On 26 July 2013, the European Commission's Recommendation on Common Principles for Injunctive and Compensatory Collective Redress Mechanisms in the Member States concerning Violations granted under EU Law was published in the Official Journal of the European Union.1 The Commission had adopted the Recommendation on June 11, 2013.

There is little point in having EU law rights if they are not capable of being invoked and vindicated in a meaningful manner. However, it is not always easy for victims to exercise their rights because of national barriers and differences between Member State regimes. This can be all the more difficult where there is collective redress needed because there can be many victims and a small number of strong sophisticated defendants. This measure is a small step—only a non-legally binding recommendation-but it is a step towards citizens being better able to vindicate their rights. Businesses and others against whom collective redress actions could be taken should study the measure carefully because it is a menu of the options and policy considerations which are influencing the European Commission's thinking.

Legal basis for the Recommendation

The legal basis for the Recommendation was the Treaty on the Functioning of the European Union generally and art.292 in particular.

Purpose of the Recommendation

The Recommendation is aimed at facilitating access to justice and the provision of redress where there is a violation of EU law. In particular, the Recommendation would be useful in such areas as consumer protection, competition, environment protection, protection of personal data, financial services legislation and investor protection. The Recommendation would be relevant for collective claims for injunctions and/or damages in respect of violations of the rights granted under EU law.

Background to the Recommendation

The Commission sees the general background to the measure, according to the first Recital to the Recommendation, as being that the European Union

"has set itself the objective of maintaining and developing an area of freedom, security and justice, inter alia, by facilitating access to justice, as well as the objective of ensuring a high level of consumer protection."

It sees the particular problem as being, according to the second Recital, that the

"modern economy sometimes creates situations in which a large number of persons can be harmed by the same illegal practices relating to the violation of rights granted under Union law by one or more traders or other persons ('mass harm situation'). They may therefore have cause to seek the cessation of such practices or to claim damages."

This Recommendation follows on various Commission documents and initiatives. The Commission adopted a Green Paper on antitrust damages actions in 2005,2 a White Paper in 2008, which included policy suggestions on antitrust-specific collective redress3 and a Green Paper on consumer collective redress.4 The Commission conducted a public consultation entitled "Towards a more coherent European approach to collective redress" in 2011.5

The Parliament has also been active. On February 2, 2012 the European Parliament adopted a resolution entitled "Towards a Coherent European Approach to Collective Redress". In its resolution, the Parliament called for any proposal in the field of collective redress to take the form of a horizontal framework including a common set of principles providing uniform access to justice via collective redress within the European Union and specifically but not exclusively dealing with the infringement of consumer rights. The Parliament also recognised the need to take due account of the legal traditions and legal orders of the individual Member States and enhance the co-ordination of good practices between Member States.6

Key Concepts in the Recommendation:

The Recommendation defines "collective redress" in art.3 as

"a legal mechanism that ensures a possibility to claim cessation of illegal behaviour collectively by two or more natural or legal persons or by an entity entitled to bring a representative action (injunctive collective redress); (ii) a legal mechanism that ensures a possibility to claim compensation collectively by two or more natural or legal persons claiming to have been harmed in a mass harm situation or by an entity entitled to bring a representative action (compensatory collective redress)."

In turn, a "mass harm situation" is also defined by the same article as "a situation where two or more natural or legal persons claim to have suffered harm causing damage resulting from the same illegal activity of one or more natural or legal persons". A "representative action" means, according to art.3, "an action which is brought by a representative entity, an ad hoc certified entity or a public authority on behalf and in the name of two or more natural or legal persons who claim to be exposed to the risk of suffering harm or to have been harmed in a mass harm situation whereas those persons are not parties to the proceedings"; and a "collective follow-on action" means "a collective redress action that is brought after a public authority has adopted a final decision finding that there has been a violation of Union law".

Approach of the Recommendation

The approach of the Recommendation is that all Member States should have collective redress systems at the national level which would abide by the same basic principles. These principles relate to the issues of legal standing, admissibility, availability of information, reimbursement of legal costs of the winning party, funding, use of the "opt in" approach for collective actions, lawyer's fees and prohibition of punitive damages.

As a general principle, Member States should ensure that the collective redress procedures are fair, equitable, timely and not prohibitively expensive.

The Recommendation makes reference to "legal representation and lawyers' fees" and states that the "Member States should ensure that the lawyers' remuneration and the method by which it is calculated do not create any incentive to litigation that is unnecessary from the point of view of the interest of any of the parties". Interestingly, the Recommendation also states that the

"Member States should not permit contingency fees which risk creating such an incentive. The Member States that exceptionally allow for contingency fees should provide for appropriate national regulation of those fees in collective redress cases, taking into account in particular the right to full compensation of the members of the claimant party."7

Some jurisdictions allow punitive damages but the Recommendation states that the

"compensation awarded to natural or legal persons harmed in a mass harm situation should not exceed the compensation that would have been awarded, if the claim had been pursued by means of individual actions. In particular, punitive damages, leading to overcompensation in favour of the claimant party of the damage suffered, should be prohibited."

Relationship with Member State regimes

The Recommendation is pragmatic enough to recognise that there are different approaches in the Member States so it says that the Recommendation and the Member States must respect the different legal traditions of the Member States.

Next steps

As a Recommendation, there is no explicit obligation to abide or implement it. Nonetheless, the Commission recommends that Member States should implement the principles set out in the Recommendation in their national collective redress systems by July 26, 2015. So as to assist the Commission in monitoring the situation and providing some "soft" pressure on Member States, they are recommended to provide annual statistics to the Commission.

The situation will be reviewed in two years' time. The Commission intends to review the implementation of the Recommendation on the basis of practical experience by July 26, 2017 at the latest. It may be that there would be additional or alternative measures then or, as sometimes happens with Recommendations, there could be a legally binding measure proposed by the Commission to the European Parliament and the Council.

The Recommendation was published alongside the Commission's Proposal for a Directive on rules governing actions for damages under national law for infringements of competition law. It is also worth seeing the Recommendation in the context of Directive 2009/22 on injunctions for the protection of consumers' interests.8 However, the Recommendation recognises in the 11th Recital that the injunction procedure introduced by the Directive does not, however, enable those who claim to have suffered detriment as a result of an illicit practice to obtain compensation.9


The Recommendation should be seen as part of a range of measures which the European Commission, supported largely by the European Parliament, is likely to bring forward over time to ensure that consumers ("citizens" in EU-speak) will be able to obtain redress where their rights have been infringed. It is only a recommendation but it will be converted, in whole or in part, into binding legislation if the Commission's plans and ambitions come to fruition.