A Comparative Analysis of the Mechanisms for Collective Redress in Europe and Australia

Abstract

The technological developments that led to mass production and globalisation also changed the law. As it is not uncommon for individuals to be harmed in identical or similar ways by mass-produced products and standardised corporate practices, mechanisms are needed to cope with these new situations. This has been reflected by the introduction of product liability laws around the world. In addition to substantive law being adjusted to these developments, entire legal systems must also be changed. Collective redress is the procedural counterpart that mirrors these changes in substantive law. Current procedural provisions were created in the light of two-party litigation and cannot cope with multi-party situations. Therefore, a mechanism of collective redress is being introduced globally. On 11 June 2013, the European Commission published a series of common, non-binding principles for collective redress mechanisms in European Union member states in the form of a Recommendation. Member states were invited to implement the principles set out in the Recommendation by 26 July 2015. Currently, the relatively new European mechanisms vary significantly, and although the broad rules of the Recommendation are unlikely to change this situation, the Recommendation aims to create a coherent approach in terms of collective redress. A comparison of the different regimes will uncover weaknesses and help to evaluate and improve the Recommendation. As the European Commission rejects ‘United States (US) style’ class actions for entrepreneurial litigation caused by contingency fees, punitive damages and the American rule of costs, Australia provides with their unavailability a great object of comparison. Having conducted class actions for almost 25 years, Australia can be regarded as one of the most developed countries—alongside the US and Canada—in relation to collective redress. A comparison of the existing mechanisms in Europe and Australia will provide an overview of how the major difficulties of class actions are handled, such as the rational apathy of claimants, free riders and the avoidance of unmeritorious claims. After introducing the topic in the first section of the thesis, the second section will analyse the existing mechanisms on the basis of national reports. The legal developments concerning collective redress will be analysed, and a summary of the current developments will be provided. Drawing upon the outcome of the second section, the third section will compare the similarities and differences between the various legal systems, and it will evaluate the different approaches by focusing on the major difficulties. The thesis will conclude with a recommendation based on the evaluation of the different approaches.