Collective Redress for Consumers: Toward an Eu Wide Collective Action Mechanism

By Calu, Monica; Stanciu, Costel | Global Economic Observer, July 1, 2018 | Go to article overview

Collective Redress for Consumers: Toward an Eu Wide Collective Action Mechanism


Calu, Monica, Stanciu, Costel, Global Economic Observer


1.Introduction

Even certain collective redress mechanisms exist all over Europe, their efficiency is contentious. Surveys such as "Fitness check of consumer law3" and "Evaluation of the effectiveness and efficiency of collective redress mechanisms in the European Union4" have revealed that the existing redresses are rarely used or they do not determined the expected results, in almost all Member States.

Collective redress for compensation, also known as a group action or a class action, reunites consumers who have suffered the same or very similar loss or harm caused by the same trader. They come in court as a group and seek redress, in one legal claim.

Alternative dispute resolution it's a collective term for the ways that parties can settle a dispute by means of extra-judicial mechanisms with (or without) the help of a third party.

Even if these two notions of „collective redress" and „ADR", at first sight, apparently have little in common, these two topics have become closely related in disputes regarding consumers who have had their rights violated by traders.

Even if judicial collective redress procedures cannot be replaced by Alternative Dispute Resolution (ADR) or amicable settlements, we must put aside the assumption that the courts offer the only technique that can deliver redress or that is not possible an amicable settlement procedure for mass claims. Parties in dispute should remain free to recourse to alternative means of dispute resolution before or in parallel to the formal introduction of the judicial claim, taking into account all available options.

According to international and European human rights law, the notion of access to justice obliges states to guarantee each individual's right to go to court - or, in some circumstances, an alternative dispute resolution body - to obtain a remedy if it is found that the individual's rights have been violated.

Non-judicial pathways to justice are also considered, including non-judicial bodies and alternative dispute resolution methods. Alternative dispute resolution (ADR) procedures, such as mediation and arbitration, provide alternatives to accessing justice via formal judicial routes. The EU has encouraged the use of ADR with legislation such as the EU Mediation Directive and a variety of consumer protection initiatives.

Dispute Resolution is one of the most talked-about topics nowadays. An area barely known or practiced a decade ago, it has now become the most reachable 'tool' for people who seek justice. Now we know that Court is not the only solution, and even more, we have begun to see it as a last resort solution.

The legal needs of ordinary people as consumers in their disputes with traders have changed over the last decade. After years of litigations and due to the large amounts of money and lengthy judicial procedures involved in the trial process, the consumers and the consumer's communities or consumer's associations have increasingly turned to legal alternatives that are more prompt, private and economical than the courtroom. Also, when the traders are faced with a dispute regarding the consumer's right, due to the changes in consumer protection legislation, the companies are learning that, whenever possible, it is more advantageous to them to solve their differences between themselves rather than relying on an expensive, time-consuming and sometimes inefficient judicial system. Now, the parties in dispute can reach practical and private agreements instead to fight for years and spend huge amounts of money in endless courtroom battles by using the ADR bodies and the Online Dispute Resolution (ODR) bodies have been created and linked together thorough the European Union. Almost all of the ADR systems use one or more of the same elementary dispute resolution techniques of negotiation, mediation, conciliation and arbitration.

Generally, the procedural rules regarding arbitration are more formal that the rules of mediation, but not as strict as procedural rules that govern litigation in court. …

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