The European Commission’s consumer policy is handled by the Health & Consumers’ Directorate General, and Meglena Kuneva is the EU Consumer Commissioner. In March 2007, the European Commission adopted a new Consumer Policy Strategy for 2007-2013, setting out objectives and priorities for the future.
This commented:
“If consumers are to have sufficient confidence in shopping outside their own Member State and take advantage of the internal market, they need assurance that if things go wrong they have effective mechanisms to seek redress. Consumer disputes require tailored mechanisms that do not impose costs and delays disproportionate to the value at stake.”
The Commission believes that EU consumers who have small claims refrain from bringing court actions because the costs of bringing the actions outweigh the amount of damages obtained, and thinks that collective redress could address this problem. It therefore held two events in 2007 for interested parties: a ‘brainstorming event’ in Leuven in June and a conference in Lisbon in November. It has since consulted on a set of ‘benchmarks’ that systems of collective redress should respect in order to ensure satisfactory redress for consumers. In May and June 2008, it held workshops for consumer organisations, industry and legal practitioners, with the intention of issuing a communication by the end of the year.
Making it easier for European consumers to seek collective redress would have implications both positive and negative for insurers, particularly those writing liability insurance. On the one hand, it could reduce the number of individual cases resulting from a single incident and allow negotiation with a group representing all claimants, thereby reducing the costs of legal actions. On the other, it could mean an increase in the number and size of legal settlements, and lead to unmeritorious claims being pursued.
About half the member states already have some form of provision for collective redress. The UK has the Group Litigation Order, making it possible for a judge to deal at one time with a number of claims for matters in common. It also has provisions for group actions under the Competition Act 1998 and the Enterprise Act 2002.
The European insurers’ association, the CEA, is monitoring developments and has established a Collective Redress Task Force. Lloyd’s is a CEA member and receives regular updates on this issue – the Collective Redress Task Force reports to the CEA’s Single Market Committee, chaired by Alastair Evans, Lloyd’s Head of Government Policy and Affairs.
