Class Action in Consumer Protection (EU Law)

The Council of the EU today reached agreement on a draft directive on representative actions for the protection of the collective interests of consumers.

The draft directive is here.

The directive empowers qualified entities, such as consumer organisations, to seek, in addition to injunctions, also redress measures, including compensation or replacement, on behalf of a group of consumers that has been harmed by a trader in violation of one of the EU legal acts set out in an annex to the directive. These legal acts reflect recent developments in the field of consumer protection and extend to areas such as financial services, travel and tourism, energy, telecommunications and data protection, in addition to general consumer law.

Member states shall, for the purpose of representative actions for redress, be free to choose between an opt-in and an opt-out system. In an opt-in system, consumers will be required to express their wish to be represented by the qualified entity for the purpose of a particular representative action. In an opt-out system, consumers who do not wish to be represented by the qualified entity for the purpose of a particular representative action will be required to make a statement to that effect.

Member states will have 30 months from the entry into force of the directive to transpose it into national law, as well as an additional 12 months to start applying these provisions.

The directive will apply to representative actions brought after the date of application.

On the basis of the agreed text, the Council will start negotiations with the European Parliament with a view to exploring the possibility of an agreement for the swift adoption of the directive at second reading (“early second reading agreement”).

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