Shelley Explains Developments in EU Collective Actions

In an article for the newsletter of the International Bar Association's Consumer Litigation Committee, Shook Partner Marc Shelley examines steps taken by the European Commission (EC) to standardize class action litigation in the EU, finding that some standardization has already occurred. "The number of these examples suggests that a critical mass of Member States already has some or all of the recommended features," Shelley explains. "The debate to come is whether the Commission will agree that sufficient progress has been made or, instead, that anything short of complete uniformity will justify stronger measures to bring all Member States in line."

Shelley summarizes the EC's previous developments on collective redress, then explains how its Recommendation and the November 2014 Directive on Antitrust Damages Actions fit into that context. He then shows that some of the EC's recommendations duplicate existing standards, including:

  • a determination of admissibility at the earliest opportunity;
  • the availability of compensatory and injunctive relief;
  • standing requirements for qualified representative associations and public authorities;
  • a default to the opt-in model under most circumstances; and
  • the continued use of the loser-pay rule, along with the regulation of litigation funding and a prohibition on contingency fees.

Shelley finds the two-year timeline of incorporating collective redress standards unrealistic. "The efforts observed in the past ten years make a strong case for allowing this evolution to continue naturally and with an appropriate level of flexibility for Member States to implement the Recommendation in a manner that best fits within the broader context of their respective civil justice culture," he argues. "Stay tuned for the next chapter."