On February 2, 2012, the European Parliament issued a resolution expressing support for an opt-in class action system for Europe, rejecting the opt-out mechanism, and portraying the U.S. Supreme Court’s decision in Wal-Mart v Dukes as an attempt “to limit frivolous litigation and abuse of the U.S. class action system” which is a puzzling description of the Court’s actual decision applying Rule 23 requirements for class certification. Read the resolution: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2012-21#ref_1_8.

The reasons for the resolution’s rejection of the opt-out mechanism remain unclear.  Intense lobbying by industries who are represented by 14,000 lobbyists in Brussels has been criticized in Euronews for the lack of transparency and accountability.

In addition, the resolution expressed the view that, in any EU wide system of collective redress, “there must be a clearly identified group, and identification of the class members must have taken place before the claim is brought.”  In practice, such a system would rarely be used.  In Member States that already have opt-in class actions, the opt-in class actions are very rarely used even without the onerous requirement to identify class members before filing the action.

In Sweden, only about 12 opt-in class actions have been filed in the past 10 years.  One of the Swedish opt-in class actions, NCC Marina, involved 32 owners of property near a marina.  With such valuable claims, they arguably did not even need the class action mechanism.  Any requirement to identify group members in advance (which is not a feature of the Swedish model) would be likely to further reduce the number of claims of any EU-wide system abiding by this part of the resolution.

To require lawyers to identify class members before a lawsuit is even filed would be the death knell for litigation. It would require enormous up-front expenditures to publicize a grievance and identify class members, many of whom would not bother to identify themselves over small damages before there is any class settlement to which they can submit a claim.

In the United States, even where there is a class settlement fund to which claimants can apply for damages, it frequently happens that very few claimants step forward to identify themselves and collect small amounts of damages.  In some U.S. class actions, less than 1 percent of class members have filed claims.  Although a low claim-filing rate may reflect the inadequacy of a class settlement based on an unenthusiastic response by claimants, some U.S. courts have approved such settlements despite objections lodged by class members.  Given the U.S. experience with claims filing rates where there are small amounts of money to be claimed from a settlement, it is likely that even fewer claimants would identify themselves before a lawsuit is filed under the proposal in the European Parliament’s resolution.  There would be little incentive for claimants to step forward prior to the filing of litigation.

To provide an open forum to discuss different viewpoints and address misconceptions about U.S. experience with class actions, Robert J. Gaudet, Jr.of RJ Gaudet & Associates LLC is helping to organize a conference that will take place in Brussels on November 12 and 13, 2012 on the topic of “Increasing Access to Justice Through Collective Redress: A Conference For Policy-Makers and Practioners.”  Guest speakers will include former Minister of Justice for Ireland Michael McDowell who will speak about the access to justice provision in Ireland’s Constitution; distinguished Members of the European Parliament; academic experts; practitioners; and lawyers in different Member States who have created and used different systems for collective redress.

Like many Member States, Ireland does not have any system of collective redress and, when there is a catastrophe such as the Stardust disco fire that killed hundreds of teens, Ireland has set up ad hoc fact-finding tribunals that can distribute compensation.  For smaller claims with less publicity, there is little chance that similar ad hoc tribunals will be established.  For all of these reasons, the time is ripe for a careful examination of misconceptions about the U.S. model and the pros and cons of various models under consideration in Europe such as the opt-in class action, the test case procedure, and other methods.

The November conference in Brussels will be jointly presented by Union Internationale des Avocats; the Netherlands Bar Association; AIJA (International Association of Young Lawyers); the National University of Ireland Maynooth Department of Law; the American Bar Association Section of International Law International Human Rights Committee; and other organizations.