In an effort to boost cross border sales between member states of the European Union, as well as strengthening consumer rights, the EU commission is proposing a union wide class action law. Among the 27 states that form the EU, only 15 have class action laws and these suits are allowed within national borders only.
Meglena Kuneva, the European Union’s Consumer Affairs Commissioner, is convinced that the bloc’s market can be the largest retail market in the world. However, as she put it, “it remains fragmented to 27 national mini-markets, depriving consumers of lower prices, better choice and the European economy from an additional source of growth.” By introducing union wide class actions, consumers from across the bloc would be able to join together and claim compensation from companies that provided them with flawed products or services. This in turn would boost consumer confidence and lead to higher spending.
The law is being modeled after the American class action but with EU specific provisions. For example, consumers would be alerted to dangerous products.
It is interesting to compare the legislative intent behind the Quebec law and the EU’s proposal. When the Quebec law was passed in 1978, it had a social purpose in the sense that it was providing a legal recourse to individuals who shared a common problem of minimal pecuniary value and who would not and could not otherwise have access to the judicial system. Although the EU’s proposal seems to be consumer oriented, its main purpose is economic in the sense that it is attempting to motivate spending.
With that in mind, I fail to see how the introduction of a bloc wide class action law will lead to economic growth. When a person decides to purchase a product outside of his country, his decision is based on price, not the legal recourses available to him. As Ms. Kuneva points out, the proposed union wide class action should not be “an invitation to be more litigious”. Frankly, in this case, I can’t see it being anything but. Tell me what you think.
Read more about it here, here and here.
