Opt in vs. Opt out

1. Opt invs.Opt out Emmanuel Gybels

2. Introductionary remark : there is not one answer to this question – approach varies depending on type of claim and area of the law

3. Opt out collective redress : advantages • Access to Legal System • Note that I did not say « Access to Justice » • It is undeniable that a great number of claims are not brought – distance, cost, limited amount of claim, language, • If it is true that a number of claims are brought, successfully, in an individual manner, or according to existent framework, it is simply unknown how many are not; • One can only note that private enforcement is something that works in the US (notably in AT) and is not working in EU; • Efficiency • It simply cannot be denied that it is more efficient if all claims pertaining to the same issue, in various jurisdictions, brought by numerous parties are grouped together – less court time, less lawyers, one proceeding, etc • Increased compliance by corporations • A more efficient redress system/private enforcement brings increased compliance • Corporations or trade associations who are opposing this represent the wrongdoers. The rightdoers should not be afraid. If sufficiently frightening will not risk infringement

4. Optout advantages • Settlement • A centralised class approach brings, with the exception of people opting out, the possibility of final settlements, turning the page, incentive to settle; • More efficient competition • Increased compliance brings a level playing field in which all corporations, large and small, national or multinational, have to comply with the same rules and competitive advantages • It benefits mainly small corporations, majority in EU • Reality • 99% of claims would not be brought if no opt out system

5. Issues / Challenges • Concept is alien to some fundamental principles of European legal systems • « Nul ne plaide par procureur » • Art. 6 ECHR • Everybody is entitled to defend his own case; • What is intrinsically wrong with private enforcement /collective redress? • Technical solutions can be found • Damages • Treble / Punitive damages • Again, this is parallel with US antitrust rules, where the law forces judges to pronounce treble damages in certain cases, because it is considered to be crucial to economic life; • If the only incentive is to pay damages suffered, this is not really a threat; • Treble damages are rarely paid – case is settled before trial – treble damages are first to go. • Civil Jury • Lots of the astronomical damages are due to fact that there are civil juries – this is not our tradition – we should not install them

6. Challenges / Issues • Procedure • Jurisdiction/language/speed/ cost efficiency … • How is this going to be organized; how will we harmonize procedural differences of various EU countries • Evidence gathering / discovery / shift of the burden of proof • Fear of discovery type actions and associated cost and business secrets – could be circumvented by shift of burden of proof – once wrongdoing plausible defendant needs to make his case; AT proceedings– commission file; • Lawyers / Client Relationship / Fees • Most of these issues are ethical – let’s change the ethical rules • Ownership of the case – again – fear of US opt out system – there is an opt out – maybe should make it easier – importance of information / advertising ? • Contingency fees • This type of cases requires, per definition, high investments (experts, travel, document reviews, pleadings, etc. …), unless the authorities are prepared to fund it will naturally come from lawyers/third party financing • However, this can be curtailed. It would be hypocrisy to think that is not circumvented right now.

7. Opt in Opt out : conclusion • Misconception : opt out automatically results in US type litigation excesses • Opt in : at present stage of development will only work in very limited circumstances; practical adjustments will be needed to make it successful