European vs. American Class Action: discrepancy in law and economics perspective!

Abstract

This article moves on considering class action as a reasonable chance to obtain fair protection of a right or

reparation of an injustice whenever the costs of an individual action are forbidding.

The essay, however, takes a different standpoint, underlining all main problems in introducing class action in

Europe, the different experiences in Germany, Italy, Spain and France and the need of European Commission

to pursue through class actions an end to illegal activities, a reinforcement of deterrence, a chance of obtaining

a legal remedy, a compensation of victims for suffered damages.

Therefore, we look at the new Directive (EU) 2020/1828 of the European Parliament and of the Council

of 25th November 2020 on representative actions as a remedy to ensure that at Union and national level at

least one effective and efficient procedural mechanism for representative actions, for injunctive measures and for

redress measures is available to consumers in all Member States.

In this scenario, a comparison with American legal experience shows how the absence of legal procedures: a)

the pactum de quota litis, b) the self-bearing of dispute costs without moving them to the losing party; c) the

punitive damages; d) the investigation before examining the evidence under discussion; e) the decision coming

from a jury, deprives the willingness for class actions in UE.

Finally, the perspective of law and economics literature on class actions demonstrates the success of procedure

in resolving the crucial issue of risk-bearing when litigation costs appear prohibitive for individuals who decide

to act alone.