Fabian Demicoli

MEPs push EU closer towards collective redress system

System would enable groups of consumers to bring compensation claims against companies – An EU-wide system to enable groups of consumers to bring compensation claims against companies has moved a step closer this week when the European Parliament gives its formal support to the idea – but squabbling between EU officials and member states persists, delaying the introduction of legislation.

MEPs voted following unanimous approval by the Parliament's legal affairs committee, on a report on collective redress drawn up by Klaus-Heiner Lehne, a German centre-right MEP. The European Commission has been dragging its heels on the matter, having launched various consultations involving separate directorates-general dating back to 2008.

However, the intervention of the Parliament and decisions by some member states to delay the introduction of national law, has increased pressure for a formal proposal from the Commission in the coming months.

Joaquín Almunia, the European commissioner for competition, is making the running on the issue, but discussions also involve John Dalli, the commissioner for health and consumer policy, and Viviane Reding, the commissioner for justice, who is less enthusiastic about the idea.

Group compensation

An EU collective redress law would allow groups of consumers to obtain compensation for damages from companies in any member state. About half of EU member states have their own systems, but they differ widely. So-called forum shopping – where litigants choose the jurisdiction where they will most likely win – is commonplace.

There are vast differences between countries, but most national governments have informally suggested that they believe there is a need for EU legislation to create a level playing-field. "Ministries for economic affairs see the need more than ministries of justice, which usually consider their legal system to be supreme," said one EU official. "So not only do attitudes differ from one member state to another, but also within the member states."

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