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EU to relaunch debate on class-action lawsuit plan

Published 11 October 2010
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The European Commission will relaunch a debate next month on a controversial plan to help consumers launch class-action lawsuits to seek compensation for anti-competitive practices, according to a Commission document.

Former Competition Commissioner Neelie Kroes tried to lay out rules last year that would make it easier for consumers who suffer at the hands of companies that fix prices or abuse their dominant market position to take them to court.

But the proposals were shelved after criticism from companies worried about US-style class-action lawsuits and the possibility of hefty punitive damages. Class actions are rare in Europe.

Interested parties will be able to give their views during a consultation that will run until the end of February, the document showed.

In a May report commissioned by European Commission President José Manuel Barroso, elder statesman Mario Monti said it should be easier for victims of unfair business behaviour to be compensated in order to boost consumer confidence in the single market

The European Parliament has repeatedly backed Commission plans to provide individual EU citizens with a collective redress mechanism for the settlement of cross-border complaints, asking the EU executive in 2008 to carry out "extensive research" into the feasibility of introducing such a system across borders.

However, previous Commission attempts to consider ways of introducing such a system for victims of illegal commercial practices were judged to be "lacking ambition" by consumer groups.

(EurActiv with Reuters.)

Background: 

Collective redress makes it easier for small claimants in cross-border disputes to take action by allowing a large number of small claims to be bundled and brought to court by a third-party representative, such as a recognised consumer organisation.

According to European Commission figures from 2008, "76% of consumers would be more willing to defend their rights in court if they could join together with other consumers". 

Financial services (39%), telecoms (12%), transport (8%) and package tourism (7%) were identified as the sectors in which consumers find it most difficult to obtain redress for mass claims by a study carried out by the EU executive. 

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