test case procedure and contribute to the decision which is binding for all individual cases regarding the common issues. Q 11 In your view, what would be the defining features of an efficient and effective system of collective redress? Are there specific features that need to be present if the collective redress mechanism would be open for SMEs? An efficient and effective system would be a test case procedure with the following features: notification of the test case procedure to all interested parties, an opt-in system, a loser pays principle, distribution of costs, an exclusive jurisdiction, a binding decision, or in the case of settlement, its judicial approval. Specific features for a collective redress mechanism open for SMEs are not necessary. Q 12 How can effective redress be obtained, while avoiding lengthy and costly litigation? An effective redress system could be achieved by adapting following features: Introduction of a fast-track procedure, restriction of remedies and distribution of costs on a pro rata basis. Q 13 How, when and by whom should victims of EU law infringements be informed about the possibilities to bring a collective (injunctive and/or compensatory) claim or to join an existing lawsuit? What would be the most efficient means to make sure that a maximum of victims are informed, in particular when victims are domiciled in several Member States? For the purpose of publicity and in order for the victims of all Member States to join an existing collective action be a Europe-wide online electronic registry, which would inform of every stage of such a collective action would be a solution. Q 14 How the efficient representation of victims could be best achieved, in particular in cross-border situations? How could cooperation between different representative entities be facilitated, in particular in cross-border cases? The efficient representation of victims in cross-border situations could be best achieved through actions that are brought by groups of consumers. Cooperation between different representative entities in cross-border cases could be facilitated through a special established Europe-wide network for that purpose.

5 Q 15 Apart from a judicial mechanism, which other incentives would be necessary to promote recourse to ADR in situations of multiple claims? ADR proceedings should be shorter, more flexible and less costly than collective court proceedings. Q 16 Should an attempt to resolve a dispute via collective consensual dispute resolution be a mandatory step in connection with a collective court case for compensation? An attempt of collective consensual dispute resolution should be a voluntary step before initiating a collective court proceeding. Q 17 How can the fairness of the outcome of a collective consensual dispute resolution best be guaranteed? Should the courts exercise such fairness control? The successful outcome of a collective consensual dispute resolution should be approved by the courts within the frame of a fairness control. Q 18 Should it be possible to make the outcome of a collective consensual dispute resolution binding on the participating parties also in cases which are currently not covered by Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters? No, that would be not necessary. Q 19 Are there any other issues with regard to collective consensual dispute resolution that need to be ensured for effective access to justice? Mechanisms of collective consensual dispute resolution should be developed and designed especially for collective claims being adjusted to their characteristics. Q 20 How could the legitimate interests of all parties adequately be safeguarded in (injunctive and/or compensatory) collective redress actions? Which safeguards existing in Member States or in third countries do you consider as particularly successful in limiting abusive litigation? The legitimate interests of all parties could be safeguarded by giving them the chance to join and participate in such injunctive and/or compensatory collective redress actions. In case of abusive litigation the appropriateness of imposing a (financial) sanction shall be considered following the example of Germany, Greece, France and Spain.

6 Q 21 Should the "loser pays" principle apply to (injunctive and/or compensatory) collective actions in the EU? Are there circumstances which in your view would justify exceptions to this principle15? If so, should those exceptions rigorously be circumscribed by law or should they be left to case-bycase assessment by the courts, possibly within the framework of a general legal provision? The loser pays principle should apply in any case of collective redress without exception. Q. 22 Who should be allowed to bring a collective redress action? Should the right to bring a collective redress action be reserved for certain entities? If so, what are the criteria to be fulfilled by such entities? Please mention if your reply varies depending on the kind of collective redress mechanism and on the kind of victims (e.g. consumers or SMEs). Injunctive collective actions should be able to bring both public and private bodies. Compensatory collective actions should be reserved only for private bodies irrespective of the kind of victims (e.g. consumers or SMEs). Adequate representation of all victims by such private bodies should be safeguarded. Q 23 What role should be given to the judge in collective redress proceedings? Where representative entities are entitled to bring a claim, should these entities be recognized as representative entities by a competent government body or should this issue be left to a case-by-case assessment by the courts? The judge in collective redress proceedings should have an active role. Court management following the example of UK Group Litigation Order could be a solution. The standing of the representative entities should be an issue left to a caseby-case assessment by the courts of Member States. Q 24 Which other safeguards should be incorporated in any possible European initiative on collective redress? The right for any interested party to join a collective redress proceeding (opt-in system) within a wide time limit in order to have the chance to contribute to it. Q 25 How could funding for collective redress actions (injunctive and/or compensatory) be arranged in an appropriate manner, in particular in view of the need to avoid abusive litigation? Funding for collective redress should be provided by the interested parties with their own resources. Q 26 Are non-public solutions of financing (such as third party funding or legal costs insurance) conceivable which would ensure the right balance between guaranteeing access to justice and avoiding any abuse of procedure? Third party funding or legal costs insurance could be a solution, though in that case some safeguards from abuse of procedure should be ensured.

7 Q 27 Should representative entities bringing collective redress actions be able to recover the costs of proceedings, including their administrative costs, from the losing party? Alternatively, are there other means to cover the costs of representative entities? Yes, the loser pays principle should also apply in that case. Alternatively, the costs of representative entities could be covered by their own means (i.e. in case of private bodies from the financial contributions of their members). Q 28 Are there any further issues regarding funding of collective redress that should be considered to ensure effective access to justice? No. Q 29 Are there to your knowledge examples of specific cross-border problems in the practical application of the jurisdiction, recognition or enforcement of judgments? What consequences did these problems have and what counterstrategies were ultimately found? A consumer association, the VKI brought an action before the Commercial Court of Vienna seeking an injunction against Mr Henkel to prevent him from using the contested terms in contracts concluded with Austrian clients. Mr Henkel claimed that the Austrian courts had no jurisdiction. In his submission, the action brought by the VKI cannot be regarded as relating to tort, delict or quasi-delict within the meaning of Article 5(3) of the Brussels Convention on the ground that there has been neither harmful behaviour nor damage suffered within the territorial jurisdiction of the court seized. That Court found that the VKI was not pleading any damage arising out of a tort or delict and hence declared that it had no jurisdiction. The High Court of Austria (Oberster Gerichtshof) took the view that, in those circumstances, the outcome of the case before it required an interpretation of the Brussels Convention and it therefore decided to stay proceedings and to refer the following question to the Court for a preliminary ruling: Does the right to obtain an injunction to prohibit the use of unlawful or unconscionable general terms and conditions provided for in Paragraph 28 of the [KSchG], which is asserted by a consumer protection organisation pursuant to Paragraph 29 of the KSchG and in accordance with Article 7(2) of... Directive 93/13/EEC..., constitute a claim arising out of matters relating to tort, delict or quasi-delict which may be asserted in courts with the special jurisdiction provided for in Article 5(3) of the Brussels Convention...? The European Court of Justice decided that a preventive action brought by a consumer protection organisation for the purpose of preventing a trader from using terms considered to be unfair in contracts with private individuals is a matter relating to tort, delict or quasi-delict within the meaning of Article 5(3) of that convention. Regarding a compensatory collective action in cross border cases the application of Art. 5 (3) of the Regulation 44/2001 could be problematic. Taking into consideration the Case C-68/93 Shevill and Others [1995] ECR I-415 more than one compensatory collective actions could be brought before the Courts of several Member States depending on where the damage took place and where the damage was suffered. To deal with this problem there should be a special jurisdiction in a cross border

8 compensatory collective action providing jurisdiction only to the Court of the Member State where the damage took place. Q 30 Are special rules on jurisdiction, recognition, enforcement of judgments and /or applicable law required with regard to collective redress to ensure effective enforcement of EU law across the EU? Regarding jurisdiction there should be established a special rule which would attribute exclusive jurisdiction to the courts of the place of the event which gives rise to and is at the origin of that damage. The mutual recognition and enforcement of a decision or settlement achieved in a cross-border collective action by all Member States should be also established. Q 31 Do you see a need for any other special rules with regard to collective redress in cross-border situations, for example for collective consensual dispute resolution or for infringements of EU legislation by online providers for goods and services? No. Q 32 Are there any other common principles which should be added by the EU? See above answer to Question 7. Q 33 Should the Commission's work on compensatory collective redress be extended to other areas of EU law besides competition and consumer protection? If so, to which ones? Are there specificities of these areas that would need to be taken into account? The Commission's work on compensatory collective redress could be extended to environmental law. Due to accidents which result in environmental pollution the availability of collective redress would provide for victims access to justice. Q 34 Should any possible EU initiative on collective redress be of general scope, or would it be more appropriate to consider initiatives in specific policy fields? It would be more appropriate if any possible EU initiative could focus on specific policy fields, such as competition, consumer protection and environment.