Will Aggregate Litigation Come to Europe?
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Description
The current wave of deregulation and market liberalization in Europe has had major repercussions for the prospect of litigated forms of collective redress. Once decried as the perversity of rapacious Americans, class actions are now the focus of significant reform efforts in many European countries and even at the level of the European Union. There are, no doubt, many reasons for the relatively sudden attention to means of collective redress. Some have to do with the need to create effective ex post accountability mechanisms to contain the potential adverse effects of goods and services freely entering the market. Others seek to create mechanisms for efficient resolution of the numerous intertwined claims that invariably arise from the mass production and delivery of goods and services across a broad market. One should not gainsay the significance of these reform measures. All represent efforts to mobilize means of private enforcement to foster prevention through the prospect of civil litigation. For countries steeped in the civil law tradition, the move away from centralized public enforcement is a sea change in legal structures. The marriage of private enforcement mechanisms and relaxed barriers to entry into increasingly deregulated markets is a significant change as well. Add to that the diversity of litigation tools that are being developed and one would have to be almost churlish not to marvel at the liberalizing spirit sweeping the Continent. And, yet, one need spend only a few minutes in conversations with European reformers before the proverbial ‘but’ enters the discourse, as in, ‘But, of course, we shall not have American-style class actions’. At this point, all participants nod sagely, confident that collective actions, representative actions, group actions and a host of other aggregative arrangements can bring all the benefits of fair and efficient resolution to disputes without the dreaded world of American entrepreneurial lawyering. And no doubt the American entrepreneurial ways must be resisted and will be resisted fully, in much the same way that Europe has held off the unwelcome presence of McDonalds or Starbucks in its elegant piazzas. To this dignified and self-assured conversation we bring a simple but unwelcome question: Really? We develop this chapter in two parts. First, we must acknowledge that the aversion to the American-style class action corresponds to sustained critiques of class actions in the U.S. as well. A number of American reforms, from revisions to the class action provisions of the Federal Rules of Civil Procedure to the Class Action Fairness Act, have taken aim at some of the misfirings of class actions. Some Supreme Court decisions, most notably Amchem and Ortiz, have burdened class actions with procedural strictures that have limited the class action as an effective vehicle for resolution of mass personal injuries. Thus, in the U.S., broad scale settlements of asbestos exposures or of pharmaceutical injuries are likely to take the form of bankruptcy workouts, or mass private aggregative settlements, as with the claims over harms caused by the anti-inflammatory drug, Vioxx. In this first section, we examine four sources of claimed dissatisfaction with the class action to assess which are meritorious, which are ill-founded, and which derive from a deeper contest over whether or not there should be private legal accountability for low value or negative value consumer claims. We then move on to draw certain conclusions from the American experience with collective actions to ask whether the proper incentives and institutional arrangements exist in the European reform efforts. Our aim here is not to advocate that American processes need be adopted; neither of us sets foot in McDonalds or Starbucks when in Europe. Rather, our inquiry is whether, based on some of the lessons that may be derived from both the American experience and the simple economics of incentive systems, the current European reforms are likely to be effective in realizing their stated aims. Our concern is that appears as an apparent cultural revulsion at accepting the reality of legal enforcement as entrepreneurial activity may leave the reforms without the necessary agents of implementation.
Source Publication
The Law and Economics of Class Actions in Europe: Lessons from America
Source Editors/Authors
Jürgen G. Backhaus, Alberto Cassone, Giovanni B. Ramello
Publication Date
2012
Recommended Citation
Issacharoff, Samuel and Miller, Geoffrey P., "Will Aggregate Litigation Come to Europe?" (2012). Faculty Chapters. 925.
https://gretchen.law.nyu.edu/fac-chapt/925
