EU Commission takes action for failing to implement Collective Redress Directive
Hardly any EU member state has transposed the Collective Redress Directive into national law on time. As a result, the EU Commission recently launched the first stage of infringement proceedings against 24 member states, sending them letters of formal notice for failure to implement the directive.
The Collective Redress Directive
The Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers introduces a right to collective redress across the EU. It requires member states to put in place procedures for “qualified entities” to bring representative actions to obtain injunctions, damages and other remedies on behalf of a group of consumers who have been harmed by a trader who has allegedly infringed EU law (read more here). Once implemented by the member states, the directive could have a significant impact on the balance of power in consumer redress and is likely to facilitate the current trend of increased commercialisation of consumer rights and actions in Europe. Yet, many member states are struggling with certain elements of the directive which are controversial and/or alien to their legal system.
Status of implementation
Member states should have transposed the directive into national law by 25 December 2022, with a further six months for the new provisions to come into effect. However, with many elements being highly controversial in various member states, hardly any member state has fully implemented the directive on time. EU heavyweights such as Belgium and Germany (read more here) have not even produced an official draft yet. In other member states, such as Spain (read more here) and Luxembourg (read more here), parliamentary discussions are still ongoing. So far, only Hungary, Lithuania and the Netherlands (read more here) have notified the EU Commission of the implementation.
Opening of infringement proceedings
The Commission thus sent letters of formal notice to all other member states for failure to implement the directive. These 24 member states now have two months to reply to the letters of formal notice and complete the transposition. If they fail to do so, the Commission may decide to issue a reasoned opinion, which is a formal request to comply with EU law. If a member state still fails to comply, the matter may eventually be referred to the Court of Justice, which can not only order the member state concerned to comply with EU law but may also impose penalties.
It is to be expected that further member states will have implemented the directive by 25 June 2023, when the new national provisions are due to come into force. If they fail to do so, not only will they risk being taken to the European Court of Justice, but there will also be discussions about the direct effect of the directive in those member states.
We will keep you updated on further developments in selected EU member states through this blog and our implementation tracker. In case you missed our cross-office webinar on the implementation of the directive, you can access the slides here.