Academic journal article Defense Counsel Journal

Is the Class Action 'Centre of Gravity' Moving Away from the United States

Academic journal article Defense Counsel Journal

Is the Class Action 'Centre of Gravity' Moving Away from the United States

Article excerpt

This article originally appeared in the July 2013 International Committee newsletter.

MANY FEATURES of the US legal system have been exported to the rest of the world and, perhaps, the most striking of those features is the "class action." With the possible exception of punitive damages, few if any of those exports have been as feared and derided as the class action. Indeed, as Paul Karlsgodt observed:

   Both in the United States and abroad, the
   term often evokes a visceral reaction by
   business people, lawyers, academics, public
   officials, journalists, and ordinary
   consumers. For some, class actions are
   synonymous with the greed, frivolity, and
   abuse that exemplifies all that is wrong
   with the American legal system. To
   others, class actions even the playing field
   for those without power to vindicate their
   rights against powerful corporate and
   government interests. (1)

It is perhaps for this reason that pretty well every proposal for the adoption of a class action regime that has been advanced anywhere in the world has been met with hard fought opposition from the business community and those who represent defendants. This can be seen in the response to proposals to introduce 'class actions', however called, in Australia in the late eighties/early nineties, England in the late nineties and more recently by the European Commission. Indeed, it is telling that virtually no proponent of a class action procedure outside North America has been willing to adopt the term "class action" to describe what they are seeking to adopt, preferring instead "representative proceeding" (Australia in 1992), "Group Action" (Australia in 1988 and England in the 1990s) and Collective Redress (European Commission).

It is also significant that those arguing for the adoption of a class action regime will inevitably devote a great deal of time and effort to devising 'safeguards' which they then assure the business community and others will prevent the newly adopted scheme displaying all the apparent vices of the US class action system--see for example the Australian Law Reform Commissions 1988 report (2) and the most recent proposal from the European Commission which observes that:

   ... they [the proposed measures] must
   not attract abusive litigation or have the
   effects detrimental to respondents regardless
   of the results of the proceedings.
   Examples of such adverse effects can be
   seen in particular in 'class actions' as
   known in the United States. The European
   approach to collective redress must
   thus give proper thought to preventing
   these negative effects and devising adequate
   safeguards against them. (3)

Unfortunately, history suggests that the so called 'safeguards' will be short lived. (4)

Notwithstanding these concerns and objections, most proposals to introduce a class action regime ultimately succeed--albeit sometimes only after protracted debate. The explanation for this is relatively simple. While most legal systems had mechanisms or procedures for the simultaneous resolution of the claims of two or more plaintiffs, they inevitably reflected "... the usual rule that litigation is conducted by and on behalf of individual named parties only." (5) As a consequence their utility was limited and most jurisdictions have ultimately succumbed to the siren call of the class action.

As an ever increasing number of jurisdictions adopt what can only properly be described as a 'class action' regime the class action 'centre of gravity' may be starting to move away from the United States and towards some of the newcomers to the world of true multi-plaintiff litigation. This is not to suggest that these newer jurisdictions are likely to overtake the United States in terms of the sheer number of class actions or their dollar value. Rather, it seems that the focus of class action innovation may be moving to other jurisdictions along with an increasing likelihood that claims that have previously been litigated in the US courts may now be seen elsewhere. …

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