New rules to help consumers join forces to seek compensation

consumers 2019

(Frankie Cordoba, 2019)

This article is brought to you in association with the European Parliament.


Rules allowing groups of consumers harmed by illegal practices to launch collective actions and seek compensation were confirmed by plenary on Tuesday.

Currently, only 19 member states provide some form of legal remedy to victims of mass harm and proceedings can often be lengthy and costly, especially if victims go to court individually.

The new rules address concerns raised by recent mass harm scandals with cross-border implications (Dieselgate, Ryanair). They would allow group action against trader violations with a broad public impact in domestic and cross-border cases in different consumer areas such as data protection, financial services, travel and tourism, energy, telecommunications, environment and health.

The new representative action rules would:

  • strengthen the right to access to justice by allowing consumers to join forces across borders and jointly request that unlawful practices be stopped or prevented, or to obtain compensation for the harm;
  • harmonise collective redress mechanisms and end disparities across member states;
  • reduce the financial burden and make remedies more accessible through collective representation;
  • strike a balance between citizens’ access to justice and protecting businesses from abusive lawsuits through the “loser pays principle introduced by MEPs.

Eligible representation and safeguards

Under the new draft rules, representative action can only be brought by eligible entities, such as consumer organisations and certain independent bodies designated by member states. These should be non-profit and have no financial agreements with law firms.

Finally, the text requires the Commission, within three years, to assess if a European Ombudsman for collective redress should be established.

Quote

The rapporteur Geoffroy Didier (EPP, FR) saidThis reform strikes the right balance between increasing consumer protection on one hand and the necessary legal safety for companies; it goes even further, by showing that safety and security need to go hand in hand.

“The aim is not to punish anyone, but to compensate victims for any loss. The text also ensures all dangers and failures inherent in American class action are avoided” concluded Didier.

Next steps

Plenary confirmed its negotiating position by 579 votes to 33, with 43 abstentions. For the legislation to enter into force, both Parliament and Council need to find an agreement, but talks cannot start before the latter adopts its position.

Background

The Representative Action Directive is a part of the New Deal for Consumers, launched in April 2018 by the European Commission, to ensure stronger consumer protection in the EU. It includes stronger consumer rights online, tools to enforce rights and compensation, penalties for violating EU consumer law and improved business conditions.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

How do we upskill a billion people by 2025? Leadership and collaboration will be key

The Commission calls for a climate neutral Europe by 2050*

COVID-19: Budget MEPs call for quick progress on post-2020 contingency plan

4 steps towards wiping out cervical cancer

These are the best MBAs if you want to be an entrepreneur

China-EU Special Report: Chinese Premier Li Keqiang endorses China’s big investment on Juncker’s plan at 10th China-EU Business Summit

Sochi not far away from Ukraine

Why are Black people in the UK more at risk from COVID-19?

UN member states express their will to tackle global migration but specific actions are still missing

International Women’s Day: Where does she belong?

COVID-19 is an unmissable chance to put people and the planet first

In Pakistan, Guterres urges world to step up climate action, praises support to Afghan refugees

1 in 4 Africans had to pay a bribe to access public services last year

A Young student assesses the Programme for International Student Assessment (PISA)

‘Over-reacting is better than non-reacting’ – academics around the world share thoughts on coronavirus

Berlin cannot dictate anymore the terms for the enactment of the European Banking Union

OECD’s Gurría calls for overhaul of economic thinking to address global challenges

Finnish Council Presidency priorities debated in plenary

7 innovative projects making cities more sustainable

ECB settles the bank resolution issue, makes banking union tangible

Tobacco-free Public Space in Africa’s Most Populous Country

There are more than 1 billion guns in the world and this is who owns them

UN lauds special chemistry of the periodic table, kicking off 150th anniversary celebrations

How video games can reunite a divided world

Brussels wins game and match in Ukraine no matter the electoral results

The true EU unemployment rate may have soared to 21.9%

Landmark EU Parliament – ECB agreement on bank supervision

GSMA announces first speakers for Mobile 360 Series-Middle East and North Africa

OECD sees rising trade tensions and policy uncertainty further weakening global growth

Does hosting a World Cup make economic sense?

How governments and mobile operators are easing network congestion during the COVID-19 crisis

Macron leads EU-wide minimum wage call as Merkel, Medvedev warn of global injustice

Coronaviruses: the truth against the myths

Sustainable fisheries: Commission takes stock of the EU’s Common Fisheries Policy and launches consultation on the fishing opportunities for 2021

Hungary: Commission takes next step in the infringement procedure for non-provision of food in transit zones

Do we need a new Marshall Plan to rebuild Europe after COVID-19?

Summertime Consultation: 84% want Europe to stop changing the clock

Groundbreaking cancer-fighting drugs now included in updated UN list of essential medicines

First-ever global conference of national counter-terrorism chiefs will strengthen cooperation, build ‘resilient’ States, says top UN official

Stricter rules to stop terrorists from using homemade explosives

3 innovations which are leading the fight to save our ocean

During the coronavirus pandemic, we must fight for LGBTQ rights more than ever

New rules make household appliances more sustainable

The world is failing miserably on access to education. Here’s how to change course

The ECB ‘accidentally’ followed IMF‘s policy advice for growth and job creation by printing more money

Don’t compare data to oil – digitization needs a new mindset

Q&A on extraordinary remote participation procedure

What kind of action on social justice should we expect from companies in the future?

Banks get new capital for free and citizens pay the bill

The widely advertised hazards of the EU not that ominous; the sting is financial woes

David Attenborough: The planet can’t cope with overpopulation

The future of suicide and depression prevention

These 5 start-ups are shaping the future of Africa’s cities

Migration and asylum: EU funds to promote integration and protect borders

Here’s how sustainability can make you stand out from the crowd

Dieselgate: Parliament calls for mandatory retrofits of polluting cars

It’s not summer holidays what lead to the bad August of the German economy

We need to deep clean the oceans. Here’s how to pay for it

As people return to work, here’s how we can make commuting more inclusive and sustainable

International Literacy Day: What you need to know about youth literacy

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s