Collective Redress: The Need for New Technologies

Abstract

After many years of debate on collective redress, the European Commission has proposed to introduce a representative mechanism to be controlled by public bodies and consumer associations that satisfy certain criteria. However, the Commission has only considered a single mechanism (the litigation-based class or representative action), which is in fact "old technology." There are several other mechanisms that deliver collective redress-new technologies. The first is the partie civile mechanism in which a civil claim "piggy backs" onto a criminal conviction. The most important mechanisms are "regulatory redress"-where a regulatory authority intervenes and agrees or orders redress to be paid-especially if coupled with an ombudsman scheme (not arbitration-based alternative dispute resolution (ADR) schemes). The regulatory redress mechanism was proposed by the Commission in the revised Consumer Protection Cooperation (CPC) Regulation but what emerged was not ideal. All these mechanisms have recently been evaluated against criteria such as their speed, cost, and ability to deliver effective outcomes. The empirical data clearly demonstrate that the new technologies are better than the old technologies. The new technologies also deliver more functions than the old: not just resolution of a dispute or delivery of redress but also assistance to consumers and traders and the ability to aggregate data on trading issues that is fed back to improve compliance, behaviour, and performance in the market place. This evidence leads to the conclusion that the Commission's proposals are unlikely to deliver effective collective redress for consumers. The proposed method is out of date technology, and other mechanisms are clearly preferable and should be adopted instead. Member States are permitted to maintain existing collective redress mechanisms. That will lead to considerable confusion and diversity, which does not support an integrated single market. Further, the proposal will lead to a diversity of available mechanisms between Member States and hence confusion and competition between intermediaries-forum shopping. The way forward is for the EU to adopt regulatory redress and consumer ombudsmen, rather than the old fashioned litigation model. The analysis also reveals that the Impact Assessment system has flaws.

Naming something collective does not make it so: algorithmic discrimination and access to justice

“…Hodges has noted how the procedural reforms in the EU and its member states that aim to better collective mechanisms lack creativity, as the EU tends to circulate old tools in a slightly altered form to address new problems (Hodges, 2019).…”

“…However, the existing collective proceedings, such as class action or representative action, are not sufficient to address discrimination (Lahuerta, 2018;Farkas, 2014), let alone algorithmically-produced inequality. The problems that raise the threshold for accessing the court and accessing justice include procedural rules, which determine whose injustice is heard, institutional arrangements around procedural justice, as well as information and power asymmetries (Hodges, 2019;Lahuerta, 2018;Cappelletti & Garth, 1978).…”

Transnational collective actions for cross-border data protection violations

“…Collective remedies or collective redress mechanisms include a large number of legal instruments aimed at resolving disputes by clustering multiple individuals within a single action or procedure. According to Hodges (2019), the collective enforcement mechanisms that can be identified are private collective litigation, the partie civile mechanism (a civil claim following on from a criminal prosecution), the involvement of public regulatory authorities (either through the power to order redress by starting a collective court claim or merely through the general enforcement authority) and Alternative Dispute Resolution (ADR), namely through the Consumer Ombudsman.…”

“…The objective of these types of actions can be simply compensatory, allocating the damages caused by the violation to each of the group members, or may be to achieve deterrent effects, in particular through injunctive relief preventing future violations (Hodges, 2019;Bosters, 2017;Trstenjak and Weingerl, 2014).…”

Posebnosti upravnog postupka za zaštitu kolektivnog interesa potrošača

“…je to predviđeno važećim Zakonom o zaštiti potrošača, 8 i dalje ostaje čvrsto na javnopravnoj strani, 9 a argumenti za to dati su u narednim delovima teksta. Pritom, ovo pitanje se ne postavlja isključivo u svrhu teorijske rasprave već je u službi analize adekvatnosti ovog rešenja kao mere javne politike.…”