European collective actions

One of the most interesting global legal developments has been the rise in recent years of collective redress mechanisms outside the United States, a phenomenon on which I have commented in the context of collective investor actions. The provision for collective or representative actions has expanded in a number of other contexts as well, including in particular in the consumer context. On April 11, 2018, the European Commission introduced a proposal – as part of what it called a “New Deal for Consumers” – that would introduce a European collective redress right for consumers. This proposed collective action mechanism is subject to a number of procedural protections. Nevertheless, the proposal, if adopted, would represent a significant advance in the development of collective redress mechanisms and rights in Europe. The European Commission’s April 11, 2018 press release about the proposal can be found here.
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As I have previously noted on this blog (most recently here), one of the most significant recent developments in the D&O claims arena has been the global rise of collective investor actions. One factor in this development in Europe has been the non-binding 2013 Collective Redress Recommendation, in which the European Commission recommended that each of the EU’s 28 member states adopt collective redress mechanisms. Many of the member states have now adopted some form of collective redress but the approaches the various states have taken are not uniform.

In an October 24, 2017 publication entitled “Collective Redress Tourism: Preventing Forum Shopping in the EU” (here), the U.S. Chamber of Commerce Institute for Legal Forum asks whether the diversity of procedures adopted, and in particular the diversity of safeguards the member states have put in place, along with litigants’ relative freedom to choose between jurisdictions, has led to potentially detrimental forum shopping. The publication raises a number of interesting questions, which I discuss below.
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vw2Several years ago, when investors’ representatives used class claims settlement procedures available under Netherlands law to reach securities claim settlements involving Royal Dutch Shell (about which refer here) and Converium (about which refer here), there was a great deal of speculation whether the Dutch procedures could become an important vehicle for aggrieved investors to recover damages for alleged securities law violations.

This speculation was particularly magnified after the Amsterdam Court of Appeal, in connection with the Converium settlement, held that the Dutch settlement procedures could be used to resolve securities claims of non-Dutch investors against a non-Dutch company, in the form of judgment that is enforceable throughout the EU and among other European countries. Though many of these kinds of investor settlements were anticipated, the onslaught of securities settlements using the Dutch procedures never really did materialize.

However, a new initiative being organized in The Netherlands on behalf of Volkswagen securities holders whose investment interests were harmed as a result of the automobile company’s emissions-related scandal may represent the most significant effort since the Converium case to try to use the Netherlands procedures on behalf of an aggrieved class of investors. This initiative on behalf of Volkswagen’s securityholders has a number of interesting features. It also raises a number of potentially complicated questions about jurisdiction, priority, potential preemption, and international comity.
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