Ladies and gentlemen,
Thank you to the American Chamber of Commerce for organising this event and for all the work conducted by the Institute of Legal Reform. You have been actively working on a subject which has been increasingly in the spotlight in Europe.
Just recently, Ryanair announced they would cancel 40-50 flights a day over the next six weeks, affecting an estimated 400,000 passengers.
The emissions scandal at Volkswagen affects 8 million car owners in Europe.
These are textbook mass harm situations.
Modern economic and social relations, including globalisation and e-commerce, can bring benefits but can also result in a growing number of mass harm situations.
Many affected persons seek redress because they are victims of the same or similar practices of traders.
However, consumers often give up on their justified claims because of the disproportionate cost and effort to pursue them.
Given the pan-European dimension of many mass harm situations, the weak(er) position of consumers undermines access to justice, people's trust and ultimately the proper functioning of the internal market.
EU consumer law is based on the idea that consumers are in a weaker position compared to traders, both when it comes to knowing their rights and in terms of bargaining power.
That is why consumer protection legislation is so important. And its proper enforcement is a must, as identified in the Commission's "Fitness Check" report earlier this year.
As President Juncker announced in his State of the Union speech, we will focus our efforts to deliver in early 2018 a 'New Deal for Consumers". It is a package aiming at updating consumer rights by making it fit for today's – in particular digital – reality, but also aiming at effective enforcement, both public enforcement by national consumer authorities and private enforcement.
In terms of public enforcement of consumer rights, we have already made significant progress through the new Consumer Protection Cooperation Regulation. It provides for better coordination and faster response in case of cross-border cases.
In terms of updating the existing consumer acquis we are building on the thorough Fitness Check of last year and we are looking into:
introducing EU-wide civil remedies for consumers who have been harmed by unfair commercial practices;
ensuring more proportionate, effective and dissuasive financial penalties for consumer law breaches;
more transparency of online contractual relations, especially when conducted through platforms;
simplification, for example by streamlining information requirements.
Regarding private enforcement, we will promote recourse to ADR/ODR as out-of-court dispute settlement procedures which are are less cost and time consuming compared to court proceedings. Traders can greatly benefit from engaging in the out-of-court procedure via the platform (the so called ODR) as it offers them a possibility to solve disputes that they cannot resolve in-house through their internal complaint handling systems.
In addition, we will look into the possibility to equip European consumers to defend themselves better in cases of mass harm. The car emissions case for instance is a mass harm case of an unprecedented scale that affects consumers, investors and companies in all EU countries alike.
And we should draw some lessons from it:
It demonstrates the inequalities and differences across the EU when it comes to consumer rights. In some - few - Member States the affected persons were able to bring their claim to justice jointly - whereas in the majority of EU countries consumers were left to their own devices.
And it shows that that without a clear, transparent and accessible system of collective redress, people turn to other ways to press their claim for compensation. This might open the way to abuse with potentially worse effects on both parties compared to a transparent system of collective redress in line with the Commission's 2013 Recommendation.
The survey "The Growth of Collective Redress in the EU" that the Institute for Legal Reform published in March 2017 seems to confirm this assessment. Furthermore, the survey which you have presented today shows clearly the sympathetic attitudes of consumers towards having access to justice, with strong safeguards in place.
It is obvious that an appropriate mechanism would bring benefits for all involved in a mass harm situation - both claimants and defendants.
Claimants will gain better access to justice and defendants will be protected against abusive litigation.
This autumn we will publish a Report on the practical implementation of the principles of the Recommendation.
The Recommendation summed up some principles of a European collective redress model. Many of its elements were present in the legal systems of a large part of EU countries, whereas the very concept of collective redress was not known to another, albeit smaller group of Member States.
Hence, the aim and impact of the Recommendation has been twofold: first, as a discussion on improving access to justice and the prevention of abusive litigation, and second as a concrete incentive to legislate on collective redress in the EU countries.
The Recommendation has been a valuable starting point in the discussion on access to Justice for consumers.
The Recommendation also provides a basis for further reflection on how some of the practical rules should be implemented, for example rules on the constitution of the claimant party or the financing of litigation.
The discussion in EU countries is in full swing on how to strike the right balance between access to justice and prevention of abuse.
The impact of the Recommendation in terms of fresh legislation in EU countries is much more modest.
The availability of collective redress mechanisms as well as safeguards against potential abuse of such mechanisms is still patchy across the EU.
Two EU Member States introduced new legislation following the Recommendation, Belgium and Lithuania. In Slovenia new legislation is pending, and a few other EU countries changed their legislation after 2013, France and the UK.
Other Member States are preparing new or updating existing legislation on collective redress (Germany, the Czech Republic and the Netherlands).
However, 9 EU countries do not provide for any possibility to claim compensation collectively in mass harm situations as defined by the Recommendation.
So the picture for consumers is still very different from one country to another.
Our aim is to have legislation in place that effectively protects consumers everywhere in the EU, in line with the spirit of the Recommendation.
The Injunctions Directive, which was part of the assessment under the consumer REFIT, opens an interesting avenue for consumers through representative action by non-profit organisations or public authorities.
The Injunctions Directive enables consumers to swiftly stop abusive practices with the help of organisations representing them.
We are assessing how to enhance the effectiveness of the Injunctions Directive in the spirit of groups acting against mass harm.
The results of the Fitness Check show that the Injunctions Directive has a decisive role in protecting consumers' collective interests, enabling consumer protection organisations or public bodies to quickly stop breaches of EU consumer protection rules.
However, the injunction procedure is not without flaws and not used to its full potential.
It does not cover all relevant EU consumer protection legislation, and costs related to the preparation of the case and court or administrative fees in injunction proceedings are too high for underfunded consumer organisations.
The length of the injunctions procedure is an issue especially in case of so-called "short-lived" infringements like an advertisement that is only featured for a few days.
There is clear scope of improving this Directive. We want a more effective procedure for stopping traders from infringing EU consumer protection rules. And we want to facilitate redress for the damages consumers suffer, in particular when they affect large numbers of people across the EU.
I have given you a quick overview on the public and private enforcement mechanisms we are currently looking into. We will report on the 2013 Recommendation on collective redress and will then built our package for the new deal for consumers.
Your feedback and input is obviously most welcome.