EU Parliament approves directive on collective redress

On November 24, 2020, the European Parliament approved the new directive on representative measures to protect the collective interests of consumers (the “Collective Redress Directive”). The Collective Redress Directive requires all EU Member States to put in place at least one effective procedural mechanism to enable qualified entities to bring representative actions to court for injunction or appeal. The directive on collective redress was presented by the European Commission in April 2018 and is part of the European Commission’s New Deal for Consumers. The collective redress directive was proposed in response to several scandals related to violations of consumer rights by multinational companies.

In particular, the Collective Redress Directive aims to enable qualified entities (i.e. consumer organizations or public bodies) to take representative action in order to take action such as (1) remedies and declaratory remedies, which reduce the liability of a trader to the Consumers who are harmed by a relevant violation of the EU law and (2) z. B. Compensation, repair, replacement, price reduction, contract termination or refund of the price paid (if applicable). In order to bring representative cross-border lawsuits to court, qualified bodies must meet the same criteria across the EU. Domestic measures are subject to criteria set out in national laws.

The scope of the Collective Redress Directive covers all breaches of EU law by traders that harm or may harm the collective interests of consumers in a wide variety of areas such as data protection, travel and tourism, financial services, energy, telecommunications, and health and the environment – To include breaches of general EU data protection (the “GDPR”).

The directive on collective redress will enter into force 20 days after its publication in the EU Official Journal. The EU member states have 24 months to transpose the directive into national law and a further six months to apply it. The new rules apply to representative actions brought on or after the date of application of the Directive.

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