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Evaluating Collective Redress: Models, Evidence, Outcomes and Policy

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Class Actions in Europe

Part of the book series: Ius Gentium: Comparative Perspectives on Law and Justice ((IUSGENT,volume 89))

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Abstract

This chapter asks two fundamental questions. What should the aims of collective redress be? Which mechanisms best deliver collective redress? The first is a normative question, and the second is an empirical question. The second question asks to what extent any particular technique or mechanism succeeds in satisfying the objectives set in the first question. The answer to the first question is a matter of public policy and perhaps legal philosophy. The answer to the second can only be decided by empirical evidence. The empirical evidence indicates that a number of techniques are better than others. Current evidence is that mechanisms such as online independent ombudsmen and regulatory authorities with mass redress powers are particularly effective in delivering redress to consumers.

Research funding was provided by HM Government, the Swiss Reinsurance Company Limited and the European Justice Forum.

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Notes

  1. 1.

    Dekker (2007).

  2. 2.

    Commission Regulation (EU) No 691/2010 of 29 July 2010 laying down a performance scheme for air navigation services and network functions and amending Regulation (EC) No 2096/2005 laying down common requirements for the provision of air navigation services, Art. 2(k).

  3. 3.

    Dekker (2007), p. 15.

  4. 4.

    McCune et al. (2011), p. 195.

  5. 5.

    Dekker (2007), p. 103: ‘The sheer threat of judicial involvement is enough to make people think twice about coming forward with information about an incident that they were involved in.’

  6. 6.

    Dekker (2007), p. 103; Helmreich (1999), pp. 39–43; McCune et al. (2011).

  7. 7.

    Regulation (EU) No 996/2010, Recital 4. Even in 1994, it was provided that a safety recommendation shall in no case create a presumption of blame or liability for an accident or incident: Directive 94/56/EC, Art. 10.

  8. 8.

    Regulation (EU) No 996/2010, Recital 22.

  9. 9.

    Regulation (EU) No 996/2010, Recital 24.

  10. 10.

    Regulation (EU) No 996/2010, Recital 25.

  11. 11.

    Gallagher et al. (2003), p. 1001; Studdert et al. (2010), p. 351; Professional Standards Authority (2018).

  12. 12.

    Sykes et al. (2014), p. 16.

  13. 13.

    The aviation industry accepts living with risk, so aims to maintain performance and not explicitly for safety.

  14. 14.

    Leading texts are Pigou (1920), Allingham (1999), Archer and Tritter (2001), Becker (1968), Stigler (1971).

  15. 15.

    Beres and Griffith (2001), Ehrlich (1996), Greenwood et al. (1994), p. 16. But see Kessler and Levitt (1999).

  16. 16.

    Accessible books are Ariely (2008), Banaji and Greenwald (2016), Barrett (2017), Bazerman and Tenbrunsel (2011), Haidt (2012), Heffernan (2011), Kahneman (2011).

  17. 17.

    Kahneman (2011) and Barrett (2017).

  18. 18.

    For histories of individuals involved in corporate crime, see Soltes (2016) and Gentilin (2016).

  19. 19.

    For a review see Hodges (2015a).

  20. 20.

    Leape (1994), p. 851.

  21. 21.

    Mulcahy and Rosenthal (1998), p. 8.

  22. 22.

    Leape (1994), p. 851; citing Berwick (1989) and Deming (1982).

  23. 23.

    Department of Health (2016), p. 21.

  24. 24.

    Ibid, 25, 26, quoting National Advisory Group on the Safety of Patients in England (2013).

  25. 25.

    See Department of Health (2015), Cm 9113; NHS England Serious Incident Framework (2015), Department of Health (2016), NHS England and NHS Improvement (2019).

  26. 26.

    Hodges (2015a).

  27. 27.

    Webster and Bolt (2016), RR1082; Blanc (2018).

  28. 28.

    Essential Services Commission of South Australia (2018).

  29. 29.

    DeNederlandscheBank (2015) and G30 (2018); Financial Conduct Authority (2018).

  30. 30.

    OECD (2010, 2013, 2014, 2015), G20/OECD (2015), OECD (2017), OECD, KDI (2017).

  31. 31.

    Ofwat (2019).

  32. 32.

    Godart et al. (2014); Sisodia et al. (2014) and EY (2016).

  33. 33.

    Hodges (2015a). For government publications see Hodges (2016a), Committee on Standards in Public Life (2016), Scottish Government (2016).

  34. 34.

    Hodges and Steinholtz (2017).

  35. 35.

    Kalven and Rosenfield (1941), p. 684, 687.

  36. 36.

    Kagan (2001) and Farhang (2010).

  37. 37.

    Yeazell (1987), p. 239.

  38. 38.

    Ibid.

  39. 39.

    Farhang (2010).

  40. 40.

    NAACP v. Button 371 US 415 (1963) at 429 and 431.

  41. 41.

    Hodges and Voet (2018), ch 7.

  42. 42.

    Coffee (2015).

  43. 43.

    US Class Actions: Theory and Reality EUI Florence working paper 2015/36 (ERC ERPL 14), http://hdl.handle.net/1814/36536; in German at http://hdl.handle.net/1814/46464. A shorter version is: Hodges (2016b). The number of sources is large but see especially Hensler et al. (2000).

  44. 44.

    Hodges and Voet (2018).

  45. 45.

    This terminology of old and new technology was first used, to our knowledge, by Derville Rowland of the Central Bank of Ireland at the Law Reform Commission’s annual regulatory conference, Dublin, 2016.

  46. 46.

    UNCTAD (2016), ch 6 and 11, http://unctad.org/en/PublicationsLibrary/webditcclp2016d1.pdf. Accessed 10 February 2020.

  47. 47.

    Against Google on behalf of 4 million customers over alleged misuse of users’ data, against Mastercard on behalf of some 46 million cardholders over charges, and against Lloyds TSB bank by 5000 shareholders over misleading statements in the acquisition of HBOS (the case was dismissed in December 2019).

  48. 48.

    Capital Market Test Case Proceedings. Federal Law Gazette 2005 I (no 50), 2437.

  49. 49.

    Dutch Civil Code, Arts. 7:900–7:910 and Dutch Judicial Code, Arts. 1013–1018. See Asser (2008), p. 17; Fleming and Kuster (2012), p. 286; Tzankova and Lunsingh Scheurleer (2009), p. 149; van der Heijden (2010), p. 197.

  50. 50.

    Code of Criminal Procedure, Arts. 63, 67. Voet (2013), 280–281.

  51. 51.

    Hodges and Voet (2018), ch 5.

  52. 52.

    Hodges (2011), p. 383, Figure 1, adapted.

  53. 53.

    A categorisation is at Hodges (2015b), p. 829. See Department for Business Innovation & Skills (2015).

  54. 54.

    Hodges and Voet (2018), pp. 160–166.

  55. 55.

    Ibid, 166–168.

  56. 56.

    Ibid, 170–173.

  57. 57.

    Ibid, 175–176.

  58. 58.

    Press release: European Commission (2013). The company proposed to pay railway companies that it does not own a one-time retroactive refund of 4% of their latest annual traction current invoice, and to provide the Commission with the necessary data to assess whether the price levels charged under the new pricing system would lead to a margin squeeze.

  59. 59.

    Financial Services and Markets Act 2000, s 404 [consumer redress scheme] and s 404F(7) [single firm scheme].

  60. 60.

    Energy Act 2013, s 144 and Sch 14. In the financial year 2015–2016, nearly £43 million was secured as a result of Ofgem enforcement investigations.

  61. 61.

    Regulatory systems that include the grant of licences to actors such as utilities or gambling enable licence conditions to be amended to require or approve of redress packages.

  62. 62.

    Consumer Rights Act 2015, Sch 5, Art 14. The enforcers covered are: Competition and Markets Authority, Trading Standards Services in Great Britain, Department for Enterprise, Trade and Investment in Northern Ireland, Civil Aviation Authority, the Northern Ireland Authority for Utility Regulation, Ofcom, Ofwat, Ofgem, Phonepay Plus, The Information Commissioner, Office of Rail Regulation, the Financial Conduct Authority, community enforcers under the Injunctions Directive, Secretary of State for Health, Department of Health, Social Services and Public Safety in Northern Ireland.

  63. 63.

    Ofcom (2017) and Communications’ Providers’ Voluntary Code of Practice for an Automatic Compensation Scheme (2017).

  64. 64.

    Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004, Art. 9.4(b).

  65. 65.

    Ibid, Art. 9.4(c).

  66. 66.

    Ibid, Art. 9.4(d).

  67. 67.

    Ibid, Art. 12.

  68. 68.

    Proposal for a Directive of the European Parliament and of the Council amending Council Directive 93/13/EEC of 5 April 1993, Directive 98/6/EC of the European Parliament and of the Council, Directive 2005/29/EC of the European Parliament and of the Council and Directive 2011/83/EU of the European Parliament and of the Council as regards better enforcement and modernisation of EU consumer protection rules, COM(2018) 185 final, 11.4.2018.

  69. 69.

    Australian Law Reform Commission (2018).

  70. 70.

    Hodges and Voet (2018), ch. 6; Hodges and Stadler (2013).

  71. 71.

    Ministry of Housing, Communities and Local Government (2019a).

  72. 72.

    Ministry of Housing, Communities & Local Government (2019b).

  73. 73.

    Hodges and Voet (2018), p. 47.

  74. 74.

    Hodges and Voet (2018), p. 75.

  75. 75.

    Macleod and Hodges (2017).

  76. 76.

    Office National d'Indemnisation des Accidents Médicaux, des affections iathrogènes et des infections nosocomiales. Article L. 1142–22 of the French Public Health Code.

  77. 77.

    Yeazell (1987), p. 41.

  78. 78.

    Hodges (2019).

  79. 79.

    Yeazell (1987), p. 287.

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    Christopher Hodges

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  1. Faculty of Law, University of Zagreb, Zagreb, Croatia

    Alan Uzelac

  2. KU Leuven, Leuven, Belgium

    Stefaan Voet

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Hodges, C. (2021). Evaluating Collective Redress: Models, Evidence, Outcomes and Policy. In: Uzelac, A., Voet, S. (eds) Class Actions in Europe. Ius Gentium: Comparative Perspectives on Law and Justice, vol 89. Springer, Cham. https://doi.org/10.1007/978-3-030-73036-9_2

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