Under the timeline imposed by the EU’s Directive of the European Parliament and of the Council on Representative Actions for the Protection of the Collective Interests of Consumers, the EU’s 27 member states were required to provide a collective litigation option to consumers by December 25, 2022, including by adopting or amending national law in jurisdictions where mechanisms for such litigation were not previously established. By June 25, 2023, member states are required to implement and begin applying these new mechanisms. But while that process is still ongoing, multiple EU member states have already taken legislative action to permit greater collective litigation mechanisms than previously available in their respective jurisdictions. Additionally, legal industry observers have already noted the increased presence of plaintiffs’ firms and litigation funders in the EU in response to the greater and increasing availability of representative and collective redress actions. See K. Henderson, Z. Okanyi, et al., European Class Action Report 2022, at 2, CMS (2022), available at https://cms.law/en/int/publication/cms-european-class-actions-report-2022.
In particular, one study noted that class action filings in Europe had increased more than 120% over the last five years (from 49 in 2018 to 110 in 2021), propelled by greater attention to potential mass actions by plaintiffs’ firms and increased availability of litigation funding. The data confirms what practitioners in this space already know: the plaintiffs’ bar in the EU is not waiting for the full implementation of the Representative Actions Directive. Of particular note, this rise is fueled, in significant part, by product liability, personal injury, and consumer mass actions.
Delving deeper into the data, the class actions filed in Europe over the 2016-2021 time period were spread across a number of industries: financial products/shareholder/securities class actions comprised 29% of total filings; product liability/consumer law/personal injury class action amounted to another 22%; human rights/discrimination/environmental claims were 14%; and the remaining 35% were comprised of various other types of cases. But in the recent uptick, product liability/consumer law/personal injury class actions have significantly increased, tripling from 10 in 2020 to 30 in 2021. Indeed, product liability/consumer law/personal injury class actions were the largest category of filings in 2021.
At least for now, the geographic data shows that the filings are concentrated in a few jurisdictions. More than half of class action filings in Europe (about 54%) were filed in the United Kingdom during the five-year period between 2016 and 2021. (While the Directive does not apply to the UK after it left the EU as part of Brexit, the UK has pre-existing national law permitting class actions and the most established plaintiffs’ bar in this area in Europe.) The Netherlands was the second most common jurisdiction for filings with 13% over the same period. In particular, the Netherlands and Portugal stand out in the data for the highest growth in class action filings over the past two years relative to prior filings in those countries, while filings in some larger member states such as Germany and France have been low. Importantly, the increase in filings is not limited to EU member states as 7% of all European class actions during this five-year period were filed in North Macedonia, which has a population of about 2 million and is a candidate for EU membership, but is not a member yet. What this data shows is that whether a member state or not, class actions are increasing at an unprecedented pace in Europe, and the Directive promises to fuel that trend well into the future. We will monitor to see whether these trends continue.
The information in this article includes an updated version of an introductory article on the Collective Redress Directive. We continue to monitor the implementation of the Collective Redress Directive by EU members and related developments, and have written on related topics for those interested in more information.
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