CONSUMER ADR and COLLECTIVE REDRESS
Professor Dr Christopher Hodges
Head of the CMS Research Programme on Civil Justice Systems
Centre for Socio-Legal Studies, University of Oxford
Life Member, Wolfson College, Oxford
Erasmus Professor of the Fundamentals of Private Law
Erasmus University, Rotterdam
Collective Redress
Problem: How to deal with mass problems?
Fact: The most familiar technique within civil procedure
is the U.S. class action
Starting From Scratch
 What is architecture of the legal system?
 Is it the same in different parts of the world?
 Public and Private Enforcement:
different models in U.S. and EU
 Enforcement Policy: deterrence, risk, responsive…
Private Enforcement –
of private rights and public norms
 Encourage everyone to enforce
 Align substantive law
 Remove economic and technical barriers
 Insert economic incentives
Features of private enforcement: deterrence policy
 No cost to P
 No loser pays rule
 One-way cost shifting rule
 High/triple damages
 High fees for intermediaries
 Wide discovery and depositions
 Punitive damages
 Jury trials
 Aggregation of individual claims
 No regulatory pre-emption
Features of private enforcement: class actions
 Ban on class procedure if alternatives
 Restriction to certified personnel
 Certification criteria
 Evaluation of merits
 Certification by court
 Opt-in or opt-out
 Notice to class members
 Court approval of settlement
 Court approval of lawyers’ fees
 Stand-alone or follow-on
EU Events
 2008 14 MSs have collective rules: mostly little used
 Consultation on Benchmarks
 Several Studies
 Competition Damages: ECJ, DG COMP
 Collective actions →Collective redress + ADR
 2010 Consultations on CR and ADR
 2011 Principles? Safeguards?
Judicial need: origins and sectors
State
Origin
Type
medicinal products
horizontal
adulterated rape seed oil
consumer
competition damages policy
competition
academic
horizontal
Deutsche Telekom
investors
DES, blood products etc
settlement
Sweden
consumers
Parmalat etc
consumers, financial
Poland 2010
collapsed building
horizontal
France?
… France Telecom
Mediator
consumers
medicines?
Explosions, collisions,
bankruptcy,
Fortis nationalisation
?
England & Wales GLO 1999
Spain 2000
UK CAT 2002
Sweden 2002
Germany KapMuG 2005
Netherlands 2005
Denmark, Finland, Norway
2008
Italy 2008→2010
Belgium?
Issues
 Constitutional and fundamental rights problem with
determination of individual rights when the owner is
not involved,
eg opt-out
 Principles of subsidiarity, procedural autonomy,
proportionality
Issues with Private Enforcement
 Financial incentives or barriers (safeguards)
 eg loser pays
 contingency fees, third party funding, trip[le damages
 Technical barriers
 eg opt-in v opt-out
 certification
 Court approval of settlement
 The problem: inability to calibrate the level of
enforcement/abuse
What are we trying to do?
First principles
1.
2.
Set standards of behaviour
Prevent things going wrong (infringement)
3.
Put things right (restoration)
Three Pillar Model
ADR
Regulation
Private
Litigation
The New Integrated Model
 Voluntary Settlement – ADR
encourage specific schemes, negotiation, mediation, ombudsmen
 Regulatory Oversight of Restitution
Danish Consumer Ombudsman: residual powers to arrange collective redress,
or
UK targeted responsive enforcement policy, plus restorative justice
 Judicial Procedure
last resort, so not expansive, generally opt-in