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New Frontiers of Consumer Protection

The Interplay between Private and Public Enforcement

Edited by Fabrizio Cafaggi and Hans-W. Micklitz

Intersentiq, 2009

 

F. Cafaggi & H. Micklitz (eds.), New Frontiers of Consumer ProtectionCollective redress has gained momentum in Europe and North America. Legal reforms are driven by different institutional conditions but show a limited degree of convergence.

The seventeen contributions from the US, Canada and from the Member States of the European Union (East and West) put the interplay of public enforcement and private collective judicial enforcement into perspective.

The parameters of analysis are the constitutional dimension (i.e. three multi-level systems compared US, EC and Canada, vertically: allocation of powers between levels and distinction between regulation and private law and administrative control versus judicial control, horizontally: degree of harmonisation, transborder litigation, choice of law), the institutional dimension (the players, regulatory and judges, private organisation and lawyers) and the substantive dimension (regulation through administrative law versus regulation through tort or contract law, standard setting (strict liability versus negligence), remedies (injunctions and damages).  

These three parameters are then broken down into five sections: general comparison, the public/private enforcement divide, remedies concerning the distinction between injunction and damages as well as between class actions and group actions, negotiation and adjudication, transborder litigation and international private law. The final chapter develops prospects to indicate the way ahead.

 

Table of Contents


Introduction  
(Fabrizio Cafaggi and Hans-W. Micklitz)

1. The frame

2. The questions

3. Public/private enforcement in a multi-level structure – The US, Canada and Europe compared

4. The transatlantic scenario – the regulatory role of aggregate litigation in North America and its institutional pre-conditions

5. Adjudication and transborder litigation in North America and the EU

6. Purpose and content of this book

PART I. COMPARATIVE INSTITUTIONAL ANALYSIS


  

The Institutional Dimension of Consumer Protection 
(Samuel Issacharoff and Ian Samuel)

Introduction

1. The Typology

2. Institutions and Private Enforcement 

 

Public and Private Enforcement in Consuer Protection: General Comparison EU-USA (Jules Stuyck)

Introduction

1. The EU Constitutional Framework for Enforcement of Consumer Rights

1.1. EU Competence and Its Limits

1.2. The Autonomy of the Member States in the Field of Remedies and Its Limits

1.3. The Lack of Horizontal Direct Eff ect of EU (Consumer) Directives

1.4. Conclusion

2. Individual and Collective Redress for Consumers in the Member States: The Public-Private Enforcement Divide and Mix

2.1. Consumer Law as Part of Private or Public Law

2.2. Public or Private Enforcement or Public and Private Enforcement?

A. General Discussion

B. The Injunctions Directive

C. The Administrative Cooperation Regulation

D. Conclusion

2.3. Collective Actions for Damages: Comparison with US Class Actions

3. Claims for Damages in the Case of Infringement of the EC Antitrust Rules

4. A Case for Community Legislation? Th e Diffi culties of Multinatonal Litigation of Collective Action

General Conclusion 

 

 

Public and Private Enforcement of Consumer Law in Central and Eastern Europe: Institutional Choice in the Shadow of EU Enlargement
(Antonina Bakardjieva Engelbrekt)

1. Introduction

2. Analytical Approach

3. The Evolution of Consumer Protection Law and Policy in CEE Countries

3.1. The Constitutional Setting

3.2. Consumer Protection by Conditionality

4. Institutional Choice and Design

4.1. Administrative Enforcement

A. Institutional Design

B. Ex Post v. Ex Ante

C. Individual v. Collective Interests

D. Injunctions v. Penalties

E. Why Public Enforcement?

F. What Advantages Are Th ere with Public Enforcement? Th e Costs and Benefi ts of Participation

4.2. Judicial Collective Enforcement

A. Injunctions v. Damages

B. Institutional Actors: Consumer Organisations and Lawyers

C. The Problem of Confused Incentives: Converting Private Vice into Public Virtue?

D. The Judiciary as a Decision-Making Process

4.3. Novel Forms of Consumer Participation and Representation

A. Abstract Control of Legality

B. State Liability

C. Cooperative v. Bifurcated Strategies

D. Individual Consumers as Avengers of Collective Interests

E. European Judicial Governance: Another Forum for Consumer Voice?

5. The Role of Enlargement Revisited

6. Conclusion

 

PART II. PUBLIC AND PRIVATE ENFORCEMENT IN CONSUMER PROTECTION


 

An Institutional Perspective on the Regulation of Productis in the United States (Catherine M. Sharkey)

Introduction

1. Theoretical Considerations

1.1. Common Law Liability versus Safety Regulation

1.2. State versus Federal Regulation

2. Institutional Considerations

Conclusion

 

Developing Approaches to Public and Private Enforcement in England and Wales (Christopher Hodges)

1. Private Law Claims

2. Compensation Schemes

3. Powers of Public Authorities and Consumer Bodies

3.1. Compensation Orders in Criminal Proceedings

3.2. Specific Powers on Restitution

3.3. Enforcement of EU Consumer Protection Law

3.4. Competition Law Mechanisms

4. Developing Linkages Between Consumer, Competition and Economic Policy

5. A Revolutionary Policy Linking Enforcement and Redress Policies

6. An Unfinished Story: Scope for a Unified Approach?

 

Taking the Collective Interest of Consumers Seriously: A View from Poland
(Marek Safjan, Lukasz Gorywoda and Agnieszka Janczuk)

1. Introduction

2. Collective Interest of Consumers and Its Functions

2.1. Collective Interest of Consumers as a Procedural Instrumen

2.2. Possible Approaches to Building a Definition of the Collective Interest of Consumers

2.3. An Attempt to Build a Definition

A. Compensation and Deterrence Perspective

B. The Role of Individual Interest

C. Towards a Positive Definition

D. A Proposal for the Definition

3. Public Interest and Consumer Protection in Poland

3.1. The Period of Socialism

3.2. After the Transformation

3.3. The Current State of Play

4. Conclusions

 

Efficiency of the Protection of Collective Interests: Judicial and Administrative Enforcement in the Czech Republic 
(Luboš Tichý and Jan Balarin)

1. Introduction

1.1. Topic and Purpose

1.2. Methodology. Defi nitions and Notions

2. Procedural Protection of Collective Interests

2.1. Developments of Collective Litigation

A. Beginning

B. Civil Procedural Law

2.2. Administrative Protection

2.3. Adhesion Procedure Within Administrative and Criminal Procedure

2.4. Diff erences Within the Procedural Modes of Protection

2.5. Institutional Background

A. Consumer Organisations

B. Public Bodies

2.6. Effi ciency of Protection

2.7. Protection Ex Post, Ex Ante

3. Analysis of the Regulation of Judicial Enforcement

3.1. Community Action

3.2. Class Action

3.3. Negative Consequences of Class Action

4. Practical Experience

4.1. Actions of Consumer Organisations

4.2. Motions to Administrative Bodies

4.3. Conclusion

5. Overcoming the Individual Protection Pattern, Critique of Positive Law and the Collective Action De Lege Lata

5.1. Importance of the Civil Procedure Code Provisions

5.2. Collective Actions and Public Interest

5.3. Abstract Control, Public Interest and Consumer Rights

5.4. Duties of Public Bodies and Th eir Relation to the Parties

5.5. Principle of Party Presentation and Offi ciality Principle

5.6. Human Rights Aspects: Is It an Academic or a Political Debate or Both?

A. Opt-In, Opt-Out

B. Informing the Aggrieved Consumers

C. Res Judicata

D. Participation in Proceedings

5.7. Solution De Lege Lata

6. Administrative Enforcement

6.1. Status of Consumer Organisations at the Regulatory Authorities

6.2. Indirect and Direct Enforcement, Abstract and Concrete Control

6.3. Regulatory Authorities and Further Perspectives

7. Unlimited Protection of Collective Interests – A Model for Europe? Conclusion

7.1. State of Judicial Enforcement

7.2. Neglect of Public Interest and Importance of Private Initiative

7.3. Collective Action Solution De Lege Lata

7.4. Administrative Protection – A Guarantee?

7.5. Post-Communist Revival of Public Interest

 

Public and Private Enforcement in Consumer Protection - A Dutch Perspective
(Ewoud Hondius)

1. Introduction

2. Consumer Complaints and Access to Justice

3. Complaints Boards

4. Small Claims Procedures

5. Collective Action

6. Mass Damage Transactions

6.1. The DES Case

6.2. The Dexia Case

6.3. Shell Hydrocarbon Reserves

6.4. Doctrinal Comments

7. Public Enforcement

8. Conclusions

 

PART III. COMPARING REMEDIES IN PRIVATE ENFORCEMENT


 

 

Compensation and Deterrence in Consumer Class Actions in the United States and Europe (Geoffrey P. Miller)

1. The Goals of Compensation and Deterrence in Consumer Law

2. Compensation and Deterrence Under US Law

2.1. Substantive Remedies

A. Federal Law

B. State Law

2.2. Small Claims Cases

2.3. Limitations on the Class Action Remedy

3. Compensation and Deterrence in European Class Action Law

Conclusion

 

 

 

The Reform of Directive 98/27/EC 
(Cristina Poncibò)

1. Setting the Scene

1.1. The Collective Interests of the Consumers

1.2. The “Collective Damage”

1.3. The Limits of the Injunctions Directive

1.4. A Lack of Courage: The Issue of Standing

2. The Reform of the Injunctions Directive: Enlarging Associational Standing?

2.1. Developments in EC Competition Law

2.2. National Experimentation: Article 140-bis of the Consumer Code

2.3. Consumer Associations and Lawyers

3. An Impact Assessment of the Reform.

3.1. Empowering the Consumer-Citizen

3.2. The Evolution of the Consumer Movement

4. Conclusions

 

 

 

Group Actions as a Remedy to Enforce Consumer Interests
(Astrid Stadler)

1. Introduction

2. Mass Litigation and Small Damage Cases

3. Collective Redress for Damages: How to Cope with Mass Litigation

3.1. Mass Claim Situations in Europe

3.2. US-Style Class Actions as a Role Model for Europe?

3.3. Test Case Proceedings

4. Group Actions

4.1. Justification of Group Actions

A. Procedural Economy and Justice

B. Access to Court and Market Regulatory Function of Group Actions

4.2. Constitutional Rights of Group Members: Opt-In or Opt-Out?

4.3. Selection of the Appropriate Group Plaintiff

A. Group Plaintiff Assigned by the Group Members

B. “First Come, First Serve” Principle or Appointment of the Group Plaintiff by the Court

4.4. Objective and Basic Procedural Structure of Group Actions

4.5. Case Management and Participation of Group Members

5. Group Actions and Small Damage Cases

6. Conclusion

 

 

 

Collective Consumer Redress Reform - Will It Be a Paper Tiger? 
(Geraint Howells)

1. Introduction

2. Class Action, Group Actions and Representative Procedures

3. Current Law

4. Reform

5. Key Features of the New Regime

5.1. Scope

5.2. Opt-In or Opt-Out

5.3. Who Can Bring an Action?

5.4. Incentives

6. Conclusion

 

 

 

Negotiation and Adjudication. Class Actions and Arbitration Clauses in Consumer Contracts  (Norbert Reich )

1. A New Interest in the Class-Action Device in Member Countries and the EU

2. US Experiences

3. Canadian Experiences

4. Applicable EU and Member State Law

4.1. Claro Revisited: Ordre Public also Against an “Arbitration Defence Clause”?

4.2. The Importance of Brussels Regulation 44/2001 for Consumer Arbitration

4.3. Collective Actions Based in Tort

5. Conclusion

 

 

PART IV. TRANSBORDER LITIGATION AND INTERNATIONAL PRIVATE LAW


 

 

Transborder Litigation and Private International Law: The View from Canada
(Geneviève Saumier)

1. Introduction to the Private International Law Challenges to the Transborder Consumer Class Action

2. Jurisdictional Issues for Transborder Consumer Class Actions

3. Multiple Competent Courts, Forum Non Conveniens and Consolidation: the Canadian Experience

4. Choice of Law, Diverse Legal Traditions and Transborder Class Actions

5. Conclusion

 

 

 

Cross-Border Collective Damage Actions in the EU
(Peter Rott)

1. Introduction

2. Jurisdiction

2.1. Scope of Application of the Regulation

2.2. Available Courts

A. The Member State Where the Defendant is Domiciled

B. The Special Jurisdiction for Consumer Contracts

C. Special Jurisdictions in Contract and Tort Law Cases

D. An Additional Jurisdiction by Way of Joining?

3. Procedural and Substantive Limitations of the Various Collective Actions

3.1. Legal Standing

A. Collective Actions Brought by Representatives

B. Collective Actions Brought by Consumers Themselves

3.2. Substantive Legitimacy to Bring the Claim (Aktivlegitimation)

3.3. A Limited “Collective Interest of Consumers” and Other Disincentives

3.4. Limitations as to the Type of Claims that are Eligible for Collective Actions

3.5. Discretion as to the Joining or Admittance of Individual Claims

4. Private International Law

4.1. Contract Law Cases

A. Consumer Contracts

B. Other Contracts

C. Representative Actions

4.2. Tort Law Cases

4.3. Conclusion

5. Summing Up – The Situation in the EC

6. Looking Beyond the EC Borders

6.1. Service of the Claim

6.2. Recognition and Enforcement of Class Action Judgments

A. Punitive Damages and Treble Damages

B. Legislative Activities

7. Outlook

 

 

PART V. CONCLUSION


 

Administrative and Judicial Enforcement in Consumer Protection: The Way Forward (Fabrizio Cafaggi and Hans-W. Micklitz)

1. The Relationship Between Administrative and Judicial Enforcement in Consumer Protection: The Way Ahead

2. Administrative and/or Judicial Co-Operation in Europe

2.1. Actions for Injunction

A. Shift from Judicial Collective Enforcement to Administrative Co-Operation?

B. The European Minimum Standard – Action of Injunctions

2.2. European Group Actions and American Class Actions

2.3. Three Models of Group Actions in 27 Member States

A. The Search for the Perfect European Model

B. The Key Role of Consumer Associations

C. Collective Consumer Actions in New Democracies

2.4. Regulating Entry and Exit. Comparing Ex Ante and Ex Post Intervention

A. Consumer Organisations

B. Self or Ad Hoc Organisations

C. Administrative Agencies

D. Lead Plaintiffs and Lawyers in Tandem

3. Reframing the European Debate in the Light of the US and Canadian Experiences

3.1. The Constitutional Balance Between Collective and Individual Redress in Light of the Debate Between Public and Private Enforcement

3.2. Administrative and Judicial Enforcement

3.3. Injunctions and Pecuniary Remedies

3.4. The ‘Indirect’ Eff ects of National Legislation Concerning Group Actions on Substantive Consumer Law

3.5. The Players

3.6 The Role for European Governance to Foster Effective Aggregate Litigation in Consumer Law

4. Concluding Remarks

 

Page last updated on 09 September 2019

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