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E.U. commissioner mulls introducing mass torts

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BRUSSELS, Belgium—The new European Commissioner for consumer affairs is mulling a consumer protection system that could bring a form of class actions to European law.

Though the Commissioner's office declines to use the term "class actions," Bulgarian European Commissioner Meglena Kuneva said in a speech earlier this month to the European Consumer Consultative Group that she is "in favor of considering possible action on collective redress, both for competition infringements and, for example, small claims."

As Ms. Kuneva noted in her confirmation hearings before the European Parliament last year, some member states already have, to varying degrees, "mechanisms of collective redress," and others are considering introducing such mechanisms.

A spokeswoman for Ms. Kuneva said the commissioner's proposals did not amount to the introduction of class actions, though she did not explain the difference between class actions and the form of "collective redress" favored by Ms. Kuneva.

"It's collective redress against companies that sell or provide defective merchandise or services. It's not the same thing as class actions," she said.

The spokeswoman said the commissioner planned to make a formal announcement on March 13, and would explain more when she presents a research study on the subject later in the month in Strasbourg, France.

Ms. Kuneva, who took office in November, has said collective actions could be part of her larger plan to revamp E.U. consumer protection rules to improve cross-border sales and the reliability of Internet shopping, purchases of secondhand goods, financial services and car rental, among other things.

The commissioner's proposals already are piquing the interest of risk managers in Europe.

"It does sound like class actions," said Marie-Gemma Dequae, president of the Federation of European Risk Management Assns. and group risk manager for Netherlands-based metals company N.V. Bekaert S.A.

"However, we don't yet know enough about (the commissioner's) plans to comment" more fully, Ms. Dequae said.

The commissioner's plan sounds similar to a recently aborted consumer rights bill that would have introduced class actions in France (BI, Feb. 7), said Michel Yarhi, president of France's risk management group, the Association pour le Management des Risques et des Assurances de l'Entreprise. "It sounds like the same idea," he said.

Mr. Yarhi, who is also group insurance manager at Societe Generale, said he is not worried by the prospect of a European consumer law but hopes for a common approach between French and European legislation. Certain candidates in France's current presidential campaign have supported the idea of class actions.

"It would be a very bad situation if there were antagonism between a European approach and the French approach," he said.

"In any case, the European law would have to be transposed into French law," Mr. Yarhi said.