The European Class Action Regime
Class actions have long been a staple of the US legal system where measures have been in place for more than 60 years to make it as easy as possible for attorneys to fight legal disputes with many claimants. It’s an important part of the country’s consumer protection system. Companies know that if they do wrong to their customers, employees or associates, everyone they have wronged can group together and seek redress.
While it has always been theoretically possible for lawyers in Europe to attach multiple parties to the same claim, a streamlined process that makes it easy for European claimant lawyers to bring mass actions had been lacking.
That’s why in 2018 the European Union proposed what it called ‘The Directive on representative actions for the protection of the collective interests of consumers.’ It came as part of the EU’s New Deal for Consumers, a strategy to strengthen and modernise consumer protection across the bloc.
The Directive allows ‘qualified entities’ to bring representative actions against a business or organisation that may have harmed the collective interests of a group of consumers. That action can either be ‘opt in’ or ‘opt out’.
In short, that means that a ‘consumer champion’ working with a single law firm can bring a case on behalf of potentially millions of claimants, and if that consumer champion wins the case, so too does the entire group.
The Directive put jurisdictions across Europe on notice that, at some point in the future, they would be required to adopt some sort of class action framework that made group redress easier.
And it spurred action. The UK, despite Brexit has been bringing in various measures aligned with the Directive. Germany introduced a class action regime in 2018 as did the Netherlands in 2020. Across Europe lawyers and lawmakers are working out ways to improve or create group action cases.
The European Parliament endorsed the Directive in November 2020. As with all Directives, EU Member States have 24 month and 20 days to implement the measures. That means that, by the end of 2022, all of the EU 27 are required to have a class action consumer redress system in place.
You can read more about how our claims automation solution is helping law firms across Europe here. Or if you would like a demonstration or to speak to a member of our team you can email or call us directly.
Questions and answers
Q: Are there any other names for class action lawsuits?
A: The most common name for legal disputes involving many claimants is ‘class action lawsuit’ or ‘class action litigation.’ However, they can also be called ‘group actions,’ ‘group claims,’ ‘collective actions,’ ‘mass torts,’ ‘group claim lawsuits,’ to name a few. Although there are various different legal regimes governing the way class actions progress, what they all have in common is that they represent many, sometimes millions, of claimants.
Q: What is the ‘collective action regime’?
A: It is shorthand for the EU Directive on collective redress which stipulates that all members of the EU must have some form of class action regime in place by the end of 2022. There are already many class action lawsuit active claims across the EU and in the UK. Due to the evolving nature of the regime, new group claims are likely to grow in number over the coming years.
Q: How do class action lawyers handle new group claims?
A: There is no stipulated way for class action lawyers to manage class action litigation. However, managing a case with thousands of claimants requires organisation and class action claims administration is complicated. Most lawyers will use some form of claims management software. Often, they will use a claims management platform to which claimants can upload data. In today’s data-driven world it would be hard if not impossible to run a large claim without some sort of dedicated claims system, claims handling software, or claims management website. Click here for more details of FinLegal’s claims handling software.
Q: Are class actions in England and Wales different from EU class actions?
A: The UK has its own class action regime. You can find out more about the UK class action regime here.
Q: Are class actions common in Europe?
A: They aren’t as common as in the US and Australia. Class actions in England and Wales are on the rise following legislation in 2015. Due to the EU collective action regime, all members of the EU 27 are required to have class action regimes in place by the end of 2022. New class action claims from across Europe are, therefore, highly likely.
Q: What are some group claim lawsuit examples?
A: The most high-profile group action lawsuit in England and Wales in called Merricks v MasterCard. There are many class action lawsuit claims planned, and many active group claims in the system. It is, however, impossible to know how many there are across the region as there is no centralised database or class actions lawsuit list.
Q: What are the biggest group action lawsuit claims?
A: It depends on how ‘biggest’ is defined. Merricks v Mastercard potentially represents every adult in the UK, so millions of people. The Tobacco Master Settlement in the US was worth more than $200 billion.
Q: What are the largest class actions lawsuits/biggest group actions settlements of all time? How big are big group claim settlements?
A: As class actions involve many people, even a small per person payment can lead to a big group claim settlement. However, the biggest ever class action lawsuit was the Tobacco Master Settlement Agreement of 1998, a case brought against the four largest cigarette manufacturers in the US. The total settlement was more than $200 billion. Class action settlements, in total, are rarely small. $200 billion is by far the largest, and no other claims to date have come near that figure.
Q: What is the difference between opt in and opt out?
A: The difference is explained here.
Q: What big group claim settlements have there been in the UK?
A: So far, all of the group claims filed under the 2015 regime at the Competition Appeals Tribunal have yet to conclude.
Q: Are new class actions common?
A: They are becoming increasingly common in the UK and parts of the EU. They have been an established part of the US system for well over half a century.
Q: What does group action software do?
A: Click here for more details of FinLegal’s claims handling software.
Q: Is group action software the same as claims manager software?
A: FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.
Q: What is a claims management platform?
A: A claims management platform is a web-based software solution for managing class action litigation. FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.