Definition and Purpose of the European Representative Action
Die European Representative Action is a legal instrument introduced by EU Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers (the so-called Representative Actions Directive). The aim of this form of action is to facilitate the collective enforcement of rights for consumers within the European Union and to respond effectively and across borders to shortcomings in consumer protection. The European Representative Action enables qualified entities to assert claims jointly on behalf of numerous harmed individuals, without each affected person having to file a separate lawsuit.
Legal Framework and Origins
The introduction of the European Representative Action is based on EU Directive (EU) 2020/1828, which entered into force on 24 December 2020. The directive requires Member States to implement corresponding provisions in national law by 25 June 2023. The goal is the effective protection of collective consumer interests both at the national and cross-border level.
In German law, the directive was implemented by the Act Implementing the Representative Actions Directive and the corresponding amendment of the Code of Civil Procedure (ZPO) in 2023.
Requirements of the European Representative Action
Qualified Entities
A representative action may be brought exclusively by so-called qualified entities. These are, for example, consumer associations or comparable organizations that meet certain legal and organizational requirements:
- Independence and non-profit status,
- Proof of a certain minimum number of active members or actual activity over a certain period,
- Proof of a stable financial position.
Scope of Application
The European Representative Action is applicable in the field of consumer protection law, particularly in cases of violations of European and national provisions protecting consumer interests. This includes, for example, product liability, data protection, financial services, travel contract law, or digital services.
Cross-border and National Aspects
The action can be brought both in purely domestic matters and in cross-border cases, as soon as consumers in more than one Member State are affected.
Procedural Steps and Particularities
Initiation of the Model Procedure
The qualified entity files the action with the competent court of a Member State. The claim must clearly define against which company or companies the proceedings are directed and what legal infringement is alleged.
Public Notice and Consumer Participation
The proceedings are publicly announced so that affected consumers become aware of the proceedings and can join them (so-called “opt-in” or “opt-out” procedures, depending on national regulation). The aim is to reach as many affected parties as possible and to effectively aggregate their rights.
Effects of Judgments
In its judgment, the court determines whether a legal violation has occurred. The decision is binding for the business and the participating consumers. As a rule, the judgment establishes entitlement and, where applicable, the type of performance or compensation.
Collective Damages Regulation
Depending on the procedural design, the directive provides for the possibility that, following the declaratory proceedings, there will also be a collective enforcement and payout of damages to the affected consumers.
Regulations in Germany Compared to the EU Directive
The implementation in Germany was achieved through the Act Implementing the Representative Actions Directive, which in particular amended the Code of Civil Procedure (§§ 606 et seq. ZPO) as well as the Injunctive Relief Act (UKlaG).
Differences from the National Representative Action
Since 2018, Germany has had a national representative action procedure (§§ 606 et seq. ZPO old version), which, however, previously did not provide for a direct payout effect for consumers. The harmonized European regime expands this model and for the first time makes it possible to enforce actual payment claims in collective proceedings.
Participation and Binding Effect
Under German law, the “opt-in” model generally applies: consumers must actively participate in the proceedings. The declaratory effect of the judgments has binding force for the participating consumers vis-à-vis the defendant companies.
Legal Consequences and Effects
Binding Effect
Judgments issued within the framework of the European Representative Action are binding on all parties involved. This ensures that the underlying legal question is clarified uniformly and the individual enforcement of claims is facilitated.
Interface with Other Instruments
The European Representative Action supplements other collective legal enforcement instruments, such as interim injunction proceedings, injunctive relief proceedings, or collective damages actions.
Significance for Consumers and Companies
Advantages for Consumers
The aggregation of the interests of many affected parties leads to increased clout against companies and enables more efficient and cost-effective enforcement of rights. The ability to participate in the proceedings also makes it easier for individuals with minor damages to assert their claims.
Impact on Businesses
Companies are faced with a standardized and transparent procedure that reduces the risk of numerous parallel individual lawsuits, but has a broader reach and public exposure. Such proceedings also promote legal certainty and peace.
International and Cross-border Aspects
The European Representative Action is explicitly tailored to cross-border cases. It enables claims by consumers from different EU countries to be brought together before a single court. This ensures harmonized consumer protection within the internal market.
Critical Appraisal and Outlook
The introduction of the European Representative Action is a significant step toward effective collective legal protection in Europe. Harmonization of legal enforcement strengthens consumer interests and encourages companies to act lawfully. However, there is some criticism of the practical design, for example regarding the financing of proceedings, the admission requirements for qualified entities, or international jurisdiction. The further development and practical application in Member States will show to what extent the directive’s objectives will be realized in practice.
Literature and Further Information
For a deeper exploration of the subject, it is particularly recommended to read Directive (EU) 2020/1828 as well as the legislative materials on its implementation in the respective Member States. Further academic discussions can be found in current commentaries on the Code of Civil Procedure as well as in monographs and professional journals on collective legal protection and consumer law in Europe.
Frequently Asked Questions
Who can join a European Representative Action?
In principle, consumers—i.e., natural persons acting for private purposes—can join a European Representative Action. This generally concerns people who have been harmed in the same way by a company’s conduct. Joining is usually done through a formal registration with the competent register or court, with national regulations being decisive. The participant must substantiate their claims against the defendant company and provide all relevant information. It is important that the affected person registers within the legally specified deadlines, as late entry is generally excluded. By registering, the statute of limitations on individual claims is suspended. Participation in a representative action is free of charge and poses a low cost risk for the consumer, as they are not party to the proceedings and do not bear any court or legal fees if the action is unsuccessful.
What legal effects does a judgment from a European Representative Action have?
The judgment of a European Representative Action is binding for the defendant and all registered consumers. It determines whether a certain conduct or factual situation exists and whether claims result from it. However, the judgment itself does not immediately determine the individual amount of damages or grant a direct claim for compensation to the individual consumer. The binding effect is limited to findings regarding the prerequisites for claims and, if applicable, the liability of the defendant party. Based on the model judgment, consumers can subsequently assert their individual claims more easily out of court or in court, as the main elements have already been established and do not have to be proven again. The judgment thus has precedent value in similar disputes.
What role do qualified entities play in initiating a representative action?
The initiative for a European Representative Action can only be taken by qualified entities, such as consumer associations or specific non-profit organizations. These must be recognized by national authorities and meet certain requirements regarding independence, non-profit status, and activity in the field of consumer protection. Provided these organizations exclude economic or personal self-interest and have sufficient funds to conduct proceedings, they can bring the action on behalf of the affected consumers. The qualified entity represents the aggregated interests of consumers and acts as the claimant in the proceedings. The association also ensures proper information and communication, thus enabling those affected to access the legal action.
What is the procedure of a European Representative Action in detail?
The procedure of a European Representative Action consists of several stages. First, the qualified entity files a statement of claim with the competent court, describing the facts and formulating model questions that require a binding determination. After the action is admitted, there is a public announcement and the establishment of a complaints register in which affected consumers can enroll to participate. Once the registration period has ended, the main oral hearing begins, during which the court examines the submitted model questions, hears witnesses, and collects evidence. After the oral proceedings are concluded, a judgment is issued with binding effect on the established questions. The judgment is again made public, and consumers can use this as a basis to assert their individual claims, either through a specific follow-up or enforcement procedure or through out-of-court settlement with the company.
What cost risks exist for consumers and qualified entities?
For consumers joining a European Representative Action, there is generally no cost risk. Participation is free of charge; court and other procedural costs are not passed on to individual consumers. The qualified entity bears the cost risk of the action but is reimbursed for necessary legal costs by the losing party if successful. Qualified entities may rely on third-party litigation funding or draw on member contributions and donations. National procedural rules may include special provisions, for example, regarding recoverable costs or financial support for qualified entities. For consumers, there is no risk of losing an expensive individual lawsuit.
What claims can be asserted within the framework of the European Representative Action?
Within the framework of the European Representative Action, claims for a declaration of a breach of contract, injunctive relief, rectification of an unlawful situation, reimbursement of unjustifiably paid amounts, or damages can primarily be asserted. The statement of claim is limited to determining such collective facts and whether, in principle, a claim for damages exists. The concrete amount of individual damages or the awarding of a specific remedy occurs only in subsequent proceedings or through out-of-court settlement after the model judgment has been issued.
Can companies or legal entities also join a representative action?
No, the instrument of the representative action at European level was created exclusively to protect consumer interests. Companies, self-employed persons, or other legal entities are not entitled to assert rights from such an action or join it. These groups must pursue their claims through regular litigation or other collective action mechanisms, provided national legal remedies exist.
How does the European Representative Action relate to existing national collective action instruments?
The European Representative Action harmonizes collective action law at the EU level and establishes minimum standards that all Member States must adopt. It therefore supplements existing national collective legal protection instruments, such as the German representative action under § 606 ZPO. Member States can maintain more far-reaching or stricter provisions, as long as these do not fall below the EU’s minimum requirements. Existing national procedures thus remain in place, but may be expanded or adapted by the European regime, particularly to provide coherent consumer protection in cross-border cases.
