This article will consider why the issue of collective redress justifies a different approach to the traditional one, where commissions or external experts draw up a report that is voted on and ultimately rejected or implemented through any kind of legislative action. The different approach is called ‘private rule-making’ which, although it may be more difficult to apply private rule-making in its purest form at European Union (EU) level than in a domestic environment, there is much to be gained by doing so.
The handling of mass disputes, whether in the field of consumer or antitrust, requires a specific approach, a very different mindset than the one European proceduralists or lawyers are used to. More specifically, hard and painful choices have to be made in order to design a system of collective redress that will actually work in practice. These choices concern, for example, matters of funding, evidence-gathering and the (aggregate) assessment of damages, but also rights that are considered fundamental within the EU and most Western societies, such as party autonomy and one’s day in court. The handling of mass disputes is more than just a matter of logistics as it raises controversial issues with regard to the extent to which restrictions on such fundamental rights are acceptable and justified.
Because the issue of collective redress requires a substantive switch to a new way of thinking, it assumes at the same time a substantive departure from the current fundamental notions and practices in the member states or at least adjustments to those notions and practices. Adjustments of that nature are a matter of culture and mentality and for that reason are not easily brought about through law. It is the people that make the law and not the other way around. It is essential to not underestimate the importance of ‘change management’, often an essential but an overlooked and underappreciated theme in the rule-making process at EU level.
Looking at the issue of collective redress from the angle of change management and the success factors that contribute to it produces new and valuable insights about the road that should be taken and that can deliver an outcome that has the support of all stakeholders within a realistic time period and is the product of their joint efforts. In the EU context this road will eventually lead to what I call ‘spontaneous harmonisation’. The proper role of the EU will be at the beginning to facilitate and to impose, only if parties do not succeed in co-operating and coming up with a joint solution.
Some years ago, two member states followed a similar road in a domestic environment with relation to another controversial issue in the field of civil procedure and civil dispute resolution: the handling of personal injury claims. The two member states are the
This private rule-making process can also be called ‘better regulation through mediation’, although this could be a bit confusing as ‘mediation’ relates here not to the substantive outcome of the private rule-making process but to the regulation of the process itself.
The road of private rule-making can be described as ‘bottom up’ rather than ‘top down’, ‘general’ rather than ‘fragmented’ and ‘gradual’ rather than ‘all at once’. The stakeholders could include, for example, the European Consumer’s Organisation, the confederation of European business BUSINESSEUROPE, judges from the European Court of Justice, experts on collective redress and dispute resolution and staff members from the European Commission (EC). Together they could form a collective redress task force which could engage in this private rule-making under the supervision of a mediator or process facilitator who enjoys the confidence of all stakeholders and who is viewed by all of them as capable, neutral and objective. For example, the establishment of the Dutch Code of Conduct was linked to an independent national platform headed by the mayor or
‘Bottom up’ refers to the fact that, at the end of the process, the outcome that results from the private rule-making process will have grassroots support because it is a product of the parties who have to apply and work with it and of the organisations concerned. ‘General’ means this process requires experts on civil procedure and dispute resolution, rather than experts in substantive fields of law such as consumer, antitrust or employment law. Collective redress is an issue of dispute resolution and may be applied in all substantive fields of law. Finally, gradual refers to the fact that both a realistic short-term and a more ambitious long-term action plan are established.
The bigger the change to be brought about and the more it entails a departure from existing practices, the greater the necessity to define both a short and a long-term plan, as described above. Opponents and proponents of collective redress agree that the effective handling of mass disputes requires a substantial departure from current practices and the adjustment of notions that are considered to be fundamental within Western societies. That is why any initiative on collective redress at EU level should start by defining a realistic short-term plan that has the potential to become ‘the law in action’ to be really effective.
The short-term plan should aim to identify and establish minimum requirements and best practice guidelines for the member states in relation to the handling of mass disputes, which respect the strong feelings of all the stakeholders. The plan should explain to member states what the central themes are and why they have to be considered, such as the appointment of specialised courts and judges, case management, the existence of specific funding arrangements for mass disputes, objective appointment rules for group counsel and so on.
It is important that the short-term plan gives member states choices, such as an opt-in versus an opt-out, while specifying what factors they need to consider in making the choices and why. An opt-in system requires, for example, adequate cost-sharing arrangements between the plaintiffs and the selection of a proper test case using proper selection techniques; an opt-out system requires at least rules providing for an adequate opt-out period, representation and notice.
The enhanced use of court-approved alternative dispute resolution mechanisms and the way they relate to collective redress should, considering the Dutch experiences, be added to the options too. The short-term plan could also focus on or be restricted to cross-border issues. This topic, which might look simple at first, is challenging enough in itself. The experiences in the
The EC could both facilitate this private rule-making process and encourage a certain degree of uniformity in the judicial handling of collective claims by courts in the various member states by providing an EU-level educational case management programme for the relevant specialised courts, as well as regular updates, where they can exchange views and experiences on procedural issues. Under the current or upcoming collective redress regimes of the member states, more can be achieved if the judiciary and lawyers are properly educated to case manage mass disputes. So investing in education of the specialised courts of the member states, for example through the establishment of the European equivalent of the US Manual for Complex Litigation, might be much more effective then introducing an extensive legal framework on collective redress in the usual way.
A positive side-effect of this approach would be that courts and practitioners in the various member states get time to internalise the new way of thinking that is needed for the resolution of mass disputes and the opportunity to gain European experience with their own collective redress schemes, to find out what works and what does not, and to become aware of the reasons for failure. Until they gain such experience, their knowledge will be based entirely on
The two EU commissioners, Neelie Kroes and Meglena Kuneva, have significant plans for collective redress and are determined. Insights provided by the literature on change management combined with the experience of two member states with private rule-making in the field of civil procedure and civil dispute resolution might offer valuable assistance in this process. Not all roads lead to
Ianika Tzankova is a senior associate in the mass claims litigation team at NautaDutilh in