The Preventive Function of Collective Actions for Damages in Consumer Law

26 Pages Posted: 4 Mar 2008 Last revised: 8 Aug 2010

See all articles by Roger van den Bergh

Roger van den Bergh

Erasmus University Rotterdam (EUR) - Erasmus School of Law

Louis T. Visscher

Erasmus University Rotterdam (EUR) - Erasmus School of Law; Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics

Abstract

From a deterrence perspective, private enforcement of consumer law can be insufficient for several reasons. Individual consumers may find it too costly to start a lawsuit ('rational apathy') or they may not even know that an infringement has occurred ('information asymmetry'). If public enforcement is not available, or if the budget of public authorities is limited and used for other purposes, the problem of under-enforcement will persist. Collective actions may be able to mitigate these problems. If many consumers can join their claims, the costs per claim decrease so that the rational apathy problem might be overcome. If consumer associations have standing, they might be able to acquire better information regarding infringements than individual consumers are able to do. However, collective actions pose problems of their own. The leading plaintiff or the organization issuing the collective action could try to advance its own interests, rather than furthering overall consumer interests. Moreover, a large-scale lawsuit might harm the reputation of the defendant and thus create the possibility of 'frivolous suits'. The paper discusses a number of possibilities to overcome these problems. Ultimately, private and public enforcement will need to co-exist, since collective actions are not a perfect instrument to achieve optimal deterrence.

Keywords: international law, mass claims, consumer law

Suggested Citation

van den Bergh, Roger and Visscher, Louis T. and Visscher, Louis T., The Preventive Function of Collective Actions for Damages in Consumer Law. Erasmus Law Review, Vol. 1, No. 2, 2008, Available at SSRN: https://ssrn.com/abstract=1101377

Roger Van den Bergh (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands
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HOME PAGE: http://www.frg.eur.nl/rile/vdbergh.htm

Louis T. Visscher

Erasmus University Rotterdam (EUR) - Rotterdam Institute of Law and Economics ( email )

Burgemeester Oudlaan 50
PO box 1738
Rotterdam, 3000 DR
Netherlands

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands
+31 (10) 408 1833 (Phone)
+31 (10) 408 9191 (Fax)

HOME PAGE: http://frg.sin-online.nl/staff/index.html?lia=227

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