- proposals for — and the introduction of — quasi-class action procedures in various parts of
- the opportunities that US claimant lawyers see in these developments; and
- the increasing adoption by
It is easy to see why
Tort reformers have financed the election of state judges sympathetic to that agenda and have successfully lobbied to introduce important procedural changes.
These and other initiatives have led to:
- the transfer — under the Class Action Fairness Act 2005 — of cases from state courts to federal courts, where there is a more objective and rigorous application of legal principles;
- limitations on punitive damages;
- restrictions on speculative and scientifically-dubious expert theories;
- the closure of many class action ‘hell-holes’; and
- an overall reduction in claims.
There has also been a demonstrable willingness of defendants to fight more claims, as exemplified by the determination of Merck to defend 24,000 claims over the drug Vioxx.
Yet in
Michael Hausfeld of Cohen Milstein Hausfeld & Toll, which opened a 10-lawyer City office in January, has described his task as “a crusade to export
He sees opportunities in competition, securities, employment and environmental claims.
It will be asserted that the critical procedural restraints in Europe — the absence of civil juries, punitive damages and contingency fees and the existence of the ‘loser pays’ rule — will prevent many of the abuses seen in the US. The assertion is complacent.
The introduction of new collective procedures is likely to create changes in European litigation culture and raise expectations that they will enhance access to justice — expectations likely to be thwarted by the current litigation restraints. That will lead inevitably to a concerted campaign for legislative changes to diminish their impact.
Policy-makers certainly do not regard the restraints as sacrosanct. The European Commission’s (EC’s) green paper on facilitating private damages actions for breach of antitrust rules illustrates the point. It raises the possibility of a new form of collective consumer redress, shifting the burden of proof to defendants, a doubling of damages (punitive damages in all but name) and costs to a successful defendant only if the claimants behave in a manifestly unreasonable manner.
Last year
Although the Department for Constitutional Affairs rejected the proposal, the rejection was qualified and may not withstand strong advocacy of such fee arrangements, particularly in the context of mass tort claims where the aggregate damages will make a contingency arrangement workable.
We now have a situation in
The debate signals a shift from the view that class actions are unwarranted and unwanted to a situation where they are seen as the benign harbinger of greater access to justice.
This trend is taking place in the absence of clear evidence of the need or desirability of class action reform. When the Austrian presidency of the European Union (EU) began in 2006 it made the focal point of its term the enhancement of consumer rights. It convened a conference on the subject, with a central element of the programme being the need for class action procedures in
The programme proceeded on the unsubstantiated assumption that there was a need for such procedural reform. In a highly competitive European economy with horizontal and vertical regulators, enforcement offices and agencies, commissioners, tsars, ombudsmen and ombudswomen, the emphasis on class actions is bizarre.
When the political dialectic is disappearing and party political leaders appear virtually interchangeable, the principal focus of political pitches to the electorate is to its status as a body of consumers.
European countries and the EU policy-makers are embarking upon class action reforms without establishing whether the interests of consumers require such them. They advocate a remedy without first establishing the ailment.
Paul Llewellyn is head of product liability at Reed Smith Richards Butler.