European business faces huge bills under plans to grant individuals US-style rights to sue for damages over defective products or price fixing, German industry warns on Tuesday.
The BDI, the German employers’ association, and Freshfields Bruckhaus Deringer, the law firm, will unveil a report arguing that the European Commission proposals would be costly and unnecessary.
“Strengthening private enforcement will massively increase pressure on companies to agree expensive settlements from which lawyers profit much more than consumers,” said Kurt-Christian Scheel, head of the BDI’s legal department and one of the authors of the study.
He said national systems already have enough safeguards to allow consumer redress. German companies have long opposed the plans.
Neelie Kroes, competition commissioner, wants to make it easier for victims of cartels to claim damages. But her plans were held up by German MEPs and it is unclear when she will press ahead with legislation.
Meglena Kuneva, her counterpart at consumer affairs, favours allowing consumers the opportunity to combine their complaints in a US-style class action suit.
But the BDI report says such matters should be left to individual member states. Any attempt to overlay the European approach of enforcement by public authorities with what it calls “private attorney-generals” would add to complexity and cost. “It may well be that with regard to its legal infrastructure, Europe is at a crossroads,” says the report.
