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Collective redress: EP vote risks class action abuses
AmCham EU is disappointed by today’s vote in the Legal Affairs Committee of the European Parliament, which takes us a step closer to a class action system that does not strike the right balance between consumer protection and safeguards for businesses.
As US companies invested in Europe, AmCham EU members support efforts to facilitate access to justice and ensure a high level of protection for the consumers they serve.
In particular any move to allow consumers to pursue collective actions must include the safeguards which the European Commission recommended to national governments in 2013. The text adopted by the Legal Affairs Committee does not include these safeguards to a sufficient extent to disincentivise abuse.
The Committee’s text would – as a result – create a system which puts consumers at risk of exploitation by profit-driven litigation. The Committee’s report lacks strong criteria for the types of entities who can represent consumers; a requirement for consumers’ consent before actions are launched on their behalf; and robust protections against third-party litigation funding and contingency fees.
Neither businesses nor consumers would benefit from a system which leaves the door open for opportunistic litigation. We urge national governments to ensure that their position – and any text agreed with the European Parliament – meets the key objective of ensuring a collective redress system that helps consumers and not those pursuing profit at their expense.
For more information on AmCham EU’s position on collective redress, please see our position paper here.