EU-Representative Action: Product law comprehensively included!

On 25 November 2020, the Representative Actions Directive (EU) 2020/1828 (“RA-Directive“) was adopted. It must be implemented by the member states within two years and applied by mid-2023 at the latest. The scope of application of the Representative Action (“RA”) covers numerous provisions of product law and product liability based on European law. The aim of the RA-Directive is to enable consumer interests to be enforced more effectively. Indirectly, it is also intended to strengthen companies’ compliance with the EU regulations included in the Directive. A lawsuit can be filed for injunctive measures against unlawful business practices as well as for redress measures.

Only qualified entities designated by member states and representing consumer interests are entitled to bring an RA. Solely the (impending) violation of collective consumer interests by the infringement of one of the consumer law provisions listed in Annex I of the Directive can be challenged with an RA. Annex I lists, among others, the General Product Safety Directive 2001/95/EC and the Product Liability Directive 85/374/EEC. Also covered are: the Medical Device Regulation (EU) 2017/745, the Low Voltage Directive 2014/35/EU, the General Food Law Regulation (EC) No 178/2002, the Ecodesign Directive 2009/125/EC, the Energy Efficiency Directive 2012/27/EU and the Energy Labelling Regulation (EU) 2017/1369.

The term ‘collective interests of consumers’ is defined very vaguely by the RA-Directive in Art. 3(3) as ‘the general interest of consumers and, in particular for the purposes of redress measures, the interests of a group of consumers’. Since safety, energy efficiency and product liability always serve consumer interests, the scope of application of the RA-Directive within the above-mentioned provisions is likely to be very broad. An RA for redress measures, in the case of distribution of non-compliant products, could be inter alia aimed at remedies such as direct compensation (but not punitive damages), repair, replacement, price reduction, contract termination or reimbursement of the purchase price paid.

For manufacturers, importers and distributors, the new RA is likely to entail qualitatively completely new liability risks for product compliance violations and product liability cases. This is not only because of the broad scope of application and the omission of individual enforcement of claims in a follow-up lawsuit (unlike the Declaratory Model Action – ‘Musterfeststellungsklage’ – under German law). There is also a risk of ‘forum shopping’ by plaintiffs, i.e. the strategic choice of an ‘advantageous’ jurisdiction, as the member states have considerable leeway in the transposition of the RA-Directive into national law.