REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the implementation of the Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union law (2013/396/EU)
Date: 2018-01-25
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: EU Member State, civil liability proceedings, collective interest, damages, indemnification, infringement of EU law, injunction, right of action

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 25.1.2018  COM(2018) 40 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the implementation of the Commission Recommendation of 11 June 2013 on common principles  for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union law (2013/396/EU)  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE 
COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 

on the implementation of the Commission Recommendation of 11 June 2013 on common 
principles  for injunctive and compensatory collective redress mechanisms in the Member 
States concerning violations of rights granted under Union law (2013/396/EU) 

1. 

INTRODUCTION 

The  Commission  has  been  addressing  collective  redress  issues  for  almost  20  years,  initially  in 
particular  in  the  context  of  consumer  protection  and  competition  policy1.  On  the  basis  of  a 
broader horizontal approach,  the Commission  adopted a Recommendation  on 11 June  2013 on 
common  principles  for  injunctive  and  compensatory  collective  redress  mechanisms  in  the 
Member  States  concerning  violations  of 
('the 
Recommendation')2. The Recommendation established principles which should be applicable in 
relation to violations of rights granted under Union law across all policy fields and in relation to 
both injunctive and compensatory relief. It follows from the Recommendation that all Member 
States  should  have  collective  redress  systems  at  national  level  that  follow  the  same  basic 
principles  throughout  the  Union,  taking  into  account  the  legal  traditions  of  the  Member  States 
and safeguarding against potential abuse. At the same time, in view of the risks associated with 
collective  litigation,  the  principles  set  out  by  the  Recommendation  also  aim  to  strike  an 
appropriate balance between the goal of ensuring sufficient access to justice and also the need of 
preventing abuses through appropriate safeguards.  

rights  granted  under  Union 

law 

The Commission committed to producing an assessment of the practical implementation of the 
Recommendation  four  years  after  its  publication.  This  report  carries  out  that  assessment  and 
focusses  on  the  developments  in  the  legislation  of  Member  States  since  the  adoption  of  the 
Recommendation.  Furthermore,  it  scrutinises  whether  these  developments  have  led  to  a  more 
widespread and coherent application of the individual principles set out in the Recommendation 
(section 2). In doing so, the report also examines the practical experience gathered with the rules 
on  collective  redress  available  at  the  national  level,  or  in  the  absence  of  such  rules,  how 
effectively situations of mass harm are addressed. Against that background, the report analyses 
to  what extent  the implementation  of the Recommendation  has  contributed to  achieve  its main 
aims of facilitating access to justice and preventing abusive litigation. Finally, the report contains 
concluding remarks on whether there is a need for further action concerning collective redress at 
European Union level (section 3). In that context, the report takes into account the main binding 
Union instrument touching upon collective redress, the Injunctions Directive3 requiring that the 
injunctions  procedure  for  the  protection  of  collective  consumers'  interests  is  available  in  all 

1 Adoption of Directive 98/27/EC on injunctions for the protection of consumers' interests; Green Paper on antitrust 
actions  (COM2005)672;  White  Paper  on  antitrust  actions  (COM(2008)165);  Green  Paper  on  consumer  collective 
redress (COM(2008)794).  
2 OJ L 201, 26.7.2013, p. 60–65 
3Directive  2009/22/EC  of  the  European  Parliament  and  of  the  Council  of  23  April  2009  on  injunctions  for  the 
protection of consumers' interests (O.J.E.U.  L 110/30 of  1.5.2009 ) codifying  Directive 98/27/EC  

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Member States, as well as the 2017 Commission Fitness Check of EU consumer and marketing 
law4 which evaluated the Injunctions Directive.  

The  assessment  is  carried  out  against  the  background  that  four  years  after  the  adoption  of  the 
Recommendation the risks of cross-border or even EU-wide infringements affecting a multitude 
of  citizens  or  businesses  have  further  increased,  particularly  but  not  exclusively  as  a  result  of 
greater  internet  use  and  online  shopping.  The  car  emissions  case,  in  which  many  consumers 
throughout the EU were affected by the sale of cars with misleading information about the level 
of  emissions,  illustrates  the  challenges  in  addressing  cross-border  mass  harm  situations.  These 
challenges are best demonstrated by the inequalities and differences across the EU leading to a 
situation in which in some few Member States the affected persons or entities were able to bring 
their  claims  to  justice  jointly  whereas  in  the  majority  of  Member  States  they  were  left  to 
insufficient devices or even helpless. 

National collective redress mechanisms are used in Member States where they are available. In 
the Member States where they do not formally exist there appears to be an increasing tendency 
of claimants attempting to seek collective redress through the use of different legal vehicles like 
the  joinder  of  cases  or  the  assignment  of  claims.  This  may  raise  issues  concerning  effective 
prevention  of  abusive  litigation,  since  safeguards  against  abuse  that  are  usually  present  in 
collective  proceedings,  e.g.  concerning  legal  standing  or  contingency  fees,  may  not  apply  in 
relation to such alternative avenues.  

This report is mainly based on the following sources of information: 

- the information delivered by Member States on the basis of a Commission questionnaire;   

- a study supporting the assessment of the implementation of the Recommendation covering all 
Member States5; 

- a call for evidence to which the Commission received 61 replies;  
- a study supporting the Fitness Check of EU consumer and marketing law6   

2. 

IMPLEMENTATION OF THE PRINCIPLES OF THE RECOMMENDATION  

Legislative  activities  affected  by  the  Recommendation  have  remained  somewhat  limited  in  the 
Member States. Seven Member States have enacted reforms of their laws on collective redress 
after  its  adoption,  and,  shown  in  the  detailed  assessment  in  this  report,  these  reforms  have  not 
always  followed  the  principles  of  the  Recommendation.  BE  and  LT  have  introduced 
compensatory collective redress to their legal systems for the very first time. FR and UK have 
significantly  changed  their  laws  to  improve  or  replace  some  mechanisms  that  were  available 
earlier  but  were  not  considered  sufficiently  effective.  Work  on  proposed  new  legislation  is 
advancing in NL and SI, and there is active discussion on possible future legislation in DE. It is 
worth noting that the majority of projects that have led to new legislation or are in the pipeline 
are  restricted  to  consumer  matters.  Moreover,  several  of  them  allow  the  use  of  the  "opt-out" 

4 COM report of the Fitness Check of EU consumer and marketing law, Brussels, 23.5.2017, SWD(2017) 209 final, 
available at  http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332 
5 To be published soon at http://ec.europa.eu/justice/civil/document/index_en.htm  
6 Available at http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332 

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principle7 to a considerable extent. As a result of this limited follow-up to the Recommendation, 
nine Member States currently still have no compensatory collective redress mechanisms in place. 

2.1. 

Horizontal issues 

2.1.1  Availability of collective redress 

The Recommendation stresses that all Member States should have collective redress mechanisms 
at national level,  both  injunctive and compensatory, available in  all cases where  rights  granted 
under Union law are, or have been, violated to the detriment of more than one person.8 

Collective  redress  in  the  form  of  injunctive  relief  exists  in  all  Member  States  with  regard  to 
consumer  cases  falling  within  the  scope  of  the  Injunctions  Directive9.  In  some  Member  States 
collective injunctions are available horizontally (BG, DK, LT, NL, SE) or in other specific areas, 
mainly competition (HU, LU, ES), environment (FR, HU, PT, SI, ES), employment (HU, ES) or 
antidiscrimination (HR, FR, ES).  

Compensatory  collective  redress  is  available  in  19  Member  States  (AT,  BE,  BG,  DE,  DK,  FI, 
FR, EL, HU, IT, LT, MT, NL, PL, PT, RO, ES, SE, UK) but in over half of them it is limited to 
specific  sectors,  mainly  to  consumer  claims10.  Other  sectors  in  which  compensatory  relief  is 
labour,  environment  or  anti-
typically  available  are  competition,  financial  services, 
discrimination.  The  differences  in  scope  between  the  Member  States  which  apply  a  sectoral 
approach  are  substantial:  for  example  in  Belgium  only  consumer  claims  can  be  pursued 
collectively  while  in  France  it  is  possible  with  regard  to  consumer,  competition,  health, 
discrimination and environmental claims. Only 6 Member States (BG, DK, LT, NL, PT and UK) 
have  taken  a  horizontal  approach  in  their  legislation,  allowing  for  collective  compensation 
proceedings across all areas11. In two of them (BG, UK) horizontal mechanisms exist in parallel 
to sector–specific procedures, which are used more often in practice. In one Member State (AT), 
despite  the  lack  of  legislation  on  compensatory  relief,  collective  actions  are  carried  out  on  the 
basis of the assignment of claims or the joinder of cases. These legal vehicles are also available 
in  other  Member  States,  but  the  results  of  the  public  consultation  show  that  they  are  used  in 
practice  for  collective  cases  only  in  DE  and  NL.  After  adoption  of  the  Recommendation  new 
legislation  on  compensatory  collective  redress  has  been  adopted  in  4  Member  States:  in  2  of 
them (BE, LT) for the first time ever, while in 2 others (FR, UK) important legislative changes 
have  taken  place.  In  SI  and  NL  new  bills  have  been  proposed  but  have  not  yet  been  adopted. 
Except for BE where the legislation concerns only consumer rights, these initiatives have a broad 

7 See point 2.3.1 of this Report 
8 Paragraph 2 of the Commission Recommendation of 11 June 2013 on common principles for injunctive and 
compensatory collective redress mechanisms in the Member States concerning violations of rights granted under 
Union law (2013/396/EU) (OJ L 201 p. 60 of 26.7.2013)  
9 The scope of the Injunctions Directive covers infringements of EU consumer laws as enumerated in its Annex I. 
10 With the exception of DE, where the only specific compensatory collective redress mechanisms does not apply to 
consumers, but to investors' claims only.  
11 However, in NL collective compensatory relief is currently available only in the form of declaratory judgments, or 
through special legal vehicles created for the purpose of collecting claims.   

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scope.  All  these  findings  demonstrate  that  in  spite  of  the  Recommendation  several  Member 
States have not introduced collective redress mechanisms in their national system.  As a result, a 
great divergence between the Member States persists in terms of the availability and the nature 
of collective redress mechanisms.  

The replies to the call for evidence show that collective redress, where available, is mainly used 
in  the  area  of  consumer  protection  and  related  areas  such  as  passenger  rights  or  financial 
services.  Another  area  where  several  cases  were  reported  is  competition  law,  especially  where 
alleged cartel victims claim compensation after the decision on an infringement by a competition 
authority  (follow-on  actions).  The  relative  absence  of  recourse  to  collective  redress  in  other 
fields is due not only to the fact that in many Member States compensatory or indeed injunctive 
relief is available only for consumers or in competition law; it also appears to be linked to other 
factors such as the complexity and length of the proceedings or restrictive rules on admissibility, 
often  related  to  legal  standing.    At  the  same  time,  in  AT,  CZ,  DE,  LU  and  IE  a  number  of 
situations  were  reported,  mostly  in  consumer  cases,  where  no  action  was  taken  due  to  the 
absence of compensatory relief schemes under national law.   

2.1.2  Standing in representative action 

The  Recommendation  calls  for  the  designation  of  entities  that  have  legal  standing  to  bring 
representative action where the parties directly affected by an infringement are represented by an 
organisation  which  alone  has  the  status  of  claimant  in  the  proceedings.  The  Recommendation 
sets out specific minimum criteria for such designation: the non-profit character of the entity, a 
direct relation between its objectives and the violated rights and a sufficient capacity to represent 
multiple claimants acting in their best interest. The Recommendation envisages the possibilities 
of a general designation entailing a general right of an entity to act or of an ad hoc certification 
only for a particular case but also refers to the empowerment of public authorities in addition or 
as an alternative12. 

Rules  on  standing  to  bring  representative  actions  are  procedural  guarantees  that  benefit  both 
claimants and defendants in collective actions. Standards ensuring the expertise of representative 
entities and their capacity to deal with complex cases ensure high-quality services for claimants 
and also protect defendants against frivolous action.  

Collective redress in the form of representative action is present in almost all Member States and 
dominates  in  environmental  and  consumer  injunctions,  its  availability  in  the  latter  area  being 
required under the Injunctions Directive13. Representative collective actions aimed at obtaining 
compensation  are  available  in  BE,  BG,  DK,  EL,  FI,  FR,  LT  IT,  HU,  PL,  RO,  ES,  SE.  In  2 
Member  States  (FI  and  PL)  only  public  authorities  are  entitled  to  bring  representative  actions, 

12 Paragraphs 4 to 7 of the Commission Recommendation  
13  Directive  2014/54/EU  on  measures  facilitating  the  exercise  of  rights  conferred  on  workers  in  the  context  of 
freedom  of  workers  (O.J.  L  128  p.8  of  30.4.2014)  under  Article  3(2)  requires  Member  States  to  ensure  that 
associations,  organisations  (including  social  partners)  or  other  entities    may  represent  Union  workers  in  judicial 
and/or administrative proceedings in order to ensure enforcement of rights. 

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while  in  some  others  non-governmental  entities  share  this  competence  with  public  authorities 
(HU, DK)14.  

All  Member  States  provide  for  some  conditions  with  regard  to  the  legal  standing  to  act  as 
representative  entities  both  in  injunctive  and  compensatory  collective  actions.  For  consumer 
injunctions, the Injunctions Directive stipulates that the injunction procedure may be commenced 
by "qualified entities" that are properly constituted according to the national law, which follow 
the  purpose  of  the  protection  of  collective  consumers'  interests.  The  Directive  leaves  other 
specific  criteria  to  be  possibly  complied  with  by  the  "qualified  entities"  to  the  discretion  of 
Member  States.  The  most  common  requirements  in  both  compensatory  and  injunctive  action 
applied by Member States concern the non-profit character of the entity and the relevance of the 
subject-matter of the case for the aims of the organisation. In line with the minimum nature of 
the  criteria  in  the  Recommendation,  some  Member  States  have  established  additional  specific 
conditions  in  relation  to  the  expertise,  experience  and  representative  nature  of  the  designated 
entities.    For  example,  in  IT  consumer  associations  have  to  demonstrate  3  years  of  continuous 
activity,  a  minimum  number  of  paying  members  and  presence  in  5  different  regions.  Similar 
conditions  apply  in  FR  where  representativeness  at  national  level,  one  year  of  existence, 
evidence  of  activity  in  the  area  of  consumer  protection  as  well  as  a  threshold  of  individual 
members  are  required15.  Some  replies  lodged  to  the  call  for  evidence  mentioned  the  national 
rules on legal standing, in particular in FR and IT, but also to some extent in DK and RO, as a 
problem affecting access to justice. In the UK, representative compensatory action in consumer 
matters  is  mainly  carried  out  by  public  authorities  although  it  is  possible  to  designate  other 
entities for whom it is "just and reasonable" to act as a representative of the class; currently, one 
designated non-public body may act in consumer related cases16. In DK an association, private 
institution  or  other  organisation  may  act  as  representative  where  the  action  falls  within  the 
framework of the organisation’s objectives.  

Overall  it  can  be  concluded  that  the  principle  is  generally  complied  with,  albeit  with  some 
variations  in  different  Member  States.    These  variations  are  of  some  significance  since  more 
stringent rules for representative entities could potentially lead to a limitation of the right to seek 
collective redress and thereby of access to courts. 

2.1.3  Admissibility 

The Recommendation urges Member States to ensure that admissibility of the claims is verified 
at  the  earliest  possible  stage  of  litigation  and  that  cases  which  do  not  meet  the  conditions  for 
collective action and manifestly unfounded cases are not continued17. 

14 In addition, in DK in private group actions the representative may be appointed from among the class members. 
15 Interestingly, in spite of these demanding conditions 18 organisations are currently registered in Italy and 15 in 
France.  However,  only  a  rather  limited  number  of  those  entities  (6  in  FR,  3  in  IT  during  the  last  4  years)  have 
actually lodged representative actions. 
16  In  addition,  in  competition  cases  in  the  UK  a  class  member  can  also  represent  the  class  which  makes  this 
procedure a group action rather than representative action within the meaning of the Recommendation.   
17 Paragraphs 8 and 9 of the Commission Recommendation 

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The  principle  on  early  dismissal  of  claims  that  are  manifestly  unfounded  or  do  not  meet 
admissibility  criteria  for  collective  action  serves  the  efficiency  of  justice  and  protects  against 
frivolous litigation. The Recommendation does not itself establish specific admissibility criteria, 
nor does it define the term "manifestly unfounded claim". However, in some Member States the 
general rules of civil procedure which allow for early dismissal of manifestly unfounded claims 
are  equally  applicable  in  collective  actions.  Some  admissibility  criteria  could  also  be  deducted 
from  other  principles  of  the  Recommendation,  e.g.  concerning  the  standing  in  representative 
actions. Indeed, for injunctive relief the main admissibility criterion appears to be the standing of 
the entity. For consumer cases the Injunctions Directive does not require a specific admissibility 
check or specific criteria apart from those for standing. 

More  specific  criteria,  which  must  be  met  and  are  typically  examined  by  the  court  at  an  early 
stage  of  the  proceedings,  are  laid  down  in  the  majority  of  Member  States  for  compensatory 
collective  redress.    Only  ES  and  SE  do  not  have  specific  rules  on  admissibility  of  collective 
redress, and therefore apply general civil procedural rules. The examination of the admissibility 
of collective action in some Member States will result in a specific decision on this matter (BE, 
FR,  PL,  UK)  while  in  others  procedural  decisions  are issued  only  if  the  action  is  dismissed  as 
inadmissible.  Some  Member  States  require  justification  that  collective  action  is  more  efficient 
than  individual  litigation  (BE,  DK,  FI,  IT,  LT)18  while  others  examine  the  capacity  of  a 
representative entity to protect the interest of the affected persons (FI, IT, NL, RO, UK)19. The 
homogeneous nature (commonality) of the joined individual claims is a condition that applies in 
all Member States.  

The replies to the call for evidence also show the reverse side of the admissibility requirement. 
While  none  of  the  respondents  criticised  the  introduction  of  this  requirement  per  se,  several 
replies  cautioned  against  the  use  of  this  principle  as  it  may  make  the  whole  procedure  more 
lengthy  and  cumbersome,  and  thereby  restrict  access  to  this  procedure  as  a  whole.    This  was 
highlighted in BE, NL, PL and UK20. 

In general, Member States verify admissibility of claims. They have procedural mechanisms to 
do  so  which  are  established  on  the  basis  of  general  and  specific  rules  in  place  to  dismiss 
manifestly  unfounded  collective  compensation  claims.  It  is  worth  noting  that  recent  legislation 
on  collective  action  enacted  in  certain  Member  States  subsequent  to  the  Recommendation 
addresses admissibility in a manner consistent with the Recommendation (BE, LT, SI). On the 

18 For example in Belgium, the court has to take into account inter alia the potential size of the group of affected 
consumers, the degree of complexity of the action for collective redress, and the implications for efficient consumer 
protection as well as the smooth functioning of justice. 
19 For example in Italy, apart from the question of the standing of the entity the court has to examine if there is a 
conflict of interest.  
20 In BE and NL the rules on admissibility were named as being problematic, while the length of that procedure was 
expressly mentioned for BE and PL. In Demark the rules on admissibility were named as problematic in the context 
of restrictive rules on legal standing. In PL the requirement that the amounts claimed must be identical at least in 
several sub-groups may deter potential group members from participating in the action or lead them to reduce their 
claims to be eligible. Similarly, in the UK the strict interpretation in competition law cases of the requirement that 
claims should raise the same, similar or related issues of fact or law, as an admissibility requirement, was considered 
by one respondent to be problematic in the context of gaining access to justice.  

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other hand, existing divergences in conditions on admissibility may still result in unequal access 
to  justice  in  compensatory  collective  actions  as  overly  restrictive  rules  on  admissibility  could 
limit access to this procedure. It should be further noted that, as this is a preliminary phase of the 
action,  expeditious  decisions  on  admissibility  are  important  for  the  legal  certainty  of  all  the 
parties involved.  

2.1.4  Information on collective redress 

The  Recommendation  invites  Member  States  to  ensure  that  the  claimant  party  is  able  to 
disseminate  information  on  planned  and  ongoing  collective  action.  Bearing  in  mind  that 
information  on  collective  action  may  have  side  effects,  in  particular  on  the  defendant,  even 
before the action is brought to the court, the Recommendation points out that the arrangements 
for  provision  of  information  should  be  adequate  to  circumstances  of  the  case  and  take  into 
account the rights of the parties including the freedom of expression, the right to information and 
the right to protection of the reputation of the company21. 

Persons  who  have  claims  that  could  be  pursued  in  collective  actions  should  be  able  to  receive 
information that enables them to make an informed choice on their participation. As advocated 
by the Recommendation, this is of particular importance in the "opt-in" type of collective redress 
mechanisms in order to ensure that those who may be interested in joining are not missing their 
opportunity  due  to  lack  of  information.  In  the  case  of  representative  action,  the  provision  of 
information  should be not  only the right  of the representative entity but  also its duty22. On the 
other  hand,  spreading  information  on  (intended)  collective  action  may  potentially  have  an 
adverse  effect  on  the  economic  situation  of  the  defendant  whose  liability  has  not  yet  been 
established.  These  two  interests  have  to  be  properly  balanced.  Although  the  Recommendation 
expressly  addresses  the  dissemination  of  information  about  the  intention  to  bring  collective 
action, there are no Member States that regulate this issue at the preparatory stage before court 
action  is  brought.  Once  a  case  is  declared  admissible  by  the  court,  in  particular  where 
compensation is claimed, in many Member States (BE, DK, EE, FI, FR, HU, LT, NL, PL SE) 
courts are entrusted with the determination of modalities of spreading information, including the 
publication  method  and  the  period  during  which  information  should  be  accessible.  Member 
States  usually  leave  substantial  discretion  to  the  courts  do  so,  referring  in  their  laws  to  the 
circumstances  of  the  case  to  be  taken  into  account  but  not  mentioning  the  specific  factors  laid 
down in the Recommendation. However, 5 Member States (BG, IT MT, PT, UK) do not regulate 
provision  of  information  in  collective  damages  actions  at  all.  There  is  even  less  regulation  on 
provision of information in relation to injunctive as compared to compensatory action.  

21 Paragraphs 10 to 12 of the Commission Recommendation  
22 As explained in point 3.5 of the  Communication from the Commission to the European Parliament, the Council, 
the European Economic and Social Committee and the Committee of the Regions "Towards a European Horizontal 
Framework for Collective Redress" ( COM/2013/0401 final). 
. 

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The call for evidence did not reveal significant problems with the provision of information. Only 
one  situation  from  IT  was  reported,  where  it  was  cited  that  the  requirement  of  advertising  the 
case in print media created a significant financial burden for the claimant. In addition, one reply 
also mentioned the lack of possibility in PL to advertise a collective redress action on the internet 
as being problematic.   
Overall,  it  has  to  be  concluded  that  the  principle  concerning  provision  of  information  on 
collective action is  not appropriately reflected in the laws  of Member States particularly at the 
pre-litigation stage and for injunctions. 

2.1.5  Loser pays 

The  party  that  loses  a  collective  redress  action  should  reimburse  necessary  legal  costs  to  the 
winning party, subject to the conditions of the applicable national law23. 

The "loser pays" principle constitutes one of the basic procedural guarantees for both parties of 
collective  actions.  On  one  hand,  the  risk  of  the  reimbursement  of  costs  to  the  defendant  if  the 
claim is dismissed deters potential claimants from bringing frivolous actions. On the other hand, 
the  fact  that  a  losing  defendant  will  have  to  cover  necessary  costs  encourages  the  pursuit  of 
justified  collective  claims.  The  Recommendation  leaves  flexibility  to  Member  States  to  apply 
national rules on reimbursement of costs.  
All Member States that have collective redress mechanisms, with the exception of LU24, follow 
the  "loser  pays"  principle  in  their  civil  procedural  laws.  The  overwhelming  majority  of  the 
Member States  apply  exactly the same rules  to collective actions as they do to individual  civil 
proceedings;  where  modalities  applicable  to  collective  redress  exist,  they  concern  mainly  an 
exemption  from  court  fees  for  representative  entities  and  public  authorities  in  consumer  cases 
(HR, HU, MT, PL, RO)25. One Member State (PT) provides for the reimbursement of only 50% 
of  the  defendant's  costs  in  case  of  dismissal  of  the  claim  both  in  group  actions  and  in 
representative actions, thus limiting the risk for those bringing collective actions. 

It  can  be  concluded  that  Member  States  largely  follow  the  principle  set  out  in  the 
Recommendation26. However, it has to be borne in mind that the rules concerning costs of civil 

23 Paragraph 13 of the Commission Recommendation  
24 In LU the successful party may be awarded a procedural indemnity the amount of which is decided by a judge but 
this requires a subsequent application to the court and thus additional effort.   
25  Or  the  absence  of  fees  in  consumer  injunctive  proceedings  before  administrative  authorities  (FI,  LV).  The 
Injunctions  Directive  does  not  regulate  the  issue  of  costs  related  to  the  injunction  procedure.  Nevertheless,  the 
financial risk related to injunctions has been identified as the most crucial obstacle to the effective use of injunctions 
for qualified entities. According to the study supporting the Fitness check the most effective measure would be to 
include a rule in the Injunctions Directive according to which, in objectively justified cases, qualified entities would 
not have to pay court or administrative fees.  
26  Several  respondents  to  the  call  for  evidence  from  BE,  NL,  RO  and  FI  identified  this  principle  as  a  potential 
problem  as  the  potential  reimbursement  of  costs  is  an  important  risk  factor  to  be  taken  into  account  when 
introducing a claim. This is more so where no compensatory collective redress is available, such as in CZ, and such 
claims can be lodged only in individual cases. 

8 

 
 
       
 
 
 
 
                                                            
 
procedure and the manner in which they are reimbursed (as well as the amounts of those costs), 
vary substantially across Member States. Their application may lead to substantial divergences in 
the actual reimbursement of costs of the winning party in very similar proceedings, depending on 
the  forum,  e.g.  as  a  result  of  the  definition  of  the  reimbursable  costs27.  Therefore,  the  aim  of 
preventing abusive litigation through the loser pays principle, in reality, is not equally achieved 
in all Member States. 

2.1.6  Funding of collective actions 

The Recommendation proposes a general disclosure rule according to which the claimant party is 
required  to  declare  the  origin  of  the  funds  used  to  support  legal  action.  In  addition,  the  court 
should be in a position to stay proceedings where there is conflict of interest between the third 
party providing finance and the claimant, where the third party has insufficient resources to meet 
its financial commitments or where the claimant has insufficient resources to meet adverse costs 
in case of the failure of the action. While the Recommendation does not urge the prohibition of 
private  third  party  financing  per  se,  it  should  be  prohibited  to  seek  to  influence  procedural 
decisions,  to  provide  financing  for  action  against  a  competitor  or  an  affiliate  and  to  charge 
excessive  interest  rates.  Finally,  specifically  for  cases  of  compensatory  collective  redress,  it 
should  be  prohibited  to  make  the  remuneration  given  to  or  the  interest  charged  by  the  fund 
provider dependant on the amounts recovered, unless such arrangement is regulated by a public 
authority28. 

The rules in the Recommendation with regard to third party funding aim to ensure that the terms 
of financing do not create an incentive for abusive litigation or conflicts of interest. 
On  this  point,  the  Recommendation  has  not  been  implemented  in  any  of  the  Member  States. 
None  of  them  have  regulated  third  party  financing,  let  alone  in  accordance  with  the 
Recommendation. EL and IE generally prohibit third party funding. However, the new pending 
legislation in SI is the exception to this general situation, as according to that legislation, private 
third party funding is regulated in accordance with the principles set out in the Recommendation.  

This  general  lack  of  implementation  means  that  unregulated  and  uncontrolled  third  party 
financing can proliferate without legal constraints, creating potential incentives for litigation in 
certain Member States. There is evidence that at least in three Member States, namely AT, NL 
and the UK, private third party financing is available and in two (AT and NL) is resorted to in 
practice without any regulation (in the UK, general limitations based on common law2429 apply 
and some form of self-regulation by the industry was introduced). 
The  evidence  collected  in  the  framework  of  the  public  consultation  confirms  the  existence  of 
third party funding: two cases were lodged by alleged cartel victims where third-party financing 
was  used  were  reported  in  the  UK,  while  one  such  case  was  reported  in  NL  and  one  in  DE. 

27 For example, if lawyers' fees are reimbursed at the level of statutory fees which may be exceeded in practice. 
28 Paragraphs 14 to 16 and 32 of the Commission Recommendation 
29 Under common law, anyone who improperly funds the litigation of another may be found liable for all the 
(adverse) costs of that litigation if the case is lost. 

9 

 
 
 
 
 
 
                                                            
However, in the latter cases the use of third-party funding was linked to the excessive costs of 
the collective redress  proceedings (in both  cases claims were assigned to a special vehicle). In 
addition,  one  alleged  mass  harm  situation  has  been  reported  in  DE  where,  in  pending  cases 
between both consumers and shareholders on one hand and a major automotive company on the 
other hand, third-party funding has been provided to a considerable extent.  

Interviewed  practitioners  involved  in  collective  actions  reported  few  situations  of  (at  least) 
potential conflict of interest: e.g. the use of non-distributed damages for re-payment to the fund 
provider,  organisation  of  the  whole action  by the  fund  provider,  institutional relations  between 
the law firm representing claimants and the fund provider.  

These  examples  show  that  private  third  party  financing  is  increasingly  being  used  in  several 
Member States. In addition, it is clear that this key aspect of collective redress has an important 
cross-border dimension as funds to initiate litigation can be easily provided across borders. This 
means that while regulating private third party funding in several Member States would certainly 
be  a  step  in  the  right  direction  in  line  with  the  Recommendation,  there  will  always  be  a 
possibility  for  fund  providers  based  in  one  Member  State  to  avoid  stringent  national  rules  by 
seeking  to  fund  collective  actions  in  another  EU  Member  State,  where  collective  redress 
mechanisms are available and private third party funding remains unregulated. 
It  can  be  concluded  that  this  is  one  of  the  points  where  the  Recommendation  had  almost  no 
impact  in  the  laws  of  the  Member  States  and  where  it  would  be  important  to  analyse  how  the 
objectives of this principle could be best achieved in practice. 

2.1.7  Cross-border cases 

The  Recommendation  requires  Member  States  to  not  prevent,  through  national  rules  on 
admissibility or  standing, participation of  foreign groups of claimants  or  foreign  representative 
entities in a single collective action before their courts. Designated representative entities should 
be able to seize the courts with jurisdiction on their claims also in other Member States30.    

Economic  activities  often  spread  across  borders  and  may  give  rise  to  harm  for  persons  from 
several Member States resulting from the same or similar activities. Such persons should not be 
deprived  of  the  advantage  of  joining  forces  to  enforce  their  rights.  A  designated  entity  in  one 
Member State should be able to bring an action in any other Member State that has jurisdiction 
to rule on the claim. The Recommendation thus reaffirms the principle of non-discrimination in 
the context of civil proceedings and advocates the mutual recognition of the status of designated 
entities. 

There  are  no  Member  States  that  have  general  obstacles  to  the  participation  of  any  natural  or 
legal  person  from  other  Member  States  in  group  actions  before  their  courts.  Participation  in  a 
group  of  claimants  is  not  restricted  to  those  domiciled  or  established  in  the  Member  State  in 
which collective action is undertaken.  

30 Paragraphs 17 and 18 of the Commission Recommendation 

10 

 
 
 
 
 
 
 
                                                            
The call for evidence revealed that the car emissions case, in which many consumers throughout 
the  EU  were  affected  by  the  sale  of  cars  with  misleading  information  about  the  level  of 
emissions, triggered the introduction of collective redress proceedings in four different Member 
States. These pending cases can lead to different results depending on the Member State where 
judgments will be rendered. This situation could incentivise forum shopping, where, in a case of 
a clear cross-border nature, potential claimants will address their claim where the possibility for 
success  seems  higher.  In  addition,  other  risks  were  identified,  such  as  the  risk  of  double 
compensation or, indeed, of conflicting decisions31. 

With regard to the recognition of the representative entities designated in other Member States 
the  situation  is  more  divergent.  There  are  no  Member  States  that  provide  expressly  for  the 
general  recognition  of  representative  entities  designated  by  other  Member  States.  The  only 
exception  concerns  the  Injunctions  Directive  which  requires  Member  States  to  ensure  that 
qualified  entities  may  apply  for  injunctions  to  the  courts  or  administrative  authorities  in  other 
Member  States  where  the  interests  protected  by  that  qualified  entity  are  affected  by  an 
infringement originating in that Member State32. In  all other cases, representative entities must 
meet  national  conditions  of  standing,  which  may  be  impossible  for  foreign  designated  entities, 
such  as  the  recognition  by  a  specific  national  public  authority  (e.g.  BE)  or  the  presence  and 
activity  on  the  territory  of  the  Member  State  concerned  (e.g.  FR,  BG).  Therefore,  the 
Recommendation  regarding  recognition  is  not  followed  by  the  Member  States  in  relation  to 
compensatory collective action and injunctive collective action outside the scope of Injunctions 
Directive.  

2.2  Injunctions 

2.2.1  Expediency of injunction proceedings 

The Recommendation advocates that claims for injunctive orders should be treated expediently, 
if appropriate through summary proceedings, in order to prevent any further harm33. 

All Member States provide in their civil procedural laws for a possibility of requesting an order 
that  would compel  a  defendant  to  refrain  from  illegal  practices.  The  possibility  of  claiming  an 
injunction through collective action exists in all Member States within the scope of Injunctions 
Directive, i.e. for the infringements of EU consumer law as listed in Annex I to the Directive, as 

31 Finally, two respondents from AT expressed concern that the protective consumer jurisdiction rule of the Brussels 
I Regulation (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 
on  jurisdiction  and  the  recognition  and  enforcement  of  judgments  in  civil  and  commercial  matters,  OJ  L  351, 
20.12.2012, p. 1) do not apply to representative entities. 
32 See Article 4 of the Injunctions Directive establishing a system for notification of qualified entities to be included 
in a list published by the European Commission in the Official Journal of the European Union. However, according 
to the Fitness Check report qualified entities almost never seek injunctions in other Member States, in particular due 
to  the  related  costs  and  because  in  most  cases  they  can  seek  injunctions  in  their  jurisdiction  also  for  the 
infringements with cross-border implications. 
33 Paragraph 19 of the Commission Recommendation 

11 

 
 
 
 
 
 
                                                            
transposed into national legal orders, which harm collective consumer interests. Some Member 
States provide for collective injunctions in other specified fields.34  

As  regards  the  length  of  the  injunction  procedure,  under  the  Injunction  Directive  collective 
injunction  actions  in  the  consumer  area  must  be  processed  ‘with  all  due  expediency,  where 
appropriate  by  way  of  summary  procedure’35.  Irrespective  of  the  area  of  law  in  question,  all 
Member  States  provide  for  a  possibility  to  apply  for  provisional  measures  under  their  general 
civil procedural rules. Such applications are by definition dealt with rather quickly as their very 
purpose is to prevent the occurrence of further potentially irreversible damage until a decision on 
the merits is issued. In the consumer cases the Fitness Check reveals that there is a clear need for 
making  injunctions  more  effective  and  the  length  of  the  procedure  is  reported  as  an  issue. 
However,  the  practical  effectiveness  of  that  tool  may  be  compromised  where  collective 
injunction procedures are not available.  

2.2.2  Effective enforcement of injunctions 

The Recommendation urges Member States to ensure effective enforcement of injunctive orders 
through appropriate sanctions, including a fine for each day of non-compliance36. 

The enforcement of injunctions is generally carried out through the same measures irrespective 
of whether the injunctive order was issued in individual or collective proceedings.  

The  Injunctions  Directive  requires  specific  enforcement  measures  for  non-compliance  with  the 
injunctions order in consumer matters in the form of payments of a fixed amount for each day of 
non-compliance or any other amounts to the public purse or other beneficiaries, but only ‘in so 
far  as  the  legal  system  of  the  Member  State  concerned  so  permits’37.  All  Member  States  have 
such penalties for non-compliance in place, including those in which non-judicial authorities are 
competent  for  injunctions.  However,  according  to  the  Study  supporting  the  Fitness  Check  it  is 
doubtful  in  some  cases  whether  the  penalties  are  sufficiently  deterrent  in  nature  to  discourage 
continued infringements38.  

As a complementary enforcement method, the Injunctions Directive creates a possibility to order 
the publication of injunctions orders and corrective statements, albeit only ‘where appropriate’. 
Such  measures  can  be  a  very  effective  remedy  in  terms  of  informing  consumers  of  the 
infringement and as a deterrent to traders who fear damage to their reputation. Information of the 
general public has been complemented in some Member States by more targeted information of 
affected consumers so that they can consider follow-on action for damages. 

34 See point 2.1.1 of this Report 
35 Article 2(1)(a). 
36 Paragraph 20 of the Commission Recommendation 
37 Article 2(1)(c). 
38  In  addition  in  some  Member  States  these  sanctions  are  not  determined  in  the  injunction  order  and  require 
additional legal action.  Against that background the Fitness Check study recommends clear legal rules at EU level 
on sanctions for non-compliance with the injunctions order 

12 

 
 
 
 
 
                                                            
Outside the scope of the Injunctions Directive, fines are available in all Member States to prompt 
the losing defendant to quickly implement an injunctions order39. In addition, in some Member 
States (CY, IE, LT, MT, UK) disobedience of a court order is a criminal offence. 

2.3  Compensation 

2.3.1  Opt-in 

The  Recommendation  urges  Member  States  to  introduce  in  their  national  collective  redress 
schemes the principle of "opt-in", whereby the natural or legal persons joining the action should 
do  so  based  on  their  express  consent  only.  They  should  be  able  to  join  or  withdraw  from  the 
action until judgment is given or the case is settled. Exceptions to this principle are admissible 
but should be justified by reasons of sound administration of justice40. 

The background to  the adoption  of this principle is  the need to  avoid abusive litigation, where 
parties are involved in litigation without their expressed consent. The application of the opposite 
principle, the so-called "opt-out", where parties belonging to a certain class/group automatically 
take  part  in  the  litigation/out  of  court  settlement  unless  they  expressively  withdraw,  could  be 
considered as problematic in certain circumstances, in particular in cross-border cases. This has 
to  do  with  the  fact  that  parties  domiciled  in  other  countries  may  not  know  about  ongoing 
litigation and  thus  may  find  themselves  in  a  situation  where  they  participate in  a  pending  case 
without their knowledge. On the other hand, the "opt-out" principle could be considered a more 
effective  approach  and  may  be  justified  where  the  protection  of  collective  interests  appears 
necessary  but  the  explicit  consent  of  affected  persons  is  difficult  to  obtain,  e.g.  in  domestic 
consumer  cases  with  low  individual  damages  not  incentivising  the  exercise  of  an  "opt-in"  but 
with high accumulated damages41.  

There  is  a  diverse  application  of  this  principle  in  the  Member  States  where  compensatory 
collective redress mechanisms are available. There are 13 Member States (AT, FI, FR, DE, EL, 
HU, IT, LT, MT, PL, RO, ES, SE) that exclusively apply the "opt-in" principle in their national 
collective redress schemes. There are 4 Member States (BE, BG, DK, UK) that apply both the 
"opt-in" and the "opt-out" principle, depending on the type of action or the specifics of the case, 
while 2 Member States (NL and PT) apply only the "opt-out" principle.  

39 Except for one respondent from RO who emphasised that the fine imposed by the National Consumer Authority 
for  non-compliance  with  a  judgment  is  extremely  low  and  has  no  deterring  effect,  no  special  issues  with  this 
principle were reported in the call for evidence. 
40 Paragraphs 21 to 24 of the Commission Recommendation 
41 Three replies to the call for evidence expressed support for an "opt-out" system, for instance in specific situations 
where  it  is  difficult  to  identify  the  persons  affected  such  as  where  alleged  human  rights  violations  are 
committed in third countries, in particular related to working conditions, and action can be taken against defendants 
with  a  seat  in  a  Member  State.  However,  one  respondent  from  the  UK  had  doubts  about  the  effectiveness  of  the 
"opt-out" system, as experience shows that it involves high costs and administrative burden in order to identify the 
individuals that fall within a certain class. Finally, a respondent from NL expressed support for a system that would 
differentiate  between  an  "opt-in"  for  collective  court  action  and  "opt-out"  for  collective  settlement,  while  a 
respondent from BE specifically favoured the "opt-in" system. 

13 

 
 
 
 
 
 
                                                            
 
Among the Member States who have adopted or amended their legislation after the adoption of 
the Recommendation, LT and FR have introduced opt-in systems, while BE and the UK have in 
the newly introduced schemes (e.g. competition cases in the UK) a hybrid system of either opt-in 
or opt-out, left at the discretion of the court.  

In  BE  the  application  of  either  of  these  principles  is  assessed  on  a  case-by-case  basis  with  the 
aim to see how best to protect the interests of the consumers. However, where the claimants are 
foreign the Belgian system prescribes the "opt-in" principle. The same trend can be seen in the 
new  UK  system  in  competition  law  cases  where  the  "opt-out"  order  made  by  the  court  will 
preclude further litigation only for claimants domiciled in the UK.  

The new legislative proposal pending in  NL continues the status-quo and applies the "opt-out" 
principle.  The  proposal  in  SI  introduces  the  "opt-in"  principle,  with  "opt-out"  being  made 
available as an exception where reasons of sound administration of justice justifies it (e.g. low 
value of the individual claims).       

It can be concluded that while the vast majority of Member States apply the opt-in principle in 
all or in specific types of collective redress actions, the Recommendation has had a limited effect 
on the laws of the Member States. At the same time, the new legislation in BE and the UK shows 
that even where the opt-out principle is applied there appears to be the perception of a need to 
distinguish  between  purely  domestic  and  cross-border  cases  and  to  rely  more  on  the  "opt-in" 
principle in cross-border contexts. 

2.3.2  Collective out-of-court dispute resolution  

The  Recommendation  urges  Member  States  to  encourage  parties  to  settle  their  disputes 
consensually or out-of-court, before or during the litigation and to make collective out-of-court 
dispute  resolution  mechanisms  available  alongside  or  as  a  voluntary  element  of  judicial 
collective  redress.  Limitation  periods  applicable  to  the  claims  should  be  suspended  during  the 
alternative dispute resolution procedure. The binding outcome of a collective settlement should 
be controlled by a court42. 

Collective out-of-court dispute resolution schemes should take into account the requirements of 
Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain 
aspects of mediation in civil and commercial matters43 but should also be specifically tailored for 
collective actions44.  

Introducing such schemes in collective redress mechanisms is an efficient way of dealing with 
mass harm situations, with potential positive effects on the length of the proceedings and on the 
costs for parties and judicial systems. 

42 Paragraphs 25 to 28 of the Commission Recommendation 
43 OJ L 136, 24.5.2008, p. 3 
44 Recital 27 of Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative 
dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC 
clarifies  that  that  Directive  does  not  regulate  collective  ADR  in  the  consumer  area  but  is  without  prejudice  to 
Member States maintaining or introducing such ADR procedures.  

14 

 
 
 
 
                                                            
Among  the  19  Member  States  that  have  compensatory  relief  schemes,  11  have  introduced 
specific provisions on collective out-of-court dispute resolution mechanisms (BE, BG, DK, FR, 
DE, IT, LT, NL, PL, PT, UK). This list includes the three Member States that have adopted new 
legislation after the adoption of the Recommendation (BE, FR and LT) as well as the UK which 
introduced a specific provision on out-of-court dispute resolution in the competition mechanism. 
In  its  legislative  proposal,  SI  is  largely  following  the  Recommendation.  The  remaining  8 
Member  States  that  have  collective  redress  schemes  apply  general  provisions  on  out-of-court 
dispute  resolution  to  such  situations,  for  instance  as  implemented  in  the  national  legislation 
pursuant to Directive 2008/52/EC.  

While the availability of ADR schemes under national law is positive per se, provisions designed 
for  collective  actions  could  better  take  into  account  certain  specificities  of  such  collective 
actions.  For  instance,  the  Recommendation  provides  that  the  use  of  collective  out-of-court 
dispute  resolution  should  depend  on  the  express  consent  of  the  parties  involved  whereas  in 
relation to individual claims it may be mandatory45. In addition, an important element to ensure 
that  the  rights  of  the  parties  involved  are  protected  is  the  subsequent  control  of  settlements  by 
courts. 

The  call  for  evidence  revealed  an  important  trend  in  relation  to  collective  out-of-court  dispute 
resolution,  namely  the  conclusion  of  cases  consensually  through  direct  settlement  negotiation, 
without the involvement of a third party46. 

It can be thus concluded that, while all the Member States that recently changed, introduced or 
are  about  to  introduce  new  legislation  have  largely  followed  the  Recommendation,  access  to 
collective  out-of-court dispute resolution  schemes  adjusted  to  the  specific  context  of  collective 
redress is not granted in a significant number of Member States. 

2.3.3  Lawyers' fees 

The  Recommendation  provides  that  the  lawyers'  remuneration  and  the  method  of  calculation 
should  not  create  unnecessary  incentives  to  litigation  that  is  not  in  the  interest  of  any  of  the 
parties. In particular, contingency fees, which risk creating such incentives, should be prohibited; 
where they are exceptionally allowed they should be appropriately regulated in collective redress 
cases taking into account the right to full compensation of the members of the claimant party47.   

45 Point 26 of the Recommendation in comparison with Article 1 of Directive 2013/11/EU which stipulates that that 
Directive is without prejudice to national legislation making participation in ADR procedures mandatory, provided 
that such legislation does not prevent parties from exercising their right of access to the judicial system.   
46  For  instance  several  replies  mention  the  NL  experience  with  legislation  on  collective  settlements  reviewed  by 
courts  (WCAM),  where  direct  settlement  negotiations  and  court  proceedings  are  pending  in  parallel.  One  reply 
mentions that out of the ten consumer collective redress cases lodged in FR since the introduction of legislation in 
October 2014, two were settled (with the subsequent validation by a court). A similar experience was mentioned in 
SE,  FI  and  BE,  where  a  court  validated  recently  an  agreement  reached  in  a  consumer  case  related  to  passenger 
rights. 
47 Paragraphs 29 and 30 of the Commission Recommendation 

15 

 
 
 
 
                                                            
Generally speaking lawyers' fees are not regulated in Member States depending on the types of 
cases, such as specifically for collective redress actions. 

There are 9 Member States (BG, CY, CZ, DE, EL, PL, SI, ES, UK) that allow for some form of 
contingency  fee,  with  the  amount  to  be  paid  to  the  lawyer  ranging  from  15%  under  SI  draft 
legislation to 50% of the value of the award in the UK. In all these Member States, except for the 
UK,  there  appear  to  be  specific  provisions  on  the  operation  of  such  remuneration  in  collective 
redress actions. A notable exception to this rule is found in the UK's competition scheme, where 
contingency  fee  agreements  are  not  available  in  opt-out  competition  court  proceedings.  In 
addition, the legislative proposal in SI specifically reiterates the availability of contingency fees 
in collective redress cases. 

It  should  be  noted  that  not  all  forms  of  contingency  fees  can  be  regarded  as  encouraging 
litigation  against  the  interest  of  the  parties  involved.  For  instance,  in  DE  contingency  fees  are 
allowed  only  in  exceptional  circumstances  where  the  alleged  victim  lacks  financial  means  and 
can only pursue his claim with a contingency fee arrangement. At the same time, a contingency 
fee of up to 50% of the award as in the UK or up to 33% in ES appears more likely to incentivise 
unnecessary litigation.  

Other Member States allow for performance fees, either in the form of a success fee, or, on the 
contrary, a reduction in the remuneration in case certain goals are not achieved (AT, BE, FR, IT, 
LT, LU, PL, SE). The main difference between the two types of remuneration is that in the case 
of performance fees, the lawyer gets paid even if he loses the case but will be paid more, the so-
called  success  fee,  if  he  wins  whereas  in  the  case  of  contingency  fees  the  lawyer  does  not  get 
paid at all unless he wins the case. While performance fees are not an incentive to unnecessary 
litigation  per  se  and  neither  does  the  Recommendation  call  for  their  prohibition,  they  can,  in 
certain  circumstances,  produce  similar  effects.  They  could  encourage  unnecessary  claims  for 
unrealistic amounts particularly where they are calculated as a percentage of the award. On the 
other hand, a flat rate performance fee appears less likely to create an incentive for aggressive 
litigation practices. 

In the framework of the call for evidence two respondents from NL and FI mentioned lawyers' 
fees  as  problematic  -  not  necessarily  where  based  on  contingency  fee,  but  as  a  factor  which 
contributes  to  the  high  costs  of  collective  redress  proceedings,  especially  when  taken  together 
with the loser pays principle. In addition, a respondent from the UK submitted the example of a 
case  where  the  national  court  held  that  the  collective  claim,  which  was  driven  by  a  law  firm 
working  on  contingency  fee,  was  an  abuse  of  process.  The  same  respondent  highlighted  the 
potential high revenue for lawyers or for third-part funders as a problem in particular in "opt-out" 
systems, where it is difficult to provide compensation to the harmed individuals because of the 
high costs involved to determine whether such individuals fall within a certain class. 

It  can  be  concluded  that  the  Recommendation  has  had  a  very  limited  impact  on  the  system  of 
lawyers'  fees  in  the  Member  States.  However  the  Member  States  that  have  adopted  new 
legislation following the adoption of the Recommendation have not introduced contingency fees 
except SI which provides for such fees in the pending legislative proposal on collective redress. 
The  system  of  lawyers'  fees  seems  embedded  in  the  national  procedural  law  traditions  of  the 
Member  States  and  there  is  no evidence that  any  change  was  contemplated to  such  systems  to 
address the specific concerns of collective redress actions. 

16 

 
 
 
2.3.4  Punitive damages 

The  Recommendation  calls  for  a  prohibition  of  punitive  damages  as  well  as  of  other  awards 
exceeding the compensation that would have been obtained in individual litigation48. 

The concept of overcompensation by punitive damages is generally alien to the majority of the 
Member  States'  legal  systems.  The  call  for  evidence  did  not  reveal  any  case  where  punitive 
damages  were  requested or  granted in  collective redress  actions. This  means that  there was no 
need for special rules to apply in collective redress actions. 

Only three Member States admit some form of punitive damages, albeit in a very limited form. 
EL for example applies some form of damages akin to punitive damages in the form of monetary 
compensation  for  moral  damages  in  representative  consumer  claims.  In  IE  the  recovery  of 
punitive damages is generally rare49 and is usually limited to public policy grounds. Finally, in 
the UK (England and Wales) punitive  damages are available in  very rare circumstances where 
the defendant must have known he was acting unlawfully and continued with his conduct in the 
expectation that his gain would exceed any compensation which could be awarded to the victims 
of  his  conduct.  However,  punitive  damages  are  not  available  in  the  competition  mechanism, 
introduced  by 
the 
Recommendation. 

the  2014  Antitrust  Damages  Directive50  after 

the  adoption  of 

It can be concluded that the majority of Member States do not award punitive damages in mass 
harm situations as a result of the general approach taken on the basis of a long standing principle 
in the Member States' civil law systems. 

2.3.5  Follow-on actions 

The Recommendation urges Member State to include in their legislation a rule based on which if 
proceedings  before  a  public  authority  are  pending,  private  action  should  only  start  after  the 
conclusion  of  those  proceedings.  If  such  proceedings  started  after  the  private  action,  the  court 
where the latter action is pending should be able to stay proceedings to await a final decision of 
the  public  authority.  The  expiration  of  limitation  or  prescription  periods  before  the  public 
authority issues a final decision should not prevent parties from seeking compensation in private 
action51. 

48 Paragraph 31 of the Commission Recommendation 
49 Due to the absence of a compensatory collective redress system punitive damages have not been of relevance in 
this area. 
50  Directive 2014/104/EU  of  the  European  Parliament  and  of  the  Council  of  26  November  2014  on  certain  rules 
governing  actions  for  damages  under  national  law  for  infringements  of  the  competition  law  provisions  of  the 
Member States and of the European Union, OJ L 349, 5.12.2014, p. 1 
51 Paragraphs 33 and 34 of the Commission Recommendation 

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For reasons of procedural economy and legal certainty, compensatory relief action can be more 
efficient  if  introduced  after  the  completion  of  the  procedure  before  a  public  authority,  be  it  a 
court  or  an  administrative  body  such  as  a  competition  authority.  However,  awaiting  such  a 
decision  should  not  have  the  result  of  depriving  potential  claimants  of  their  right  of  access  to 
court, for instance because of the expiry of limitation or prescription periods. 

Rules under binding Union law in that respect only exist in the area of competition. Under the 
Antitrust  Damages  Directive  a  finding  of  an  infringement  in  a  final  decision  of  a  national 
competition  authority  or  by  a  review  court  is  deemed  to  be  irrefutably  established  in  domestic 
follow-on  actions  for  damages  and  at  least  prima  facie  evidence  in  follow-on  action  in  other 
Member States. The Directive also provides for the suspension of limitation periods. It applies to 
collective actions where they exist, but it does not require Member States to introduce collective 
actions in their national legal systems.  

In regards to consumer law, the Injunctions Directive does not regulate the issue of the follow-on 
actions. In most Member States the injunction order only has an inter partes effect (between the 
parties). According to the Fitness Check Study, this poses problems for the effectiveness of the 
procedure since individual consumers who bring claims for damages based on an infringement 
that gave rise to an injunction have to prove the infringement anew. This in turn increases their 
litigation risk as  well as costs for them and  for the court system at large. Therefore, the Study 
indicates  that  it  should  be  possible  to  rely  on  injunction  orders  in  follow-on  actions  for 
compensation  both  of  individual  and  (where  available)  collective  nature  and  that  prescription 
periods for follow-on damages actions should be suspended until the final injunctions decision.  

In DK, BE and IT it is possible to rely on an injunctions decision in a follow-on collective action 
in  consumer  law  cases.  Collective  horizontal  actions  can  be  initiated  in  BG.  In  NL  follow-on 
actions are possible not as a matter of law but rather of practice  

The  call  for  evidence  shows  that  follow-on  actions  are  resorted  to  mostly  in  competition  law 
cases,  where  compensatory  relief  actions  follow  a  decision  of  a  public  authority  on  an 
infringement of competition law. Such cases were reported from NL, FI and UK. One interesting 
consumer  case  in  the  area  of  financial  services was  reported  from  FI,  where  subsequent  to  the 
administrative  and  the  court  decisions  on  an  infringement,  successful  direct  negotiations  were 
engaged between the consumer association and the defendant. 

It can be therefore concluded on this point that the Recommendation is implemented in the laws 
of  the  Member  States  only  to  a  very  limited  extent.  While  collective  follow-on  actions  are 
available  in  a  number  of  Member  States,  there  is  no  evidence  that52  the  principles  of  the 
Recommendation have been followed with regard to the priority to be given to the decision of 
the  public  authority  and  to  limitation  periods.  Therefore,  such  follow-on  actions  can  have  an 
impact on the right of access to courts of the claimants due to the fact that no specific rules on 
limitation  or  prescription  period  were  enacted,  contrary  to  what  is  suggested  in  the 
Recommendation. 

2.3.6  Registry of collective actions 

52 Outside the scope of Directive 2014/104/EU inasmuch as Member States allow collective follow-on in the area of 
competition law. 

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The  Recommendation  invites  the  establishment  of  national  registries  of  collective  redress 
actions,  also  disseminating  information  on  the  available  methods  of  obtaining  compensation, 
including  out  of  courts  methods.  Coherence  between  the  information  gathered  in  different 
national registries and their interoperability should also be ensured53. 

This  principle  was  introduced  in  the  Recommendation  in  particular  due  to  the  fact  that  only 
where  information  is  available on pending litigation  can the "opt-in" principle  be implemented 
and thus parties can decide whether to join in pending litigation or not. This need is even more 
pressing in cross-border situations where  national methods  of dissemination of information  are 
not always directed to a foreign public. 

This  principle  is  by  and  large  not  followed  in  the  collective  redress  schemes  of  the  Member 
States. Only the UK has a national registry for group litigation orders and one for competition 
actions. SI intends to introduce such a registry in its new legislation on collective redress. It can 
be thus concluded on this point that the Recommendation had almost no impact on the laws of 
the Member States. 

3  CONCLUSIONS AND NEXT STEPS 

As  expressed  in  the  Recommendation,  appropriately  designed  and  balanced  collective  redress 
mechanism contribute to the effective protection and enforcement of rights granted under Union 
law, since "traditional" remedies are not sufficiently efficient in all situations.   

Without a clear, fair, transparent and accessible system of collective redress, there is a significant 
likelihood that other ways of claiming compensation will be explored, which are often prone to 
potential abuse negatively affecting both parties to the dispute.  

In  many  instances  affected  persons  who  are  unable  to  join  forces  in  order  to  seek  a  redress 
collectively  will  abandon  their  justified  claims  at  all,  due  to  excessive  burdens  of  individual 
proceedings. 

The  Recommendation  created  a  benchmark  comprising  the  principles  of  a  European  model  of 
collective redress. This happened in a situation in which many of its elements were present in the 
legal  systems  of  a  large  part  of  the  Member  States  while  in  other,  albeit  smaller  group  of   
Member States the very concept of collective redress was not known. Therefore the impact of the 
Recommendation should be seen and considered in two dimensions: first as a point of reference 
in discussions on facilitation of access to justice and prevention of abusive litigation, and second 
as a concrete incentive to adopt legislation complying with these principles in Member States. 

With  regard  to  the  first  dimension,  the  Recommendation  has  made  a  valuable  contribution  in 
terms  of  inspiring  discussions  across  the  EU.  It  also  provides  a  basis  for  further  reflection  on 
how some principles such as those concerning the constitution of the claimant party or financing 
of  litigation  may  best  be  implemented  to  guarantee  the  overall  balance  between  the  access  to 
justice and prevention of abuses.  

53 Paragraphs 35 to 37 of the Commission Recommendation 

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As far as the transition into legislation is concerned, the analysis of the legislative developments 
in  Member  States  as  well  as  the  evidence  provided  demonstrate  that  there  has  been  a  rather 
limited follow-up to the Recommendation. The availability of collective redress mechanisms as 
well as the implementation of safeguards against the potential abuse of such mechanisms is still 
very unevenly distributed across the EU. The impact of the Recommendation is visible in the two 
Member States where new legislation was adopted after its adoption (BE and LT) as well as in SI 
where new legislation is pending, and to a certain extent in the Member States that changed their 
legislation after 2013 (FR and UK).  

This  limited  follow-up  means  that  the  potential  of  the  principles  of  the  Recommendation  in 
facilitating access to justice for the benefit of the functioning of the single market is still far from 
being fully exploited. There are 9 Member States that do still not provide for any possibility to 
collectively  claim  compensation  in  mass  harm  situations  as  defined  by  the  Recommendation. 
Furthermore,  in  some  Member  States  that  formally  provide  for  such  possibility,  in  practice 
affected  persons  do  not  use  it  due  to  the  rigid  conditions  set  out  in  national  legislation,  the 
lengthy nature of procedures or perceived excessive costs in relation to the expected benefits of 
such actions. The call for evidence has also demonstrated that in some cases collective judicial 
action  can  be  usefully  avoided  because  of  successful  out-of-court  settlements,  sometimes  as 
follow-on  to  an  administrative  action.  This  highlights  the  importance  of  effective  out-of-court 
disputes resolution mechanisms in line with the Recommendation.   

Whilst the Recommendation has a horizontal dimension given the different areas in which mass 
harm  may  occur,  the  concrete  cases  reported,  including  the  car  emissions  case,  clearly 
demonstrate that the areas of the EU law relevant for collective interests of consumers are those 
in which collective redress is most often made available, in which actions are most often brought 
and in which the absence of collective remedies is of biggest practical relevance. It is in those 
same areas that binding EU rules on the injunctive dimension of collective redress exist and have 
proven  their  value.  The  Injunctions  Directive  regulates  representative  action  initiated  by 
qualified  entities  in  particular  in  the  form  of  non-profit  organisations  or  public  authorities  in 
relation  to  which  concerns  regarding  abusive  litigation  driven  by  profit  interests  of  third-party 
funders appear to be unfounded. 

This picture is confirmed by the results of the call for evidence. While consumer organisations 
make a strong case for EU-wide intervention in this field, business organisations generally focus 
their  concerns  in  relation  to  EU  action  on  the  consumer  area  and  refer  to  proportionality  or 
subsidiarity concerns, urging the Commission to concentrate on public enforcement or on redress 
via ADR/ODR or the small claims procedure.  

Against that background, the Commission intends  

 

 

to  further  promote  the  principles  set  out  in  the  2013  Recommendation  across  all  areas, 
both in terms of availability of collective redress actions in national legislations and thus 
of improving access to justice, and in terms of providing the necessary safeguards against 
abusive litigation;  
to  carry out further analysis for some aspects of the Recommendation which are key to 
preventing  abuses  and  to  ensuring  safe  use  of  collective  redress  mechanisms,  such  as 
regarding funding of collective actions, in order to get better a picture of the design and 
practical implementation; 

20 

 
 
 
 

to  follow-up  this  assessment  of  the  2013  Recommendation  in  the  framework  of  the 
forthcoming initiative on a "New Deal for Consumers", as announced in the Commission 
Work  Programme  for  201854,  with  a  particular  focus  on  strengthening  the  redress  and 
enforcement aspects of the Injunctions Directive in appropriate areas.  

54 COM(2017)650 final 

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