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EU rules on collective redress for consumers: Proportionate approach needed

EU rules on collective redress for consumers: Proportionate approach needed


​​Proposed EU rules on collective redress for consumers should not impair well-working member state procedures.

>> See position paper

​BRUSSELS, 27 September 2018 – Any attempts by EU legislators to elbow in to tweak the way collective interests of consumers are handled should not end up impairing well-performing procedures in force in many member states' legal systems, ESBG argues in a recently published paper. 

The association representing savings and retail banking in Europe points out that numerous Member States already provide for effective instruments of collective redress for consumers and some are undergoing improvements. Also, if proposed EU rules are adopted, wording in the legal text should be crafted to grant competence solely to courts.

ESBG examines in the paper specific areas of collective redress for consumers, including the need to allow a procedure to be initiated even when the effects of an infringement are still ongoing. In addition, a minimum number of consumers should be set for the procedure.

ESBG also argues that the criteria for qualified entities is set too low. To address this, legitimate interest must be demonstrated and viable, non-profit making character does not protect against abuse, ad hoc entities should not be allowed. Furthermore, supervision of qualified entities should be established, and there should be no concept of regional entities allowed.

On imminent infringements, the procedures should only be allowed when proof of serious harm can be provided. Moreover, the association opposes the proposed discovery process. Separately, ESBG also posits that a mandate of individual consumers should be obtained by qualified entities – a mandatory opt-in – to ensure most importantly the effective application of the principle of res iudicata.

ESBG opposes punitive damages in de minimis cases as well as the irrefutable presumption of final decisions as this could undermine the authority of national courts as well as establish links which do not exist in some Member States, for example between public and private law sanctions.

Consumer Redress; European Institutions; European Supervisory Authorities (EBA-ESMA)