Bogeymen, Lunatics and Fanatics: Collective Actions and the Private Enforcement of European Competition Law

Abstract

The European desire to ensure that bearers of EU rights are adequately compensated for any infringement of these rights, particularly in cases where the harm is widely diffused, and perhaps not even noticed by those affected by it, collides with another desire: to avoid the perceived excesses of an American-style system of class actions. The excesses of these American class actions are in European discourse presented as a sort of bogeyman, which is a source of irrational fear, often presented by parental or other authority figures. But when looked at critically, the bogeyman disappears.

Some form of collective action is necessary to ensure compensation when large numbers of people each suffer a small amount of harm. As Judge Posner once remarked, “only a lunatic or a fanatic sues for $30.” Authorities in Europe recognise this, yet wish to avoid the perceived American excesses.

In this paper, I examine the European (and UK) proposals for collective action. I compare them to the American regime. The flaws and purported excesses of the American regime, I argue, are exaggerated. A close, objective examination of the American regime shows this.

I conclude that it is not the mythical US class action which is the barrier to effective collective redress, rather the barriers to effective, wide-ranging group actions lie within European legal culture and traditions, particularly those mandating individual control over litigation.

Keywords: Antitrust, Private Enforcement, Collective Action, Class Actions, EU