--- CHECK AGAINST DELIVERY ----
Ladies and gentlemen,
Competition, freedom of contract and freedom of choice based on "perfect" information are the driving forces behind the theory of perfectly functioning economy.
That said, we know that markets and people are not "perfect"!
So we end up with unfair commercial practices leading to unfair competition, uneven perception of information and unequal bargaining power.
We - the legislators together with enforcement authorities, European Supervisory Authorities, attorneys and consumer advocates have to ward off market failure and inequalities.
I am delighted to see that so many of these experts are present in the room today.
[Collective redress]
One way to fight off unfair commercial practices is collective redress, the main topic of my speech today.
I believe that collective redress is a very powerful mechanism.
We can in consumer law use various mechanisms to prevent mass harm to consumers but when they have not worked we could use collective redress to bring appropriate compensation to victims.
[The Recommendation on Collective Redress]
In its Recommendation of 2013 the Commission invited Member States to set up collective redress mechanisms for both injunctive and compensatory purposes.
We stressed that collective redress should help achieve two equally important goals:
- improving access to justice in mass harm situations and
- offering protection against abusive litigation.
[Assessing the Recommendation]
Four years have gone by since our Recommendation was adopted.
The time has come to assess how well it has been implemented by all Member States.
For now we are focussing on the laws in place in the Member States.
This gives us an overview of how the legislative landscape has changed over the past years and the extent to which these developments are in line with the Recommendation.
But our work does not stop here.
We also want to see how national systems meet – or do not meet - the goals of the Recommendation, on basis of how they deal with mass harm situations.
Financial services are one of the areas of the economy where mass harm situations can occur.
We will therefore base part of our assessment on cases stemming from that specific area.
How will we go about collecting data?
Well, to collect the necessary data we will first rely on the input of Member States.
We will also launch a public consultation shortly, calling for testimonials from stakeholders who went through mass harm situations.
We will ask them for concrete information on litigation as well as on other forms of dispute resolution, where groups obtained injunction or compensation.
We will also enquire about cases where claimants got no redress at all or where abusive litigation occurred.
[The difficulties in obtaining redress]
There are indeed difficulties in seeking redress in the EU.
First of all, there is no harmonized compensatory collective redress.
Collective actions are possible in some Member States while in others, victims of unfair practices are left to fend for themselves.
Second, collective actions can be difficult and very expensive to launch.
In countries where laws on collective actions have recently been introduced, organisations representing claimants – such as your organisations - may not yet have enough experience to launch this type of legal proceedings, collect the necessary pieces of evidence and find the necessary funds.
[The Volkswagen scandal]
Clearly the Volkswagen scandal is the epitome of the problems consumer organisations face when seeking redress for their clients.
In September last year Commissioner Jourová met with some of them in Brussels to discuss the big issues at hand.
First, they told her that a lack of information from the trader made it difficult to calculate the loss and harm caused to consumers, therefore reducing the volume of evidence for court.
Second, as the Volkswagen case is a highly technical one, the organisations explained that they had to hire costly experts to start off legal actions, which strained their financial resources.
In Spain, Italy or Belgium, consumer organisations are currently dealing with about 10 000 cases.
However, there are - as a whole - 8.5 million faulty cars across Europe.
This put some organisations off launching legal proceedings as they did not have the necessary financial and staff resources to go to court.
[Actions at EU level to make collective redress easier]
The assessment of our Recommendation on Collective Redress has not yet yielded its findings.
That's why I can't yet say whether we will take further action at European level to make collective redress easier for all to use.
However, "collective redress" is a broad concept that includes both claims for compensations and an injunction mechanism to stop breaches of EU Consumer law.
For almost 20 years now, we have used injunctions in consumer law.
But injunctions do not only apply to consumer law.
They also apply to financial services where mass harm situations also occur.
I must say that I am gravely disappointed by the practices of some European banks, especially in consumer mortgage loans.
Unfair contract terms concerning, for example, 'floor clauses' for interest rates, early repayments or unilateral changes to contracts have caused much distress to many consumers, especially in Spain and Hungary.
It is a good thing that we can rely on the Unfair Contract Terms Directive of 1993!
I admit: it's quite an old directive!
But it still has teeth to fight off those illegal practices, ignored for too long by national courts - one reason for this being that most consumers could not and, still cannot afford to take their cases to court.
As we did last year with the updated Guidance on the Unfair Commercial Practices Directive, I think it is high time we drafted up a thorough guidance on the Unfair Contract Terms Directive.
It will help to spread the broad case-law of the European Court of Justice, in particular on the duty of judges to apply consumer law on their own motion.
Better knowledge of this principle, by judges and other legal experts, is likely to improve the private law enforcement of consumer law.
[Fitness Check of the Injunctions Directive – among others]
Later this month the Commission will publish a report on the Fitness Check of EU consumer and marketing law, including the Injunctions Directive.
The Fitness Check aims to assess among other things the effectiveness, the coherence and the EU added value of the directives under examination.
One of the conclusions of the Fitness Check is that injunctions are a major enforcement tool of EU consumer law.
However the Fitness Check also shows that the use and effectiveness of injunctions varies across Europe.
In short, there is room for making this instrument more effective.
I think that business associations could play a bigger role as 'market watchdogs' and seek injunctions against traders that mislead consumers or use unfair practices.
It is indeed not acceptable that a handful of rogue traders should blacken the reputation of a majority of law-abiding traders.
Laws on compensatory collective redress and injunctions must be enforced by all to protect weaker parties and those who play by the rules.
Ladies and Gentlemen,
I now turn to the participants of the first panel, who use and apply these rules.
I look forward to hearing your views on how effective our rules are and what can be done to make them work better for the sake of our consumers, our traders and our economy.
Thank you.
--- CHECK AGAINST DELIVERY ----