ERU, Alm.del - 2019-20 - Bilag 64: Henvendelse af 28/10-19 fra Better Finance, vedrørende forslag til Europa-Parlamentets og Rådets Direktiv om adgang til indbringelse af sager til varetagelse af forbrugernes kollektive interesser

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Collective Redress

Representative Actions for the Protection of the Collective

Interests of Consumers

As governments around the world withdraw from welfare provision and

promote long-term savings by households through the financial markets, the

protection of retail investors has become critically important.

July 2019

ERU, Alm.del - 2019-20 - Bilag 64: Henvendelse af 28/10-19 fra Better Finance, vedrørende forslag til Europa-Parlamentets og Rådets Direktiv om adgang til indbringelse af sager til varetagelse af forbrugernes kollektive interesser

About us

BETTER FINANCE, the European Federation of Investors and Financial Services Users, is the public

interest non-governmental organisation advocating and defending the interests of European citizens

as financial services users at the European level to lawmakers and the public in order to promote

research, information and training on investments, savings and personal finances. It is the European-

level organisation solely dedicated to the representation of individual investors, savers and other

financial services users.

BETTER FINANCE acts as an independent financial expertise and advocacy centre to the direct

benefit of European financial services users. Since the BETTER FINANCE constituency includes

individual and small shareholders, fund and retail investors, savers, pension fund participants, life

insurance policy holders, borrowers, and other stakeholders who are independent from the financial

industry, it has the best interests of all European citizens at heart. As such its activities are supported

by the European Union since 2012.

BETTER FINANCE has long advocated for an EU-wide collective redress mechanism for

all financial services users, including small and individual shareholders or employee

shareholders, and provided support to consumer organisations in collective redress

schemes in the field of financial services (such as

Fortis, Volkswagen AG).

BETTER FINANCE

welcomes the European Commission s EC proposal for a Directive on

collective redress actions for consumers

Collective Redress Directive

but warns on

several amendments that will diminish the scope and effectiveness of these provisions.

The Collective Redress Directive must reflect the EU innovative approach and create

a mechanism that ensures a high level of consumer protection (Art. 38 and 47 of

Charter of Fundamental Rights), equal conditions for access to justice (Art. 67 of

Treaty on the Functioning of the European Union) for the entire spectrum of

consumers in the EU, including investors and financial services users.

Contact

Stefan VOICU,

[email protected]

Aleksandra MACZYNSKA,

[email protected]

Christiane HÖLZ,

[email protected]

Guillaume PRACHE,

[email protected]

The most relevant sector concerning observed mass claims/issues is

the financial services sector

The quote on the cover page is from Niamh Moloney,

How to Protect Investors: Lessons from the EC

and UK

(2010) Cambridge University Press

See infra, p. 35.

Contents

I. Collective Redress: 1-pager presentation ............................................................................ 3

II. Position Paper on the Collective Redress Directive ............................................................. 4

III. Differences between US and EU collective redress ...........................................................17

IV. Working Paper 1: Articles 3, 5, 6 and 8 of the Directive ....................................................18

V. Working Paper 2: Article 2 of the Directive ........................................................................22

VI. Working Paper 3: Aligning the opt-out system with compensation claims ........................25

VII. Working Paper 4: Definition of consumers ......................................................................32

VIII. Working Paper 5: Private International Law applicable to Collective Redress cases .........37

IX. Working Paper 6: Consumer Protection provisions in key EU Financial law .......................42

X. Collective Redress Slide Presentation ................................................................................49

XI. EU Competence, Legal Basis and Subsidiarity ...................................................................53

The contents and views expressed in this Booklet have been endorsed by

the BETTER FINANCE Legal Committee.

I. Collective Redress: 1-pager presentation

II. Position Paper on the Collective Redress Directive

POSITION PAPER

on the Collective Redress Directive

Ref.:

Proposal for a Directive of the European Parliament and of the Council on representative actions for

the protection of the collective interests of consumers, and repealing Directive 2009/22/EC (SWD(2018)

96 final)

EXECUTIVE SUMMARY:

BETTER FINANCE welcomes

the European Commission s EC

proposal for a Directive on collective redress actions for consumers

Collective Redress

Directive

but warns on several amendments that will diminish the scope and effectiveness of

these provisions. This position paper highlights and justifies the main objections BETTER

FINANCE brings to the proposed version of the text.

The

key issues

concern:

The closed-list determining the scope of the Directive

does not cover direct individual investors

(share- and bondholders), leaving them less protected than indirect investors (e.g. fundholders).

It is paramount to add the Market Abuse Directive (MAD2), Regulation (MAR) and PEPP

Regulation in Annex I of the Directive.

A. The

scope of the Directive

(Article 2.1) discriminates EU citizens who save in directly in

shares and bonds vs. packaged investment

products

The default opt-out approach is essential to ensure the effectiveness of the procedure not only

at national level, but

most importantly

cross-border. Requiring consumers from another

Member State to explicitly give their mandate for the class action would defeat the purpose of the

Directive and contradicts the essential principle of the internal market.

In addition, in order to ensure harmonisation and equal protection for all harmed consumers

across the EU, Member States must be required

not to

demand the mandate of the individual

consumers concerned. This is referred to as an opt-out system.

B. The

opt-in system

and the

cross-border dimension of the opt-out system

detrimental to consumers

Representative associations should expressly be allowed to settle the dispute out-of-court (ADR),

also allowing the possibility to revert to mandatory jurisdiction should the settlement mechanism

fail. BETTER FINANCE suggests adding a new action to Article 5(2).

Recent case law shows that collective actions for investors or financial services users were

initiated by foundations established ad hoc. Limiting the possibility for experienced and well-

established representative organisations of consumers, savers and individual investors to create

spontaneously an organisation for collective redress procedures severely limits the scope and

effectiveness of the provisions of the Collective Redress Directive.

ADR settlements and recourse to judicial review

(Article 5(2)) and the

weakening of

representative organisations

limits consumers legal protection

This position paper is elaborated by

BETTER FINANCE,

The European Federation of Investors and

Financial Services Users.

BETTER FINANCE acts as an independent financial expertise and advocacy centre to the direct

benefit of European financial services users. Since the BETTER FINANCE constituency includes

individual and small shareholders, fund and retail investors, savers, pension fund participants, life

insurance policy holders, borrowers, and other stakeholders who are independent from the

financial industry, it has the best interests of all European citizens at heart. As such its activities

are supported by the European Union since 2012.

There is a strong need for Union intervention, on the basis of Article 114 TFEU, in order to ensure

both access to justice and sound administration of justice as it will reduce the costs and burden

entailed by individual actions

- (Amendment 2, JURI Committee).

Modernising the existing provisions under the Injunctions Directive (Directive 2009/22/EU) is

considerably needed, in particular in the field of financial services. Globalisation and increased

interconnectedness of capital markets leave an increased number of investors and financial

services users exposed to acts harming their rights and interests. In 2017, BETTER FINANCE

highlighted the numerous

cases of misselling of financial products

that affected shareholders or

investors on a cross-border basis.

Many other cases

where negligence or misconduct of the

financial industry has led to mass harm situations have occurred, such as the Swiss franc loans

(Greece, Bulgaria, Romania, Poland, Croatia to name a few) or the "unit-linked" scandals.

Some very few were able to be dealt with under the Unfair Terms Directive,

but with no common

provisions for cross-border action or compensatory claims. For the rest, it was and still is up to

national civil procedure laws to determine whether two or more cases stemming from the same

infringement of EU law can be joined together. Only five EU Member States enable citizens to

effectively use collective redress systems, while the rest have none or seriously flawed

procedures.

Providing EU consumers with an efficient and sophisticated procedure to obtain redress

collectively is of major importance. Given the lack of expertise, trust, time or resources, individuals

rarely pursue their rights or legitimate interests in court to seek for injunctive relief or

compensatory redress. However, when offered the possibility to act together, 79% of EU citizens

would be more willing to defend their rights.

These are some of the reasons for which the Collective Redress Directive must set up a robust,

flexible, and efficient collective redress mechanism for all EU citizens. With some of the

amendments proposed by the JURI Committee, the Directive will be rendered practically

inefficient.

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, OJ L 95, 21.4.1993, p. 29–34.

See BEUC, Myths a d Realities o Colle ti e Redress

https://www.beuc.eu/publications/beuc-x-2018-

048_myths_and_realities_on_collective_redress.pdf.

Ibid.

1. Scope of the Collective Redress Directive

The EC s approach to determining the scope of this harmonised procedure was to include in an

annex all Union law that, if breached, would trigger the application of the Directive. According to

Article 2(1), representative actions under this Directive can be brought only against

infringements

[…]

of the Union law listed in Annex I

Why discriminate EU citizens who save directly into EU capital markets?

This closed list approach is, first, inflexible. Should new developments

(infringements of already

existing or new legislation) occur, it requires amending the Directive (level 1 - using the same

legislative procedure) in order to bring the cases under the scope of the Collective Redress

Directive.

Second, either by mistake or intentionally, leaving out an EU legislative act means leaving out all

its addressees and beneficiaries. As is currently the case, the closed list approach completely

excludes direct investors into capital markets (securities holders) since neither of the acts

enumerated thereof concern this category of consumers. Moreover, the new PEPP Regulation,

which entered into force one year after this proposal was published, is not included either in the

list of Annex I.

While for indirect investors - in deposits, investment funds, insurance policyholders

–

there is

already a set of financial safeguards (Solvency II, the Capital Requirements Directive and

Regulation, National Deposit Guarantee Schemes), there are no comparable for direct investors,

such as shareholders and bondholders. Excluding shareholders from the scope of this Directive

means that small individual investors suffering damage by the same issuer will not be able to join

their claims together into one single action in all Member States and, by that, they would be

unjustifiably worse off that users of other (financial) services or goods. Thus, all the more reason

to include in the list Union law acts that protect direct individual investors from infringements of

EU financial regulation.

Since the Market Abuse Directive (MAD2)

and the Market Abuse Regulation (MAR)

are the only

pieces of EU legislation that provide sanctions for breaches of obligations of issuers towards

securities holder,

BETTER FINANCE strongly asks

the European Parliament and the Council of

the EU to endorse an additional amendment

including these three acts in Annex I of the

Collective Redress Directive.

Not only that the most affected retail category since the 2008 crisis has been the shareholder

class (Fortis, Dexia, Bankia, Natixis, Banca MPs, Volkswagen), but one of the central actions of the

CMU Action Plan was to increase retail investors direct participation into capital markets and

investor confidence.

Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse

(market abuse directive), OJ L 173, 12.6.2014, p. 179–189.

Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse

regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives

2003/124/EC, 2003/125/EC and 2004/72/EC, OJ L 173, 12.6.2014, p. 1–61.

2. The opt-in system and the cross-border dimension

The opt-in system is harmful to consumers and limits the beneficial effects of the Directive

Evidence brought in public consultations, NGOs research papers, and the EC s Flash

Eurobarometer show that consumers are more willing to defend their rights as part of a collective

action rather than individually. However, there are two possible ways to design a collective

redress procedure:

2.1 Opt-in system

•

From a consumer perspective, the

opt-in system

contains several

disadvantages.

In most cases,

consumers display a passive behaviour on the background of a lack of knowledge, experience,

resources (information or financial) or incentive.

Case law in financial scandals shows

striking

differences between opt-in and opt-out enforcement files.

First, an empirical observation is the participation rate: while in opt-out cases very few wish to be

excluded from the effects of a judgment (achieving, thus, a close to 100% enforcement rate), in

opt-in cases very few take the active step to participate. The coverage rate of opt-in systems can

be as low as 1.5% (Deutsche

Telekom)

and generally varies depending on how many consumer

organisations are involved.

either by way of an opt-in system, where the power of representation must be expressly

demonstrated from all concerned consumers, or

either by establishing an opt-out system, where all consumers are represented as long as they do

not explicit object to be part of the procedure.

Second, we have observed that opt-in cases feature predominantly active individual members of

consumer protection NGOs. On the other hand, opt-out cases have much higher enforcement

numbers (NCC

Closet Indexing).

What happens with passive consumers is that they are often not

aware that a collective redress procedure has been initiated and that they are required to take an

active step and sign in to become an eligible party. It gets worse where the collective redress

procedure is launched in a Member State other than their home country.

Consumer passiveness is all the more understandable as being a consumer is not a full-time job.

However, it should not be used as a means to exclude them from participating to

injunction/collective redress procedures against traders infringing EU law. Sanctioning illegal

practices and mandating compensation to all those affected also is a prerequisite for loyal

competition between traders in the economy.

However, some consumers may wish to be excluded due to several reasons, such as: they disagree

with the claims, the pleas in law, the chances of success, damages etc. However, at this moment is

very difficult to tell whether the very large pools of consumers that do not actively take part in

collective enforcement procedures are just passive or wish to pursue their rights on their own.

The

opt-out system

has the

advantage

of discerning between passive consumers and consumers

who wish to proceed differently. First, as the opt-out frame is usually at a later stage of the

procedure, it offers more time for consumers to become aware of the case, make up their minds

or take an informed decision. Second, the active behaviour of requiring exclusion from a collective

redress file is undisputed evidence that the consumer is not merely passive.

From a legal perspective, the opt-out system contains the same

constitutional safeguards

as the

opt-in system. The right to private party autonomy and the right to disposition

–

the prerogatives

the EC s proposal

and Amendment 60 of the JURI Committee at least leave open the discussion

on the opt-out system, Amendment 61 of the JURI committee definitely closes it for cases with a

transnational element.

2.2 Cross-border dimension

Therefore, BETTER FINANCE

strongly advises

the European Parliament and Council of the EU

change the wording

of the precited subparagraph

and indicate

that Member States

may not

require the mandate of the individual consumers

concerned…

The EC s

initial wording of Article 6(1)(1) offered Member States the possibility to institute such

a regime under the Collective Redress Directive. What we assume to be a brave attempt to

stimulate opt-out systems across the EU, after the failed

recommendations

of 2013,

it still falls

short of what EU citizens are in dire need as consumers for reasons of legal effectiveness and

certainty. Merely offering the possibility to allow for an opt-out system would lead to divergent

implementation of the law, different standards of access to justice and forum shopping in the EU.

to choose whether to be part of a procedure or not

–

are and can still be exercised by the individual

consumer. The opt-out merely inverses the effects of the active and express manifestation of will

and consent from inclusion to exclusion.

Where a Member State does implement the opt-out system, subparagraph 1a obliges it to require

proof of the

explicit mandate to join the representative action within the applicable time limit

harmed consumers that are not habitual residents in that jurisdiction. This new addition creates

a severe barrier to cross-border engagement and legal protection of consumers, contradicting the

essential principle of the internal market and infringing Article 26(2) TFEU

and Article 38 of the

Charter of Fundamental Rights.

A robust and effective pan-EU collective redress mechanism must grant the same rights to affected

consumers in all other jurisdictions as in the Member State where the class action takes place.

Therefore, BETTER FINANCE

strongly advises the co-legislators

to delete Amendment 61 of the

JURI Committee and impose the opt-out system across the EU for the purpose of this Directive.

3. Alternative Dispute Resolution Settlements, recourse to judicial review

and the weakening of representative organisations

Effective settlement mechanisms and representation must be ensured

3.1 ADR mechanisms

Due to administrative burdens and disadvantages mandatory jurisdictions pose (e.g. length of the

procedure) eligible entities should be expressly allowed to choose, first, to settle the dispute

through out-of-court mediation, either privately or via alternative dispute resolution (ADR)

bodies. These may present the advantage of appointing specialised arbiters, avoiding procedural

obstacles, reducing the cost of litigation, among other.

See also Csongor

Ist a Nagy, The Europea Colle ti e Redress De ate After the Europea Co

issio s

Recommendation:

O e Step For ard, T o Steps Ba k?

22 MJ 4 (2015), 530-552, 536.

Europea

issio , Co

issio Re o

e datio of

Ju e

o pri iples for i ju ti e a d

compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law

(2013/396/EU), OJ L 201/60 of 26.7.2013.

Treaty on the Functioning the European Union.

However, in case a settlement is not reached following the procedure, after a reasonable time

period, eligible entities should be expressly allowed to address the case to national courts via one

of the representative actions mentioned in Article 5(2). In order to ensure equal access to redress

mechanism across EU legal orders, this ADR settlement mechanism should be expressly provided

as a representative action in Article 5(2), through a new subparagraph c).

A good example of a practice of this kind is the Dutch WCAM statute.

The model is based on a

collective settlement which is therefore completely dependent on the other party s willingness to

settle. As the case of Volkswagen has shown, it is a useless instrument if the issuer rejects any kind

of settlement. The Dutch system could be fundamentally improved if, in case a settlement is out of

reach, the procedure could be automatically reversed into a court action. Moreover, the Dexia case

has shown that settlement procedures can also be very costly for the plaintiff s association

and

only large ones will manage to bear them, thus all the more reason to allow claimants to revert to

mandatory jurisdictions.

3.2 Weakening of representative organisations

Under the proposed version of the text (Article 4(2)

–

Amendment 49), such ad hoc created

associations would not benefit from the provisions under this Directive. On the contrary,

representative organisations are required to be established on a permanent basis and specialized

particularly in this type of litigation, creating a new class of consumer associations having the

unique purpose of initiating class action when acts of mass harm take place.

The majority of collective redress proceedings brought against infringements of investors and

financial services users interests since

have been initiated by experienced and well-

established associations representing the interests of consumers, savers and individual investors.

These organisations created spontaneously (ad hoc) another organisation to represent the

interests of consumers in a certain case. A practical example is that of

Stichting Volkswagen

Investor Claims,

established to represent the collective interests of individual shareholders of

Volkswagen AG that suffered losses as a consequence of the diesel scandal.

First, this contradicts all arguments (Recitals (4), (25) and Article 1) for laying down safeguards

against abusive litigation. If an eligible entity must prove its main purpose that of protecting the

collective interests of consumers and must function continuously, on a permanent basis, it will not

be long before class action turns into a regular activity to ensure the survivorship of these entities.

Second, the essence of collective redress is spontaneity. The Collective Redress Directive must

allow consumers to join their claims under one representative organisation when an act of mass

harm occurs. As such, a collective redress procedure is spontaneously initiated and fulfils its

Dr. Hele e a Lith, The Dut h Colle ti e Settle e ts A t a d Pri ate I ter atio al La

Eras us S hool of La ,

http://ec.europa.eu/competition/consultations/2011_collective_redress/saw_annex_en.pdf.

The WCAM came into force on

27 July 2005. It provides for collective redress in mass damages on the basis of a settlement agreement concluded between

one or more representative organisations and one or more allegedly liable parties for the benefit of a group of affected persons

to whom damage was allegedly caused. Once such a collective settlement is concluded, the parties may jointly request the

Amsterdam Court of Appeal to declare it binding. If the Court grants the request, the agreement binds all persons covered by

its terms and represented by the representative organization, except for any person who has expressly elected to opt out

within a specific period. Any person having opted out retains his right to initiate individual proceedings against the defendant.

While the proceedings regarding the binding declaration are pending, any other proceedings concerning claims in respect of

which the agreement provides for compensation are suspended at the request of the alleged liable party.

Article 4(1) of the Collective Redress Directive read in conjunction with Article 5(1) and with the proposed definition of

consumer organisation (Amendment 37) and with the deletion of paragraph (2) of Article 4 (Amendment 49).

Last but not least, this

–

and especially read together with amendments 37 and 44 of the JURI

Committee

–

will make the Directive become an instrument that can only be used by large state-

subsidised consumer representative organisations.

Hence, BETTER FINANCE

strongly advises to keep subparagraph 2 of Article 4

in the final

version of the Collective Redress Directive as proposed by the Commission.

Since, at the time of writing still, the only publicly available amendments to the Directive s text are

those voted by the European Parliament (JURI/IMCO/TRANS committees), the other key issues

analysed below will concern the amendments voted in the plenary session of 26 March 2019.

purpose once a final decision is awarded. The proposed version of the text turns around this

mechanism and forces representative organisations to outlive their purpose.

4. Other key issues

Amendment 33

–

addition of

broad consumer impact

to Article

BETTER FINANCE questions this amendment as it will create legal uncertainty and divergent

application of the law since Article 3 does not provide a definition for what

broad consumer impact

represents. Moreover, it would severely limit the scope of collective redress actions for smaller

groups of affected consumers, leaving them out from an important instrument of legal protection.

In addition, it contradicts Article 38 of the Charter of Fundamental Rights, which does not

distinguish between

narrow

and

broad

consumer interests, but requires that Union policy and law

ensures a high level of protection for all EU citizens.

Amendment 38

– addition of

in civil capacity under the rules of civil law

to Article

BETTER FINANCE warns the European Parliament of the detrimental effects this addition will

have not only to the scope of the Directive, but to the uniform application in the EU.

First, there are several legal orders across the EU where private law branch is divided into civil

law and commercial law (France, Belgium, Italy for instance). Requiring a trader to be defined as

a person acting in civil capacity may unintentionally lead to the inapplicability of the Collective

Redress Directive in those jurisdictions where the legislation included in Annex I falls under the

commercial law branch and under the rules of commercial law.

Second, this amendment aims to exclude providers of public services or services of public interest,

thus bringing an unjustified limitation to its scope. The Directive must ensure that consumers

affected by mass harm may be able to benefit from these provisions no matter the source of their

legal relationship, where the legal relationship is defined by one party acting in a professional

capacity and the other acting outside its habitual business or trade, as a consumer (B2C business).

Last, introducing a validity condition for the applicability of this Directive concerning the civil

capacity of the trader will lead to a segregation between Member States where the Directive is

applicable and Member States where the Directive is inapplicable.

Amendment 39

– addition of

data subjects as defined in Regulation (EU) 2016/679 (General Data

Protection Regulation

to Article

This amendment represents an implicit extension of the scope of application of the Directive as

defined in Article 2(1). BETTER FINANCE does not oppose the inclusion of the GDPR, but warns

that the amendment is inconsistent

with the closed-list approach and discriminatory to all other

affected consumers.

The purpose of Article 4 is to shorten the length and decrease the burden of judicial proceedings

examining the procedural standing of representative organisations by establishing an

ex-ante

administrative authorisation procedure for qualified entities. The purpose of the proceedings and

of the competent court should not be extended to examining again the

locus standi

of the already

appointed representative organisation.

Amendment 56

– addition of

the illegal practice

to Article

Amendment 67

–

addition of paragraph 4b to Article 6

Amendment 52

– addition of

Article 4

to Article

BETTER FINANCE believes that this amendment leaves the injunctive procedure devoid of

substance since a practice is considered illegal if an administrative or judicial body

a priori

sanctions it as such, thus entailing a final decision declaring the practice illegal before being able

to institute collective injunctive or compensatory action against that practice.

BETTER FINANCE believes that the second phrase of this new subparagraph attacks the substance

of civil law and civil procedure law by limiting compensatory action only to the actual loss (lucrum

cessans)

and expressly prohibiting compensation of unrealized gains (damnum

emergens)

in a

procedure under the provisions of this Directive.

This constitutes a severe limitation of legal protection for consumers in all cases where national

law allows compensation of the unrealized gains (damnum

emergens)

and will constitute a

deterrent for consumers and representative organisations to use the procedure prescribed under

this Directive for protecting their rights and interests.

Amendment 98

–

addition of paragraph 2a to Article 16

BETTER FINANCE sees the express limitation brought to cross-border representative actions

clearly inconsistent with the principles and rules laid down by EU primary law. The justification

is the same as that for Amendment 61 thereof.

5. BETTER FINANCE main amendments

Amendments to the Proposal for a

Directive of the European Parliament and of the Council on

representative actions for the protection of the collective interests of

consumers, and repealing Directive 2009/22/EC

COM/2018/0184 final

–

2018/089 (COD)

European Commission’s

proposal

BETTER

FINANCE’s proposed

amendments

Amedment 1

Annex I

–

subparagraph 46 (new)

46) Directive 2014/57/EU of the

European Parliament and of the Council of

16 April 2014 on criminal sanctions for

market abuse (market abuse directive).

Amendment 2

Annex I

–

subparagraph 47 (new)

47) Regulation (EU) No 596/2014 of the

European Parliament and of the Council of

16 April 2014 on market abuse (market

abuse regulation) and repealing Directive

2003/6/EC of the European Parliament

and of the Council and Commission

Directives 2003/124/EC, 2003/125/EC

and 2004/72/EC.

Summary justification

ANNEX I

–

List of

provisions of Union Law

referred to in Article 2(1).

Collective redress for direct investors

Article 2(1) determines the scope of

application of the Directive by referring to

disputes arising from breaches of EU law

listed in Annex I.

•

none of the EU legislative acts enumerated

in Annex I thereof cover individual direct

investors (such as shareholders, bond

holders, etc);

•

Direct investors should benefit of the same

legal protection ad indirect investors;

•

Excluding shareholders from the scope

of the proposal means that small

individual investors suffering damage by

the same issuer;

•

Moreover, it contradicts the CMU Action

Plan since it will not help regain

investors

trust and boost their confidence; the

purpose was to increase retail investor

direct participation into capital markets.

Weakening

organisations

representative

Article 4

Qualified entities

2. Member States may

designate a qualified entity

on an ad hoc basis for a

particular representative

action, at its request, if it

complies with the criteria

referred to in paragraph 1.

Proposal 1

Do not endorse Amendment 49 JURI

The majority of collective redress proceedings

brought against infringements of investors

and financial services users interests since

2008) have been initiated by ad hoc

organisations to represent the interests of

consumers in a certain case:

•

Under the proposed version of the text

(Amendment 49) such ad hoc created

associations would not benefit from the

provisions under this Directive;

•

The essence of collective redress is

spontaneity, thus it must allow consumers

to join their claims under one ad hoc

representative organisation when an act of

mass harm occurs;

•

This contradicts all arguments (Recitals (4),

(25) and Article 1) for laying down

safeguards against abusive litigation. If an

eligible entity must prove its main purpose

that of protecting the collective interests of

consumers and must function continuously,

on a permanent basis, it will not be long

before class action turns into a regular

activity to ensure the survivorship of these

entities;

•

This

–

and especially read together with

amendments 37 and 44 of the JURI

Committee

–

will make the Directive

become an instrument that can only be used

by large state-subsidised consumer

representative organisations.

Article 5

Representative actions for

the protection of the

collective interests of

consumers

Member States shall ensure

that qualified entities are

entitled

bring

representative

actions

seeking

the

following

measures:

(a) an injunction order as

an interim measure for

stopping the practice or, if

the practice has not yet

been carried out but is

imminent, prohibiting the

practice;

(b) an injunction order

establishing

that

the

practice constitutes an

infringement of law, and if

necessary, stopping the

practice or, if the practice

has not yet been carried out

but

imminent,

prohibiting the practice.

In order to seek injunction

orders, qualified entities

shall not have to obtain the

mandate of the individual

consumers concerned or

provide proof of actual loss

or damage on the part of

the consumers concerned

Amendment 3

Article 5, paragraph 2, letter c) (new)

c) collective private settlement, through

administrative

dispute

resolution

procedures established according to

Directive 2013/11/EU, by which both

actual damages and unrealised gains can

be compensated, having also the

possibility to reverse to either of the

representative actions listed above in

letters a) and b) or to another procedural

mean according to national law, if within

a reasonable time frame an agreement is

not reached”.

For the purposes of letter c) above, the

appointed dispute resolution arbiter shall

establish, at the beginning of the

procedure, the reasonable time frame,

taking into account both parties’ opinions

and giving due consideration to the scale,

nature and complexity of the case.

In using the representative action under

letter c) above, qualified entities shall not

have to obtain the mandate of the

individual consumers concerned, even

where concerned consumers are not

habitual residents of the home Member

State to the procedure.

In case of injunction orders they shall not

provide proof of actual loss or damage on

ADR settlements as representative actions

Article 5 of the Directive lays down the types

of actions that can be used in collective

redress for injunctive and compensatory

measures.

•

There are several advantages to alternative

dispute resolution (ADR) mechanisms,

including reduced time-length, specialised

arbiters, simplified procedure;

•

Authorised entities should be expressly

allowed to first try to settle the case out-of-

court;

•

In order to avoid unnecessary delays,

parties should be directed to alternative

dispute resolution as per Directive

2013/11/EU;

•

The purpose of ADR settlements should not

be to deter representative associations from

entering into negotiations, nor to force for

an unjust settlement;

•

Thus, the parties subject to an ADR

settlement should have the possibility, if

within a reasonable time frame a resolution

is not reached, to revert the case to national

courts;

•

In line with the opt-out system,

representative associations should not be

required to obtain the explicit mandate of all

consumers concerned.

intention

negligence on the part of

the trader.

the part of the consumers concerned or of

intention or negligence on the part of the

trader

Amendment 4

Article 6, paragraph 1, subparagraph 1

1. For the purposes of Article 5(3), Member

States shall ensure that qualified entities are

entitled to bring representative actions

seeking a redress order, which obligates the

trader to provide for, inter alia,

compensation, repair, replacement, price

reduction,

contract

termination

reimbursement of the price paid, as

appropriate. A Member State

may not

require the mandate of the individual

consumers concerned before a declaratory

decision is made or a redress order is issued.

Opt-in system

Consumers are more willing to defend their

rights as part of a collective action rather than

individually.

•

Consumers are often not aware that

collective redress has been initiated and

that they are required to take an active

step and sign in to become an eligible

party, especially when it takes place in

another Member State;

•

Consumers are sometimes passive; this

passiveness should not be used as a means

to exclude them from participating to

collective redress procedures;

•

EU consumers need an opt-out system,

also for reasons of legal effectiveness and

certainty.

•

Merely offering the possibility to allow for

an opt-out system would lead to divergent

implementation of the law.

Article 6

Redress measures

1. For the purposes of

Article 5(3), Member States

shall ensure that qualified

entities are entitled to

bring

representative

actions seeking a redress

order, which obligates the

trader to provide for, inter

alia, compensation, repair,

replacement,

price

reduction,

contract

termination

reimbursement of the price

paid, as appropriate. A

Member State may require

the mandate of the

individual

consumers

concerned

before

declaratory decision is

made or a redress order is

issued.

Article 16

Cross-border representative

actions

Amendment 5

Article 16, subparagraph 2a (new)

2a. Member States must ensure equal

conditions to consumers other than those

habitually resident to access a collective

redress procedure initiated in their

jurisdiction. The provisions of Article 6,

paragraph 1, shall apply mutatis

mutandis

Cross-border dimension

The current wording of Article 6(1) allows

Member States to adopt an opt-out system.

•

If a Member State implements an opt-out

system, it would create discriminatory

conditions to access to justice for residents

of other Member States;

•

This new addition creates a severe barrier

to cross-border engagement and legal

protection of consumers, contradicting the

essential principle of the internal market

and infringing Article 26(2) TFEU

and

Article 38 of the Charter of Fundamental

Rights.

Treaty on the Functioning the European Union.

6. Other key amendments

European

Commission’s Proposal

Article 2

Scope

1. This Directive shall

apply to representative

actions brought against

infringements by traders

of provisions of the Union

law listed in Annex I that

harm or may harm the

collective interests of

consumers. It shall apply

to domestic and cross-

border

infringements,

including where those

infringements

have

ceased

before

the

representative action has

started or before the

representative action has

been concluded.

Article 3

Definitions

trader means any

natural person or any

legal person, irrespective

of whether privately or

publicly owned, who is

acting, including through

any other person acting in

their name or on their

behalf, for purposes

relating to their trade,

business,

craft

profession;

Article 3

Definitions

collective interests of

consumers

means the

interests of a number of

consumers;

Amendment 33

–

Article 2

–

paragraph 1

1. This Directive shall apply to representative

actions brought against infringements

with a

broad consumer impact

by traders of

provisions of the Union law listed in Annex I

that protect

the collective interests of

consumers. It shall apply to domestic and cross-

border infringements, including where those

infringements have ceased before the

representative action has started or before the

representative action has been concluded.

JURI Amendment

BETTER FINANCE Amendment

Endorse EC initial proposal

1. This Directive shall apply to representative

actions brought against infringements by

traders of provisions of the Union law listed in

Annex I that harm or may harm the collective

interests of consumers. It shall apply to

domestic and cross-border infringements,

including where those infringements have

ceased before the representative action has

started or before the representative action has

been concluded.

Amendment 38 -

Article 3

–

paragraph 1

–

point 2

trader means any natural person or any

legal person, irrespective of whether privately

or publicly owned, who is acting

in civil

capacity under the rules of civil law,

including

through any other person acting in their name

or on their behalf, for purposes relating to their

trade, business, craft or profession;

(

trader means any natural person or any

legal person, irrespective of whether privately

or publicly owned, who is acting, including

through any other person acting in their name

or on their behalf, for purposes relating to

their trade, business, craft or profession;

Endorse the EC initial proposal

Amendment 39 -

Article 3

–

paragraph 1

–

point 3

collective interests of consumers means the

interests of a number of consumers

or of data

subjects

defined

Regulation(EU)2016/679 (General Data

Protection Regulation);

Amendment 52 -

Article 4

–

paragraph 5

5. The compliance by a qualified entity with the

criteria referred to in paragraph 1 is without

prejudice to the

duty

of the court or

administrative authority to examine whether

the purpose of the qualified entity justifies its

taking action in a specific case in accordance

with

Article 4 and

Article 5(1).

Endorse EC initial proposal

collective interests of consumers means

the interests of a number of consumers;

Article 5

Representative actions for

the protection of the

collective interests of

consumers

5. The compliance by a

qualified entity with the

criteria referred to in

paragraph 1 is without

Endorse EC initial proposal

5. The compliance by a qualified entity with

the criteria referred to in paragraph 1 is

without prejudice to the

right

of the court or

administrative authority to examine whether

the purpose of the qualified entity justifies its

taking action in a specific case in accordance

with Article 5(1).

prejudice to the

right

the

court

administrative authority

to examine whether the

purpose of the qualified

entity justifies its taking

action in a specific case in

accordance with Article

5(1).

Article 5

Representative actions for

the protection of the

collective interests of

consumers

(a) an injunction order as

an interim measure for

stopping the practice or, if

the practice has not yet

been carried out but is

imminent, prohibiting the

practices;

N/A.

Amendment 67 -

Article 6

–

paragraph 4 b

(new)

4 b. In particular, punitive damages, leading

to overcompensation in favour of the claimant

party of the damage suffered, shall be

prohibited. For instance, the

compensation awarded to consumers harmed

collectively shall not exceed the amount owed

by the trader in accordance with the

applicable national or Union law in order to

cover the actual harm suffered by them

individually.

Endorse EC initial proposal

4 b. In particular, punitive damages, leading

to overcompensation in favour of the

claimant party of the damage suffered, shall

prohibited.

For

instance,

the

compensation awarded to consumers

harmed collectively shall not exceed the

amount owed by the trader in accordance

with the applicable national or Union law in

order to cover the actual harm suffered by

them individually.

Amendment 56 -

Article 5

–

paragraph 2

–

subparagraph 2

–

point a

(a) an injunction order as an interim measure

for stopping the

illegal

practice or, if the

practice has not yet been carried out but is

imminent, prohibiting the

illegal

practices;

Endorse EC initial proposal

(a) an injunction order as an interim measure

for stopping the practice or, if the practice has

not yet been carried out but is imminent,

prohibiting the practices;

III. Differences between US and EU collective redress

IV. Working Paper 1: Articles 3, 5, 6 and 8 of the Directive

BETTER FINANCE Working Paper 1

Targeted Provisions on the Proposal for a Directive on

Representative Actions for the Protections of the Collective Interests

of Consumers

(2018/0089 COD)

Ref.:

Articles 3 (definitions), 5 (representative actions), 6 (redress measures), and 8

(settlements)

of the Proposed Directive (COM/2018/0184 final)

Date:

11 April 2019

BETTER FINANCE, the European Federation of Investors and Financial Services Users, is the public

interest non-governmental organisation advocating and defending the interests of European citizens

as financial services users at the European level to lawmakers and the public in order to promote

research, information and training on investments, savings and personal finances. It is the one and

only European-level organisation solely dedicated to the representation of individual investors,

savers and other financial services users.

BETTER FINANCE acts as an independent financial expertise and advocacy centre to the direct

benefit of European financial services users. Since the BETTER FINANCE constituency includes

individual and small shareholders, fund and retail investors, savers, pension fund participants, life

insurance policy holders, borrowers, and other stakeholders who are independent from the financial

industry, it has the best interests of all European citizens at heart. As such its activities are supported

by the European Union since 2012.

Contact:

Stefan Voicu,

[email protected]

Christiane Hölz,

[email protected]

Aleksandra Maczynska,

[email protected]

Guillaume Prache,

[email protected]

This Working Paper provides a targeted analysis on several provisions of the European

Commission s EC

Proposal for a Directive of the European Parliament and of the Council on

representative actions for the protection of the collective interests of consumers, and repealing

Directive 2009/22/EC,

hereinafter Collective Redress Directive or CRD . The approach of this

paper is to scrutinize the initial solution tabled by the EC, the views adopted by the European

Parliament (EP) and shed light on the potential benefits or disadvantages for the Single Market

and the right to access to justice for the European citizen.

The Collective Redress Directive must reflect the EU innovative approach and create a

mechanism that ensures a high level of consumer (Art. 38 Charter of Fundamental Rights),

equal conditions for access to justice (Art. 67 Treaty on the Functioning of the European

Union) for the entire spectrum of consumers in the EU, including investors and financial

services users.

Below we lay down the initial, amended texts and the issues identified in relation to Articles 3, 5,

6 and 8 of the Directive.

Defining a consumer organization

as a group

that seeks to protect consumers' interests from

illegal acts or omissions committed by traders

unneccessarily narrows the scope of eligible

organisations without any benefits to the Directive s aim:

a. it incentivizes litigation as an activity or business model, since the purpose of most

consumer organisations is to represent, advocate and protect the interests of their

constituent group, without a focus on illegal acts;

b. it restricts litigation to illegal acts or omissions committed by traders while the

Directive encompasses any infringements of provisions of Union law listed in

Annex I that harm or may harm the collective interests of consumers , see Article

2 (1);

c. in line with pt. a, it excludes from the scope of the Directive the majority of

consumer organisations, general or specialized; and, as such

Article 3

Definitions

it goes against the two principles of granting an effective tool of private enforcement of

collective rights and avoiding creating consumer litigation as a permanent, self-standing

practice.

Defining a trader

as a natural or legal person who acts

in civil capacity under the rules of

civil law

excludes from the scope of the Directive:

a. all providers of goods or services which, under national law, are not endowed with

civil capacity,

regardless of their domain of activity;

b. all consumer-related activities in jurisdictions with a dual system of civil law,

divided between

civil

and

commercial

contracts and counterparties.

Defining the material scope

of the Directive

Union and national law adopted to protect

consumers

will lead to:

a. divergent interpretation and application of the law between courts of the same

jurisdiction and between Member States;

COM/2018/0184 final - 2018/089 (COD).

exclude from its scope all obligations of traders which

are not specifically

directed at consumer protection but which, if breached, may lead to significant

mass harm situations;

e.g.: the double-cap equity trading volume limit on unregulated markets (OTC, dark pools) is

aimed at preserving market integrity and stability, but adjacently affects investors since, if

breached, it distorts the mechanism of price formation.

Article 5

Representative actions for the protection of the collective interests of

consumers

1. The addition to paragraph (1) of Article 5, read in conjunction with the deletion of Article

4(2), weakens the position of representative organisations against breaches of Union law by

traders and does not serve the purpose of avoiding abusive litigation or ensuring an effective

tool for harmed consumers:

in the field of financial services, the past

years experiences have shown that it

was either ad-hoc established entities or investor-protection organisations

coupled with ad-hoc established entities that have brought collective redress

actions against mass harm practices;

b. the ad-hoc establishment of representative organisations serves as an additional

proof of the good faith of litigation and true objective of consumer protection since

it can occur only when an actual mass harm results in practice;

c. ad-hoc established organisations have served the purpose of representing classes

of consumers that were not represented by other long-established organisations

in the same case, ensuring an effective and exhaustive remedy for all affected

members of the group;

e.g.:

the Fortis Case Settlement

–

Stichting Fortis Investor Claims;

the Volkswagen AG shares case

–

Stichting Volkswagen Investor Claims;

e.g.: in Slovenia, Bulgaria, Greece, Denmark

–

to name a few

–

there are only shareholder or

insurance policyholders associations, but none

dedicated to retail investors (fund investors).

d. ad-hoc established organisations may serve the purpose of defending the

collective interests of the harmed group in those fields of Member States where an

already-existing representative organization is not established;

2. The deletion of paragraph (4) of Article 5 does not serve any purpose:

a. it does not prevent abusive litigation;

it makes the procedure under this Directive ineffective, lengthy and costly since it

separates injunctive orders (relief) from compensatory orders (redress), forcing

representative organisations to first go through the entire procedure of an

injunctive award and then, separately, ask for compensation of consumers,

which

contravenes to the fundamentals of collective litigation and to the sound

administration of justice.

Article 6

Redress measures

1. The addition of a new paragraph (1a) creates uneven conditions for access to justice on a

cross-border

basis and stimulates forum shopping :

a. if a Member State chooses to allow, at national level, an opt-out system, but the

Directive imposes the individual mandate of consumers harmed from other

Member States (opt-in), it will prove in practice more difficult and less effective to

cover all consumers harmed;

b. if both Member States A and B allow for an opt-out system at national level, but

the action is initiated in Member State A, consumers affected in Member State B

will have a disadvantageous position compared to the conditions set by their own

Member State, thus the Directive

creates a conflict between the levels of

protection at Member State level;

c. imposing uneven levels of access to justice based on the extraneity element goes

against Article 67(4) and Articles 8, 12, 18, and 26(2) of the Treaty on the

Functioning of the European Union and Articles 20 and 47 of the Charter of

Fundamental Rights of the European Union;

d. for those representative organisations that have a cross-border or pan-EU scope

of coverage or representation, these amendments incentivize forum shopping in

those cases governed by special jurisdiction under the Brussels I Regulation since

it allows differences between opt-in and opt-out systems at Member State level.

2. The deletion of paragraph (2) eliminates the possibility of due and full compensation of

harmed consumers in those cases where the harm, resulting from a similar legal relationship

with the same counterparty, requires a different analysis of the damages. In fact, it stimulates

representative organisations not to choose the mechanism provided by this Directive and try

enforcing the rights of the harmed group via available national procedures or via individual

claims.

3. The deletion of paragraph (3) eliminates the possibility:

a. to obtain collective redress for small claims, constituting an unjustified

discrimination between affected consumers;

b. for the reasons specified in Recital (3), it renders ineffective and useless consumer

protection rights that do not have a high value.

Article 8 Settlements

BETTER FINANCE proposes to add an ADR solution that would be fit for purpose. Consumers,

through representative organisations, must have be able to choose to settle via an out-of-court

procedure to which

the trader must be bound, and with certain safeguards attached:

•

the ADR mechanism must also provide for an opt-out system, insofar as affected

consumers that are not satisfied with the settlement reached can individually claim and

enforce their rights;

•

the Settlement Agreement should be subject to a court of law s validation and approval.

Encompassing the mechanism provided under this Directive with an ADR alternative for

consumers would:

eliminate the risk of forum shopping ;

ensure equal and effective protection

of all members of the harmed group, even with opt-in systems provided for judicial proceedings;

foresee cost-efficient and time-economic settlement of cases; make less burdensome the

enforcement of the award.

V. Working Paper 2: Article 2 of the Directive

BETTER FINANCE Working Paper 2

Targeted Provisions on the Proposal for a Directive on

Representative Actions for the Protections of the Collective Interests

of Consumers

(2018/0089 COD)

Ref.:

Article 2,

Material Scope of the Directive

(COM/2018/0184 final)

Date:

6 May 2019

BETTER FINANCE, the European Federation of Investors and Financial Services Users, is the public

interest non-governmental organisation advocating and defending the interests of European citizens

as financial services users at the European level to lawmakers and the public in order to promote

research, information and training on investments, savings and personal finances. It is the one and

only European-level organisation solely dedicated to the representation of individual investors,

savers and other financial services users.

BETTER FINANCE acts as an independent financial expertise and advocacy centre to the direct

benefit of European financial services users. Since the BETTER FINANCE constituency includes

individual and small shareholders, fund and retail investors, savers, pension fund participants, life

insurance policy holders, borrowers, and other stakeholders who are independent from the financial

industry, it has the best interests of all European citizens at heart. As such its activities are supported

by the European Union since 2012.

Contact:

Stefan Voicu,

[email protected]

Christiane Hölz,

[email protected]

Aleksandra Maczynska,

[email protected]

Guillaume Prache,

[email protected]

This Working Paper provides a targeted analysis on several provisions of the European

Commission s EC

Proposal for a Directive of the European Parliament and of the Council on

representative actions for the protection of the collective interests of consumers, and repealing

Directive 2009/22/EC,

hereinafter Collective Redress Directive or CRD . The approach of this

paper is to scrutinize the initial solution tabled by the EC, the views adopted by the European

Parliament (EP) and shed light on the potential benefits or disadvantages for the Single Market

and the right to access to justice for the European citizen.

Certain rules are key on defining a robust and effective mechanism for consumer redress, while

also striking a fair balance between the diverging interests and avoiding abusive litigation.

The Collective Redress Directive must reflect the EU innovative approach and create a

mechanism that ensures a high level of consumer (Art. 38 Charter of Fundamental Rights),

equal conditions for access to justice (Art. 67 Treaty on the Functioning of the European

Union) for the entire spectrum of consumers in the EU, including investors and financial

services users.

Below we lay down the issues identified in relation to Articles 2 of the Directive.

Article 2

Scope

This closed list approach, as referred to in academic literature, has several disadvantages:

•

The material scope of the Directive is delimited by the first paragraph of Article 2, which refers to

a set of EU law provisions contained in Annex I:

This Directive shall apply to representative actions

brought against infringements by traders of provisions of the Union law listed in Annex I that harm

or may harm the collective interests of consumers

First, it is inflexible and:

prevents any new cases that appear, and do not strictly fall under one of the

legislative acts listed in Annex I, to be brought under the scope of the Directive and

of EU law, making the mechanism provided in Articles 4, 5, 6 and 8to be practically

effective;

in order to (rightfully) extend the scope of application of the Directive, it requires

explicit legislative referral in new Directives and Regulations to the provisions of

this Directive or, even worse, it requires an amendment (Article 289

et seq.

TFEU).

Second, it is incomplete,

direct investors

(shareholders, bondholders employee

shareholders) are currently

excluded

from the scope of the Directive:

by not expressly including the Market Abuse Directive

and Regulation

in Annex

I, the legal protection offered to consumers at EU level to collectively enforce their

rights is not accorded to direct investors.

it creates an unjustified imbalance with the legal protection offered to other,

indirect investors (in funds, insurances, pensions, structured products, banking

products) and consumers in general.

•

COM/2018/0184 final - 2018/089 (COD).

of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse

(market abuse directive), OJ L 173, 12.6.2014, p. 179–189.

Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse

regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives

2003/124/EC, 2003/125/EC and 2004/72/EC Text with EEA relevance, OJ L 173, 12.6.2014, p. 1–61.

Directive 2014/57/EU

The Capital Markets Union (CMU) Action Plan

states that the EU household is at the core of an

integrated and efficient single market for financial services. The initial CMU Action Plan

mentioned:

•

An exclusion of direct individual investors is all the more incomprehensible as retail investors,

when buying shares or bonds, are normally

acting for purposes which are outside their trade,

business, craft or profession

and by that fall within the definition of consumer provided in Article

3(1) of the Directive.

This target has not been taken into account by the New Deal for Consumers.

On the contrary: a

prominent category of consumers is excluded from the scope of the Directive. An EU collective

redress system covering also individual shareholders is a must. If the EU truly wants to deliver on

the Capital Markets Union it needs to restore individual and public confidence in the financial

services market and to enforce legislation in the area of investor protection.

Albeit these ambitious initiatives of the European Commission with the CMU Action Plan and the

New Deal for Consumers, the mechanism under this Directive falls short from providing a

practically efficient and flexible redress procedure to allow all EU consumers to enforce their

rights, especially since a considerable part of them is

still excluded

from the list of Annex I after

the European Parliament first reading.

retail savings

held

directly

or indirectly through asset managers, life assurance companies

and pension funds

are key to unlocking capital markets

;

for retail investors saving for the future, greater investor confidence, transparency,

certainty and choice can help to make the right investments

;

Therefore, the Council of the EU should include in Annex I the Market Abuse

Directive (MAD2) and the Market Abuse Regulation (MAR) in order to cover as well

direct investors, such as equity investors, employee shareowners or bondholders.

Europea Co

issio , Co

u i atio

from The Commission to the European Parliament, the Council, the European

E o o i a d So ial Co

ittee a d the Co

ittee of the Regio s: A tio Pla o Buildi g a Capital Markets U io

COM/

fi al , herei after CMU A tio Pla .

CMU Action Plan, p. 5, emphasis added.

Ibid.

Europea Co

issio , Co

u i atio fro the Co

issio to the Europea Parlia e t, the Cou il a d the Europea

E o o i a d So ial Co

ittee: A Ne Deal for Co su ers COM/

fi al .

VI. Working Paper 3: Aligning the opt-out system with compensation claims

BETTER FINANCE Working Paper 3

Targeted Comments on the Proposal for a Directive on

Representative Actions for the Protections of the Collective Interests

of Consumers

(2018/0089 COD)

Ref.: Aligning the opt-out system with compensation claims

Date:

9 May 2019

BETTER FINANCE, the European Federation of Investors and Financial Services Users, is the public

interest non-governmental organisation advocating and defending the interests of European citizens

as financial services users at the European level to lawmakers and the public in order to promote

research, information and training on investments, savings and personal finances. It is the one and

only European-level organisation solely dedicated to the representation of individual investors,

savers and other financial services users.

BETTER FINANCE acts as an independent financial expertise and advocacy centre to the direct

benefit of European financial services users. Since the BETTER FINANCE constituency includes

individual and small shareholders, fund and retail investors, savers, pension fund participants, life

insurance policy holders, borrowers, and other stakeholders who are independent from the financial

industry, it has the best interests of all European citizens at heart. As such its activities are supported

by the European Union since 2012.

Contact:

Stefan Voicu,

[email protected]

Christiane Hölz,

[email protected]

Aleksandra Maczynska,

[email protected]

Guillaume Prache,

[email protected]