Table of contents Summary 5 Preface 7 I. Introduction 11 A. Setting the scene 11 1. Context 11 2. Methodology 15 3. Structure 19 B. The national mechanisms introduced 20 1. England & Wales: Group Litigation Order 21 2. Germany: Capital Market Model Claim Procedure 26 3. Italy: Azione collettiva risarcitoria 29 4. Portugal: Acção popular 32 5. Spain: Acción colectiva para la defensa de derechos e intereses de los consumidores y usuarios 35 6. Sweden: Grupprättegång 38 II. Part One. Comparative analysis 41 Section One. Role of the court at the initiation of the collective redress proceedings 43 A. Problems that need to be avoided 45 1. Unmeritorious claims 45 2. Inappropriate rerpesentative claimant 49 3. Too large or imprecise group definition 53 B. Comparative analysis 60 1. Role of the court once faced with a collective claim 60 1.1. Filtering the claims on the basis of admissibility requirements 60 1.2. Giving a separate ruling on admissibility 79
316 The role of the court in collective redress litigation 2. Role of the court when ensuring the suitability of the representative claimant 82 2.1. Assessing the adequacy of representation of the repre sentative claimant and his financial capacity 82 3. The role of the court when verifying the way the repre sented group is constituted 92 3.1. Choosing between opt-in or opt-out proceedings 92 3.2. Fixing the modalities of the option s exercise 92 3.3. Verifying the modalities of the option s exercise 107 C. Concluding summary 111 1. The filtering stage 111 1.1. Identified concerns and abuses 111 1.2. Interests at stake 111 1.3. Potential solutions 111 1.4. Approach of the selected Member States to the proposed solutions 111 2. Judicial verification of the representative claimant 114 2.1. Identified concerns and abuses 114 2.2. Interests at stake 114 2.3. Potential solutions 114 solutions 114 3. Judicial verification of the constitution of the represented group 116 3.1. Identified concerns and abuses 116 3.2. Interests at stake 116 3.3. Potential solutions 116 3.4. Approach by the selected Member States to the proposed solutions 117 Section Two. Role of the court during the progress of the collective redress proceedings. 121 A. Problems that need to be avoided 123 1. Impression of judicial arbitrariness 123 2. Lengthy, complex, expensive and fishing-expedition processes 127 2.1. Additional management tools to deal with common and individual issues 127 2.2. Additional management tools to deal with evidence 129 3. Inadequate protection of represented group members interests 131
Table of contents 317 B. Comparative analysis 136 1. Exclusively competent, specially trained and experienced courts as a safeguard against judicial arbitrariness 136 2. Case management 138 2.1. Existing case management powers 138 2.2. Additional management tools to help the court to deal with common and individual issues 146 2.3. Additional management tools to help the court to supervise the parties collection and preparation of evidence 153 3. The role of the court as protector of the absent represented group members interests 156 3.1. Communicating with the represented group members during the trial 156 3.2. Considering the participation of the represented group members 157 3.3. Maintaining supervision of the adequacy of representation of the representative claimant 159 3.4. Encouraging and approving collective settlements 161 C. Concluding summary 171 1. Enhanced and improved management of the case 171 1.1. Identified concerns and abuses 171 1.2. Interests at stake 171 1.3. Potential solutions 171 1.4. Approach by the selected Member States to the proposed solutions 171 2. Active conduct of the trial: a responsibility shared by the court and the parties 173 2.1. Identified concerns and abuses 173 2.2. Interests at stake 173 2.3. Potential solutions 173 solutions 173 3. A management of the case sensitive to the interests of the represented group members 175 3.1. Identified concerns and abuses 175 3.2. Interests at stake 175 3.3. Potential solutions 175 3.4. Approach by the selected Member States to the proposed solutions 175
318 The role of the court in collective redress litigation Section Three. Role of the court at the judgement stage 179 A. Problems that need to be avoided 181 1. Dilution of the individual rights in the interest of the group 181 1.1. Confusion between generic and individual issues 184 1.2. Over-compensation and/or under-compensation 185 1.3. Punitive damages 190 2. Extensive and abusive binding effect of the judgement 191 3. Capture of the mass dispute by intermediaries 193 3.1. Abuses encouraged by third-party funders 195 3.2. Entrepreneurial lawyering 196 B. Comparative analysis 199 1. Role of the court in deciding the terms of the final verdict 199 1.1. Choosing between a final and/or an interim judgement 199 1.2. Assessing and calculating the mass damage 205 1.3. Choosing the form of compensation 209 2. Role of the court in assessing the extent of the binding effect of the final decision 214 3. Role of the court in monitoring funding arrangements 221 3.1. Third-party funding agreements 221 3.2. Lawyers funding agreements 222 C. Concluding summary 225 1. The final verdict 225 1.1. Identified concerns and abuses 225 1.2. Interests at stake 225 1.3. Potential solutions 225 1.4. Approach by the selected Member States to the proposed solutions 226 2. The binding effect of the final verdict 229 2.1. Identified concerns and abuses 229 2.2. Interests at stake 229 2.3. Potential solutions 229 solutions 229 3. Funding arrangements 231 3.1. Identified concerns and abuses 231
Table of contents 319 3.2. Interests at stake 231 3.3. Potential solutions 231 3.4. Approach by the selected Member States to the proposed solutions 232 Section Four. Role of the court at the distribution stage 233 A. Problems that need to be avoided 235 1. Ineffective judgement due to difficulties linked to the distribution of the award 235 1.1. Concern that the defendant does not in practice pay for its liability 236 1.2. Concern that direct compensation is prohibitively expen sive and/or time consuming 237 1.3. Concern that the strict application of the traditional law of damages to direct distribution of mass award is pro hi bitively expensive and/or time-consuming 239 2. Unclaimed damages 242 B. Comparative analysis 245 1. Role of the court in the execution of the decision and in the distribution of damages 245 1.1. Choosing between individual and collective recovery 245 1.2. Choosing between direct and indirect compensation 248 1.3. Deciding the supplementary steps to be undertaken by individuals in order to obtain compensation 249 1.4. Appointing a claim administrator to administer and allocate the award 250 2. Role of the court in the affectation of unclaimed damages 251 C. Concluding summary 252 1. Distribution of compensation 252 1.1. Identified concerns and abuses 252 1.2. Interests at stake 252 1.3. Potential solutions 252 1.4. Approach by the selected Member States to the proposed solutions 253 2. Unclaimed damages 255 2.1. Identified concerns and abuses 255 2.2. Interests at stake 255
320 The role of the court in collective redress litigation 2.3. Potential solutions 255 solutions 255 III. Part Two. Recommendations 257 A. General preliminary remarks 259 B. Role of the court at the initiation of the collective redress proceedings 263 1. Gatekeeping responsibility Role of the court at the initiation of the collective proceedings 263 2. Approving the suitability of the representative claimant 267 3. Monitoring the constitution and definition of the represented group 269 C. Role of the court during the progress of the collective redress proceedings 274 1. An enhanced and improved management of the case 274 2. Conducting the trial actively: a responsibility shared by the court and the parties 276 3. Managing the case in a way which is sensitive to the interests of the represented group members 278 D. Role of the court at the judgment stage 283 1. Deciding the terms of the final verdict 283 2. Supervising the funding agreements 289 E. Role of the court at the distribution stage 292 1. Role of the court in the execution of the judgement and in the distribution of damages 292 2. Role of the court in the affectation of the unclaimed damages 296 Addendum 297 Bibliography 303 Index 313 Table of contents 315