Consumer representative actions: Is the EU’s new system better?
Oliver Holland and Walker Syachalinga explain the differences between the European Union’s new system for bringing representative legal action and the system that still applies in England and Wales.
Posted on 19 October 2022
- The “same interest” requirement – English law requires anyone bringing representative actions to have the same interests as the people represented so that the representative can be relied on to promote and protect the interests of those represented (Lloyd at  and ).
The EU Directive allows only ‘qualified entities’ such as public authorities or consumer protection organisations to bring representative actions (Art 7(6). The qualified entity must be a legal person with 12 months’ actual public activity, a legitimate purpose in the protection of consumer interests, be non-profit making, not subject to insolvency proceedings and be independent and not influenced by parties acting as a trade, business, craft or profession (Arts 3(4) and 4).
- Discretion of the court – Even where a person satisfies the court that they have the same interest as those they are representing, English law gives the court the discretion whether to allow their claim to proceed by considering whether it meets the overriding objective of dealing with cases justly and at proportionate cost (Lloyd at 75]).
- No requirement of consent – Under English law there is no requirement for a person bringing a representative action to obtain the consent of all persons being represented (Lloyd at ).
- The class definition – setting out the number and identities of individuals being represented is not a precondition for bringing a representative action under English law. While doing so may be desirable the court retains the discretion to decide whether a representative group has been adequately identified (Lloyd at ).
- Under the EU Directive, where a remedy being sought does not name individuals entitled to benefit from it, it must describe the group of consumers entitled to benefit (Art 9(5)).
- Liability for costs – as people represented by a representative claimant or defendant will not usually have joined the claim themselves, they will not usually have to pay any costs incurred by the person who brought (or defended) the claim. That does not prevent the court from making an order requiring a represented person to pay or contribute to costs and giving permission for the costs order to be enforced against that person under CPR 19.6(4)(b) (Lloyd at ).
- The scope for claiming damages – it does not matter that the facts giving rise to the claim may differ for each represented person or that individuals are seeking from the court a combination of compensation or some other monetary relief. However, what limits the scope for claiming compensation in representative actions is the principle that damages for a civil wrong are awarded with the aim of putting each individual in the same position as if the wrong had not occurred. In most cases it becomes necessary to assess each individual’s claim, hence representative actions are not suited to such situations (Lloyd at ).
- Under the EU Directive, ‘qualified entities’ can ask the court to compel the defendant to cease or prohibit an act or to make amends by compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid (Art 7(4)).
For English law to become more like the US style class action system, or indeed the Directive, the strict ‘same interest’ requirement would need to be loosened.
Oliver specialises in international cases involving multinational corporations where environmental harm or human rights abuses have been alleged
Walker is an associate solicitor in the international and groups claims department