Parliament and Council agree: The European Class Action is coming
As long ago as in April 2018, the European Commission presented its idea of a European class action as part of the “New Deal for Consumers“. It arose not least from the impacts of the VW-emissions scandal and was intended to give consumers an additional tool to collectively assert their rights against companies. A political agreement was finally reached in June between the negotiators of the European Parliament and the Council on the content of a directive to implement this idea. The text of the draft directive has not yet been published (however, the draft adopted in the European Parliament’s first reading can be found here) but the key points are already known:
- In the future, “qualified entities” should be able to bring claims for compensation and injunction suits in form of class actions on behalf of consumers, thereby ensuring that they have access to justice. As such, in Austria, the Association for Consumer Information (VKI) and the Chamber of Labor come into consideration.
- Beyond that, the directive is also intended to create a place of jurisdiction in Austria for lawsuits against companies based outside Austria.
- The scope of application of this new class action will go far beyond general consumer law: violations in the areas of data protection, financial services, energy, telecommunication, environment and health, travel and tourism as well as in connection with air and rail travel can also be claimed.
- Concerning procedural costs, the unsuccessful party in such a collective procedure must bear the costs of the successful opposite party. If the defendant company wins, the procedural costs must be borne by the “qualified entity”.
- To protect companies from abusive lawsuits, courts should have the right to dismiss apparently unfounded cases as early as possible.
Next, the European Parliament and the European Council have to approve the directive. The Member States then have 24 months to transpose the directive into national law.
This article is only general information and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and accuracy of this contribution.
6. July 2020
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