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COFACE. A step in the right direction regarding collective redress. PRESS RELEASE 3/2/2012

On the 2nd of February, the EU Parliament approved the resolution on collective redress, urging the Commission to act. The document, along with the opinions of the ECON and IMCO committees, underlines the importance and need to set up a horizontal collective redress mechanism at EU level. COFACE welcomes the adoption of the resolution. All three documents acknowledge some fundamental points, stressing for instance that while many EU member states already have collective redress mechanisms in place, no abusive litigation cases were identified. Another element which has been positively identified is the crucial role of the courts in deciding for instance on the admissibility of the claim. Finally, we fully support the need for ADR and the benefits it can present for consumers in terms of costs and time, but wish to underline that ADR (especially for collective ADR) can only work if a legal recourse is possible.

At the same time, COFACE deplores that only opt-in was considered as a collective redress mechanism. Judges should also have the discretionary power to decide whether an action would best be served via opt-in or opt-out and therefore, both mechanisms should be made available in the law. Furthermore, in case of an opt-in procedure, the aim to mediatise sufficiently a claim in order to attract all consumers who have suffered damages without hindering a third party's reputation would be quite difficult and costly to put in place in practice, especially if the potential "victims" are hard to identify.

COFACE encourages the Commission to propose a legal instrument which would not only set up a collective redress framework at EU level dealing with EU law infringements but also to incite all EU member states to set up a collective redress mechanism in their own country, in full respect of their legal traditions and practices, but abiding by a set of core principles.

For more information, see COFACE's response to the consultation on collective redress

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