In this fifth alert in our series regarding the European Parliament’s formal endorsement of a new collective actions legislation titled the Directive of the European Parliament and of the Council on Representative Actions for the Protection of the Collective Interests of Consumers, we analyze what laws, and their alleged infringement, may give rise to collective redress suits in the EU once enforcement of the Directive begins in 2023. We also consider what companies may do between now and then to prepare.
What Laws Are Included in the Directive?
As we have previously discussed, the scope of the Directive is tied directly to preexisting laws and regulations in the EU. The Directive provides that it “should cover infringements of the provisions of Union law referred to in Annex I,” and that the Directive is to be “without prejudice to the legal acts listed in Annex I and therefore it should not change or extend the definitions laid down in those legal acts or replace any enforcement mechanism that those legal acts might contain.”
Annex I sets forth 66 laws in total, and is recreated at the end of this alert for ease of reference. The laws in Annex I cover a wide range of statutes regulating issues related to: medical devices; cosmetic products; travel by air, land and sea; product pricing; privacy and electronic communications; insurance and reinsurance; a myriad of consumer contracts; and more. Multiple laws identified in Annex I have the potential to affect any given trader doing business in the EU. Companies manufacturing or selling consumer products, entering into consumer contracts, or marketing in the EU are likely to fall under the umbrella of multiple regulations included in the Directive.
If a trader’s business is subject to any of the laws identified in Annex I, it may be possible for a qualified entity to file a collective redress action against the trader alleging infringement of consumer rights come 2023. In the interim, companies doing business in the EU should use Annex I of the Directive as a tool from which to analyze whether it is possible collective redress actions may become part of its business reality in Europe in the years to come. A look to the kinds of class actions and mass torts ongoing in the U.S. may suggest where qualified entities might look first for potential claims in the EU.
What Laws Are Excluded?
No laws are specifically excluded from potential collective redress actions by the Directive. The good news, however, is that those laws not specifically included in Annex I may be pragmatically considered excluded, since the Directive only applies to infringements of the laws listed in Annex I. Traders that are not subject to the 66 laws listed in Annex I may take greater comfort in the fact that they are less likely to face potential collective redress actions in the future than traders who are subject to one or more of these laws. Unfortunately, whether any traders may escape being subject to one of the 66 included laws and regulations is yet to be seen, but generally unlikely.
A word of caution: commencing a collective redress action may encourage qualified entity litigants to explore the breadth and reach of these existing laws, and perhaps even seek to apply them in ways previously unseen. The novelty of the Directive and its new forms of redress might inspire novel legal theories.
