Session 4 : Collective Claims of Consumer Asscociations

1. Session 4:Collective Claims of Consumer Asscociations Patrick von Braunmühl Federation of German Consumer Organisations (vzbv)

2. Private enforcement in Germany Number of collective actions for injunctive relief from consumer organisations:

3. Collective action for injunctive relief ADR, claims of assigned rights International collective injunctive actions and enforcement Redress mechanisms with collective elements Need for group actions Instruments of collective actions in Germany and the European Union

4. Injunctive relief in Germany • consumer organisations can bring actions against misleading or dishonest advertising Procedure: declaration of injunction signed not signed infringement of the covenant file for injunctive relief in court penalty

5. Collective action for injunctive relief ADR, claims of assigned rights International collective injunctive actions and enforcement Redress mechanisms with collective elements Need for group actions Instruments of collective actions in Germany and the European Union

6. Cross-border infringements • EU-Directive on injunctions for the protection of consumers´ interests; 1998 • National consumer associations can file for injunctive relief in other member states • Creation of qualified entities: public bodies or organisations protecting consumer interests

7. International Enforcement • EU-Regulation on consumer protection cooperation, 2004 • Need for information exchange • Each EU-member state creates a public enforcement authority • EU-wide network of these national enforcement authorities • Consumer Organisations not integrated

8. From injunctive relief towards group actions • Limited benefit from injunctive actions • Innovative legal instruments in several EU-member states • e.g.Germany: Profit-skimming procedures introduced • High risk and no incentive to file for profit-skimming

9. Need for group actions • Inefficacy of actions based only on injunctions and profit-skimming • Need to compensate individual consumers by group actions • Disadvantages of the US class action system • Punitive damages • Contingency fee • Constitutional problems • Development in several EU-member-states concerning group actions: Germany, France, Sweden, Denmark, Spain

10. opt-in versus opt-out • opt-in • Japan, Sweden, German draft • opt-out • USA, Canada, Australia • pro • Broader market impact • Consumer benefits even if he was not aware of the case • pro • Consumer can pursue his case individually • Freedom of decision • contra • Right to be heard affected • Consumer may get less than his right • contra • Problem to reach all affected consumers • Less market impact

11. Disadvantages: Investigation powers limited No central office for international collaboration and inquiry Data protection problems when exchanging information Advantages: Less bureaucracy More flexibility Good knowledge about consumers’ problems Development of case-law Private enforcement

12. Thanks for your attention