Research Handbooks in International Law series
Edited by Geraint Howells, Iain Ramsay, Thomas Wihelmsson and David Kraft
Chapter 17: Using Class Actions to Enforce Consumer Protection Law
Deborah R. Hensler* 1. Introduction In most consumer protection legal regimes, the preferred strategy for implementation is public enforcement. But the need for enforcement often outstrips the financial resources that enforcement officials and agencies have available. Where manufacturers and service providers actively oppose enforcement, they may be able to use their political influence to drastically limit public expenditures for enforcement. In extreme instances, business actors may be able to restrict agencies’ power to regulate certain areas of the economy entirely. Moreover, regulatory agencies may attract personnel who served previously in the business sectors that the agencies are charged with regulating or who hope to move into such sectors after they complete their public service. Such prior history or hopes for future employment may diminish these public officials’ interest in aggressively enforcing consumer protection law. In sum, both theory and experience suggest that public enforcement will often not suffice to limit violations of consumer protection law.1 In addition, in many instances, public enforcement agencies do not have the authority, expertise or resources necessary to design and implement programmes to reimburse consumers who have suffered losses as a result of violations of consumer protection laws. Some agencies are authorised to levy financial penalties, which may have an important deterrent effect and can be used to provide subsidies for useful consumer education and protection programs. But the individuals who actually suffered financial harm as a result of illegal business behaviour often cannot recoup their losses from these penalties. In some instances, consumers and...
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