{"id":2695,"date":"2023-03-04T18:15:40","date_gmt":"2023-03-04T17:15:40","guid":{"rendered":"https:\/\/eversberg.biz\/?p=2695"},"modified":"2023-03-10T10:23:26","modified_gmt":"2023-03-10T09:23:26","slug":"the-eu-directive-on-representative-actions-and-litigation-funding-proposal-of-the-german-government","status":"publish","type":"post","link":"https:\/\/eversberg.biz\/en\/the-eu-directive-on-representative-actions-and-litigation-funding-proposal-of-the-german-government\/","title":{"rendered":"The EU Directive on representative actions and Litigation Funding - proposal of the German government"},"content":{"rendered":"

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On February 23, the time had come and the draft bill for the collective action for payment (Abhilfeklage<\/em>) was published despite the still existing differences in the government coalition and interested parties were given the opportunity to comment.<\/p>\n

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Implementation via Verbraucherrechtedurchsetzungsgesetz<\/em> (VRUG)<\/p>\n

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As is known, the redress action will supplement the model declaratory action (MDA) as an action for performance as an implementation of the European Directive on collective redress. Here, too, the person directly affected is not entitled to bring an action, but only qualified consumer associations as well as listed, qualified institutions from other EU countries. These must credibly demonstrate that there are at least 50 affected persons. The initial instance is a higher regional court, the procedure is four-stage: In the so-called judicial remedy procedure, the court examines the merits and issues a basic judgement (1), against which an appeal to the Federal Court of Justice (BGH<\/em>) is admissible. After the judgement has become final, the parties should try to settle the claims by means of a compromise (2). If this is unsuccessful, a remedial judgement (3) is issued, in which the court also determines a collective amount of damages. It also appoints an administrator (4) who distributes this amount among the claimants individually.
The coalition still disputes the deadline for a plaintiff to join the action (currently an opt-in is possible until one day before the first hearing) and the suspension of the statute of limitations (currently only for joined claimants and suspended individual proceedings).<\/p>\n

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Effective consumer protection needs financial strength<\/h3>
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The criticism of the draft is limited. So far, so good? No, because who actually \"throws the party\"?<\/p>\n

Only the German and European consumer organizations are authorized to file lawsuits, but they are chronically short of funds (in its statement, the Federal Consumer Association VZBV<\/em> criticizes the doubling of the amount in dispute to EUR 500k compared to the MDA).<\/p>\n

The commercial litigation financiers could help here by<\/p>\n

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  • taking on the role of plaintiff themselves - but they are not allowed to do so, cf. § 4 para. 2, no. 3 VRUG<\/li>\n
  • inancially supporting the qualified plaintiffs – but they are only allowed to do so up to a maximum of 5% of the financial resources of the institutions, which is unlikely to have any effect, or<\/li>\n
  • finance the remedial actions in return for a share in the success.<\/li>\n<\/ul>\n

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    Consumer associations and litigation financiers hand in hand<\/h3>
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    The latter would bring together what belongs together for assertive consumer protection: a consumer protection-oriented organisation and financially strong companies that guarantee financial equality of arms with the defendant corporations. Of course, a commitment of financial, organisational and human resources does not come for free. This must also apply to the designated administrator, who will be faced with the challenging task of satisfying hundreds, if not thousands, of claimants within a reasonable period of time.<\/p>\n

    In coordination with the forthcoming regulation of litigation funding in the EU, a comprehensive set of rules should therefore be created that enables litigation funding for remedial actions - just as it should do for actions for the recovery of profits pursuant to § 10 UWG. The legislator is called upon to create a framework for this (in particular the amount of the participation, the right of the financier to have a say, cf. my blog of 07.10.2022), which makes the litigation financing of consumer claims of all kinds attractive. Incidentally, as provided for in § 9 (2) VRUG, the court, which must approve a settlement, would be the supervisory authority.<\/p>\n

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    Conclusion:<\/h3>
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    This is not witchcraft, but requires a little foresight and courage. And it would be entirely in the spirit of Germany as an attractive court location.<\/p>\n

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