Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC entered into force on 20 December 2020 and must be implemented by 25 December 2022 and come into force in EU member states no later than 25 June 2023.
The Directive will allow collective actions to be brought by a representative body against businesses if they breach EU laws intended to protect consumers. This includes laws in a broad range of areas such as data protection, travel and tourism, financial services, energy and telecommunications.
EU member states must put in place at least one effective procedural mechanism that allows such actions to be brought. Qualified entities, representing consumer groups, can seek a wide range of remedies, including declarations of law, injunctions or financial compensation. These entities will be legally and financially supported to bring actions on behalf of groups they represent.
The law is a Directive, meaning that each Member State has discretion to implement it into their domestic regime as they see fit. Some Member States already have well-developed collective action regimes which can be used to address a wide range of legal issues; others have the procedural mechanism but for a more limited pool of complaints; and others still have no collective action regime at all under current laws. Consequently, there will be varying degrees of change afoot in each Member State in the period up to 25 December 2022, the deadline by which Member States must pass national laws to implement the Directive. The laws must come into force by 25 June 2023.
Below are links to two maps to assist businesses with monitoring and assessing the risk of being targeted by a consumer class action in Europe:
The Current Collective Action Landscape Map: this map provides a snapshot of the currently available collective action mechanisms in major European jurisdictions (EU and non-EU). Class actions have already arrived in Europe, with certain jurisdictions emerging as particularly “high-risk” for companies who may find themselves on the receiving end of a mass claim. Businesses can use this map as a starting point to assess the likelihood of being sued by a group in each jurisdiction, to understand what form such action might take and to identify what procedural hurdles might exist to slow down or prevent the action from gaining ground.
The Collective Redress Directive Implementation Tracker: this tool will track the implementation of the Directive in each EU Member State. It uses a simple colour code to denote the stage of implementation, and indicates, based on the existing collective action regime in any given country, what level of change will be required in order for the Member State to implement the Directive.
Consumer facing businesses, in addition, should be aware of The Omnibus Directive, also known as the “Enforcement and Modernisation Directive” (Directive (EU) 2019/2161), which aims to strengthen consumer protection by modernising existing EU consumer legislation and enhancing enforcement measures. The Directive introduces GDPR-style fines for certain breaches (maximum fines must be at least 4% of the trader’s annual turnover or €2 million where the turnover cannot be calculated). Implementation was supposed to occur in EU Member States by 28 May 2022 but transposition is still occurring in many. Click here to access the tracker which contains information about current the implementation status across Member States, as well as Q&A with the most important changes under the national transpositions outlined.
Bird & Bird has expert litigators in 14 countries across Europe, and a depth of experience in the strategies and tactics required to successfully defend a collective action. If you would like to learn more about this, please get in touch.