PP 11-06
April 2011
European household appliance manufacturers’ response to the Commission
public consultation on a Coherent European Approach to Collective Redress
CECED, the European Committee of Domestic Appliance Manufacturers, thanks the European
Commission for launching a new public consultation on collective redress. Household appliance
manufacturers welcome the efforts to ensure follow-up to a Commission initiative that started
with the Green Paper on consumer collective redress issued in 2008.
CECED therefore takes this opportunity to submit its views on how collective redress shall be
comprehended in the European Union.
CECED responses to questions
Q1 What added value would the introduction of new mechanisms of collective redress
(injunctive and/or compensatory) have for the enforcement of EU law?
The introduction of new collective redress mechanisms, of private enforcement, would not bring
any added value as private enforcement responds to a different goal than public enforcement:
compensation versus compliance and deterrence.
Further, cross-border dimension is often referred to as one of the reasons justifying action at
European level. Yet, most claims have a national nature rather than cross-border. It is thus
questionable whether EU action is required at all.
Finally, in its response to Commission Green Paper on consumer collective redress in 2008
CECED had underlined the existence of various collective redress mechanisms which respond to
the different legal traditions and judicial systems of the EU Member States. Even if these
mechanisms can vary significantly from one Member State to another in terms of procedures and
available tools, such diversity does not necessarily entail an unsatisfactory level of redress. In
most cases, they offer adequate redress to their users.
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CECED represents the household appliance industry in Europe. Its member companies employ over 200,000 people, are mainly based in Europe,
and have a turnover of about €40 billion. If upstream and downstream business is taken together, the sector employs over 500,000 people.
Direct Members are Arçelik, Ariston Thermo Group, BSH Bosch und Siemens Hausgeräte GmbH, Candy Group, Daïkin Europe, De’Longhi, AB
Electrolux, Fagor Group, Gorenje d.d., Indesit Company, Liebherr Hausgeräte, Miele & Cie. GmbH & Co., Philips D.A.P., Groupe SEB and
Whirlpool Europe.
CECED’s member associations cover the following countries: Austria, Belgium, the Czech Republic, Denmark, Estonia, France, Germany,
Greece, Hungary, Italy, Latvia, Lithuania, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spain, Sweden, Switzerland, Turkey
and the United Kingdom.
For more information: www.ceced.eu
Email: [email protected]
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Q2 Should private collective redress be independent of, complementary to, or subsidiary to
enforcement by public bodies? Is there need for coordination between private collective redress
and public enforcement? If yes, how can this coordination be achieved? In your view, are
there examples in the Member States or in third countries that you consider particularly
instructive for any possible EU initiative?
There shall be a clear separation between private and public enforcement since they respond to
different preoccupations. Addressing private enforcement would be wrong as private actions only
seek to provide a remedy for compensation. Similarly, EU lawmakers shall ensure that
defendants are not subject to public and private enforcement at the same time.
Public enforcement has always been the main tool for a fair enforcement of EU law. The priority
shall thus remain on how to ensure an effective enforcement by public entities so that both
citizens and businesses are appropriately protected.
Q3 Should the EU strengthen the role of national public bodies and/or private representative
organisations in the enforcement of EU law? If so, how and in which areas should this be
done?
Appropriate enforcement of EU law can only be achieved thanks to public entities, be it at
European or local level. Public authorities have the experience, expertise, adequate and already
implemented structures to strengthen these rights.
Q4 What in your opinion is required for an action at European level on collective redress
(injunctive and/or compensatory) to conform with the principles of EU law, e.g. those of
subsidiarity, proportionality and effectiveness? Would your answer vary depending on the area
in which action is taken?
As mentioned in question 1, CECED believes that existing mechanisms at national level although still perfectible – can prove efficient for citizens and businesses alike. Moreover the
added value of introducing collective redress at European level has not been proven. Also, we
consider that without a thorough assessment first, it is too early to answer such question.
Q5 Would it be sufficient to extend the scope of the existing EU rules on collective injunctive
relief to other areas; or would it be appropriate to introduce mechanisms of collective
compensatory redress at EU level?
It has to be noted that the Injunction Directive has been inconstantly used since it entered into
force on 19 May 1998. CECED advocates that the Commission evaluates first the effectiveness
of this mechanism and then considers whether enlarging its scope to other areas is the right route
to follow.
With regard to collective compensatory redress, we oppose the introduction of additional
mechanisms for compensation, be it a global one or several adapted to the diverse areas of EU
law.
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Q6 Would possible EU action require a legally binding approach or a non-binding approach
(such as a set of good practices guidance)? How do you see the respective benefits or risks of
each approach? Would your answer vary depending on the area in which action is taken?
Subsidiarity and proportionality are key principles which must be kept in mind when thinking
about the added value EU action in the collective redress area could bring to EU law. National
law regimes, exceptions and traditions are fundamental aspects to be respected. For instance,
creating a mechanism whose aim is to harmonise national collective redress schemes would
remove the flexibility required to adapt to Member States' legal specificities.
CECED does not support the introduction of new binding instruments as we believe the evidence
to justify such action at EU level is factually poor. The introduction of a binding EU collective
redress scheme does not appear to be the appropriate solution to address issues of law
enforcement, even cross-border claims as mentioned in our answer to question 1.
If any action were to be taken, CECED would favour the introduction of a set of good practices
guidance. Such tool could benefit both consumers and businesses in so that it could encompass
for instance basic information on existing schemes, exchange of Member States' best practices,
common core principles/standards. There are pros and cons as to a non-binding instrument. As
guidance, it is important it keeps its flexible and informative features. However it is quite as
much essential to ensure that some principles are commonly accepted and can be referred to in all
Member States: loser pay rule, prohibition of contingency fees and of third-party funding, etc.
Q7 Do you agree that any possible EU initiative on collective redress (injunctive and/or
compensatory) should comply with a set of common principles established at EU level? What
should these principles be? To which principle would you attach special significance?
As explained in the previous question, CECED is not in favour of a EU collective redress scheme
but acknowledges the need for a set of principles common to all Member States that would
guarantee fairness in actions and that beneficiaries of existing collective redress mechanisms
could mention in order to obtain appropriate redress. Some basic principles to be enshrined would
be (please consider the list as non-exhaustive):
- Collective redress should be sought through out-of-court collective redress mechanisms.
- Public authorities shall make sure that defendants are not imposed any penalties as
remedial action and pay damages on top, i.e. are not subject to public and private
enforcements at the same time.
- Criteria on how and which claims and claimants can be accepted should be defined
beforehand and agreed upon between Member States public bodies.
- Set out ethics rules/rules of conduct for representative entities.
- Opt-in should be regulated while opt-out should not be allowed.
- Contingency fees, third party funding and any other fee depending on the outcome of the
action shall be prohibited.
- Principles on how compensation shall be granted should be determined in order to avoid
abusive behaviours.
- The “loser pays” rule must always apply.
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Q8 As cited above, a number of Member States have adopted initiatives in the area of collective
redress. Could the experience gained so far by the Member States contribute to formulating a
European set of principles?
Experience gained by Member States who have a collective redress scheme is very important and
useful to exploit. Member States could benefit from mutual experience and best practices sharing,
which could in the end lead to the elaboration of a guidance document including common
principles (please see CECED responses to questions 6 & 7).
However, CECED does not support an initiative which comes down to an approximation of
national collective redress mechanisms. It is not recommended nor does it appear realistic to
harmonise or even approximate Member States' legal traditions. It is rather essential that the
specificities of their legal orders be preserved.
Q9 Are there specific features of any possible EU initiative that, in your opinion, are necessary
to ensure effective access to justice while taking due account of the EU legal tradition and the
legal orders of the 27 Member States?
Effective access to justice equals to cost efficient, rapid, user friendly, simple and clear-cut means
of redress. In our opinion, out-of-court collective redress mechanisms rather than judicial
mechanisms can offer such effective access to justice. That is why CECED is not in favour of the
creation of an EU collective redress mechanism. It is more advisable to extend existing
recommendations and schemes both at European and national level rather than introducing new
instruments.
Effective access to justice also goes through raising awareness on existing mechanisms. In
particular, consumer information and education programmes could be developed to bring the
existence of European consumer networks to as wide an audience as possible.
Q10 Are you aware of specific good practices in the area of collective redress in one or more
Member States that could serve as inspiration from which the EU/other Member States could
learn? Please explain why you consider these practices as particular valuable. Are there on the
other hand national practices that have posed problems and how have/could these problems be
overcome?
Experience, chiefly collected in the Nordic countries, shows that some mechanisms offer quick
and simple access to compensation at minimal cost to the claimants. The role of the ombudsman
and consumer complaint boards in different sectors is widely recognised as providing effective
redress.
Generally speaking, Alternative Dispute Resolution (ADR) mechanisms are successful in most
countries where such scheme has been implemented. As out-of-court mechanisms, they guarantee
straightforward, flexible, inexpensive and easy redress to their users. And there is clearly room
for improving their effectiveness.
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Q11 In your view, what would be the defining features of an efficient and effective system of
collective redress? Are there specific features that need to be present if the collective redress
mechanism would be open for SMEs?
CECED believes that out-of-court mechanisms contain the right features to ensure appropriate
and efficient redress to its users. Please refer to CECED responses to last two previous questions.
Features of ADR mechanisms are especially useful for SMEs which cannot afford lengthy,
expensive and complex procedures, characteristic features of judicial redress mechanisms.
Q12 How can effective redress be obtained, while avoiding lengthy and costly litigation?
Please see responses to questions 9 to 11.
Q13 How, when and by whom should victims of EU law infringements be informed about the
possibilities to bring a collective (injunctive and/or compensatory) claim or to join an existing
lawsuit? What would be the most efficient means to make sure that a maximum of victims are
informed, in particular when victims are domiciled in several Member States?
There is no doubt that the right to information further to law infringement is crucial and needs to
be ensured for victims. However some aspects must be taken into account such as the reputation
of the defendant. It is a delicate issue that may require a consultation between stakeholders:
consumers, businesses, European institutions, national/local authorities and representative entities
that bring collective redress action.
Q14 How the efficient representation of victims could be best achieved, in particular in crossborder situations? How could cooperation between different representative entities be
facilitated, in particular in cross-border cases?
Firstly, representatives of victims shall meet a core set of criteria in order to obtain accreditation
to represent interests of victims: official recognition by and registration in Member States,
abidance to a code of ethics, independence, impartiality, no personal interest - financial in
particular - in representing claimants, etc. These criteria should apply in all Member States to
safeguard equity in seeking redress.
CECED believes that efficient representation of victims can only be fulfilled through public
bodies as they act in and defend the public interest, and they embody neutrality. In addition,
given the long experience of public entities in law enforcement, cooperation between them in
cross-border cases is more likely to prove effective than with private entities. Cooperation could
be emphasised with the establishment of a set of good practices and common principles.
Q15 Apart from a judicial mechanism, which other incentives would be necessary to promote
recourse to ADR in situations of multiple claims?
As previously stated, ADRs present some advantages compared with judicial redress
mechanisms. ADRs as such are incentive not to resort to judicial collective redress which is
synonym of complex, lengthy and costly procedures.
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They offer straightforward, flexible, inexpensive and easy redress to their users. Besides, there is
room for improvement in their effectiveness.
Lastly, raising awareness about the advantages of ADRs is fundamental. But so is encouraging
stakeholders to use such scheme; not only consumers but businesses too. One option could be to
support and incentivise the development of self-regulatory measures for business complaint
handling.
Q16 Should an attempt to resolve a dispute via collective consensual dispute resolution be a
mandatory step in connection with a collective court case for compensation?
The nature of ADRs is fundamentally different from that of collective judicial redress
mechanisms. ADRs are a means of redress that can be chosen on a voluntary basis. It would
appear inconsistent to make it a mandatory first step in connection with collective judicial
redress. Moreover, it is of great importance that victims of law infringement are entitled free
choice when they go for redress mechanisms. Imposing ADR as a first step could be seen as
trivial step by claimants and make it less appealing in general terms.
Q17 How can the fairness of the outcome of a collective consensual dispute resolution best be
guaranteed? Should the courts exercise such fairness control?
In our view, fairness control should be of Member States’ responsibility. Collective consensual
dispute resolution allows users to come to effective redress short of litigation. Courts shall not
interfere in a case dealt in out-of-court settlement.
It is important to leave Member States’ authorities the full discretion to determine according to
which principles and through which means they intend to ensure fairness and due process for
businesses and for consumers. As a matter of fact, some Member States have already set some
guiding principles to guarantee fairness of claims. Again, cooperation amongst Member States
would prove useful. Those Member States which have not defined any set of good practice
guidance could use the experience of other countries to develop their own and thus guarantee a
higher level of fairness of the outcome of a collective consensual dispute resolution.
Q18 Should it be possible to make the outcome of a collective consensual dispute resolution
binding on the participating parties also in cases which are currently not covered by Directive
2008/52/EC on certain aspects of mediation in civil and commercial matters?
The very nature of collective consensual dispute resolution schemes is against any obligation to
bound parties to an action. The voluntary and flexible aspects are the reasons of their success and
accordingly must be preserved.
Q19 Are there any other issues with regard to collective consensual dispute resolution that
need to be ensured for effective access to justice?
CECED views on this point are already reported in its responses to questions 9, 10 & 11.
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Q20 How could the legitimate interests of all parties adequately be safeguarded in (injunctive
and/or compensatory) collective redress actions? Which safeguards existing in Member States
or in third countries do you consider as particularly successful in limiting abusive litigation?
Please refer to CECED response to question 7.
Q21 Should the "loser pays" principle apply to (injunctive and/or compensatory) collective
actions in the EU? Are there circumstances which in your view would justify exceptions to this
principle? If so, should those exceptions rigorously be circumscribed by law or should they be
left to case-by-case assessment by the courts, possibly within the framework of a general legal
provision?
The “loser pays” rule shall apply to any collective redress action, without exception. It is an
crucial defence against any abusive and unmeritorious claim. CECED strongly urges the
European Commission to reject any system that would create profit incentives from litigation.
Q22 Who should be allowed to bring a collective redress action? Should the right to bring a
collective redress action be reserved for certain entities? If so, what are the criteria to be
fulfilled by such entities? Please mention if your reply varies depending on the kind of
collective redress mechanism and on the kind of victims (e.g. consumers or SMEs).
As explained in response to question 14, representatives of victims shall meet a core set of
criteria in order to obtain accreditation to represent interests of victims: official recognition by
and registration in Member States, abidance to a code of ethics, independence, impartiality, no
personal interest - financial in particular - in representing claimants, etc. These criteria should
apply in all Member States to safeguard equity in seeking redress.
Q23 What role should be given to the judge in collective redress proceedings? Where
representative entities are entitled to bring a claim, should these entities be recognised as
representative entities by a competent government body or should this issue be left to a case-bycase assessment by the courts?
All these aspects shall fall under the remit of public authorities of each Member State.
Q24 Which other safeguards should be incorporated in any possible European initiative on
collective redress?
The principles listed by CECED in question 7 shall be erected as safeguards against claims and
actions whose primary aim is not the search for appropriate redress and law enforcement. Most
critical points to be addressed are:
- Ensure ethics, impartiality and neutrality of representatives of claimants.
- “Loser pays” rule applies to all collective redress actions.
- Prohibition of contingency fees.
- Set up strict litigation financing rules: prohibition of third party “pre-financing” of
litigation and no third-party funding as a general rule.
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These safeguards shall be incorporated to avoid the pitfalls and potential abuse of litigations
purely led by a financial interest of intermediaries. There is genuine concern that this could pave
the way for establishing a litigation industry where actions are funded by law firms and other
intermediaries with the aim of making profits from damages claims.
Q25 How could funding for collective redress actions (injunctive and/or compensatory) be
arranged in an appropriate manner, in particular in view of the need to avoid abusive
litigation?
Funding shall remain under the control of public authorities in order to avoid circumventing and
abusive behaviours.
Q26 Are non-public solutions of financing (such as third party funding or legal costs
insurance) conceivable which would ensure the right balance between guaranteeing access to
justice and avoiding any abuse of procedure?
CECED is opposed to any type of third-party funding. This “solution” would attract alien entities
to a case whose sole aim is to make profits from damages claims. Non-public solutions for
financing shall be proscribed to guarantee integrity in dispute settlement. As mentioned above,
we trust that public authorities in Member States shall control the financial aspect in claims.
Q27 Should representative entities bringing collective redress actions be able to recover the
costs of proceedings, including their administrative costs, from the losing party? Alternatively,
are there other means to cover the costs of representative entities?
Representative entities shall be bound by a set of criteria which permits verifying that they are
not driven by lucrative and personal interests. With regard to the coverage of expenses linked
with representation of claimants, funding solutions should be sought within Member States
authorities.
Q28 Are there any further issues regarding funding of collective redress that should be
considered to ensure effective access to justice?
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Q29 Are there to your knowledge examples of specific cross-border problems in the practical
application of the jurisdiction, recognition or enforcement of judgements? What consequences
did these problems have and what counter-strategies were ultimately found?
CECED has no particular examples to provide here. In the context of cross-border collective
redress, we concede that some approximation on national rules governing the functioning of
ADRs might be advisable to simplify the procedure and ease contacts between the different
entities bringing actions.
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Q30 Are special rules on jurisdiction, recognition, enforcement of judgments and /or
applicable law required with regard to collective redress to ensure effective enforcement of EU
law across the EU?
We do not see any need for special rules, in particular if this implies resorting to private
enforcement. Enforcement of EU law is effectively operated by public bodies and shall remain
under their control.
Q31 Do you see a need for any other special rules with regard to collective redress in crossborder situations, for example for collective consensual dispute resolution or for infringements
of EU legislation by online providers for goods and services?
Cross-border cases do not require particular rules. They shall be regulated by same rules than
national cases. As stated in our responses to questions 14 & 29, cross-border claims may be
addressed more efficiently via further cooperation between authorities of Member States
(establishment of a set of good practices, guiding principles) and/or via approximation of national
rules governing the functioning of ADRs.
Q32 Are there any other common principles which should be added by the EU?
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Q33 Should the Commission's work on compensatory collective redress be extended to other
areas of EU law besides competition and consumer protection? If so, to which ones? Are there
specificities of these areas that would need to be taken into account?
Nothing justifies the development of additional EU rules to collective redress in general or in
specific areas of EU law. Priority should be given to strengthening existing tools. Furthermore,
before adopting any policy option, it is of utmost importance that in the first instance the
European Commission duly undertakes a full and thorough impact assessment in the light of the
principles of subsidiarity and proportionality.
Q34 Should any possible EU initiative on collective redress be of general scope, or would it be
more appropriate to consider initiatives in specific policy fields?
As stated repeatedly, we see no reason to encourage a new EU initiative with regard to collective
redress. Instead, it is appropriate to focus on available tools, exchanging best practices and
developing cooperation between public bodies which stand guarantor for an adequate use of
collective redress mechanisms and effective enforcement of EU law.
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