Table of Contents

The Law and Economics of Class Actions in Europe

The Law and Economics of Class Actions in Europe

Lessons from America

New Horizons in Law and Economics series

Edited by Jürgen G. Backhaus, Alberto Cassone and Giovanni B. Ramello

This well-documented book discusses the power and limitations of class actions with insights and analysis from a panel of distinguished scholars. It pays special attention to the introduction and the applicability of such a legal device in European civil law countries. The book offers a broad legal and economic investigation, drawing insights from US judicial experience and giving a rigorous discussion of both the philosophical and constitutional aspects and the economic mechanisms and incentives set up by class actions.

Chapter 7: Private, Club and Public Goods: The Economic Boundaries of Class Action Litigation

Alberto Cassone and Giovanni B. Ramello

Subjects: economics and finance, law and economics, law - academic, european law, law and economics


Alberto Cassone and Giovanni B. Ramello* 1. INTRODUCTION In recent decades, class action litigation has attracted growing attention from citizens and legislators around the world, by virtue of its ability to extend the protection of victims where traditional methods – i.e. individual civil action and regulation – have proven vulnerable. First introduced in the US legal system in 1938, through Rule 23 of the Federal Rules of Civil Procedure, it then took nearly three decades for class action to be fully implemented into US civil procedure, with the 1966 issuing of the new version of Rule 23 by the Supreme Court.1 Since then, class action has been fiercely criticised by a number of opponents, to the point of starting, in the 1970s, what has been described as a ‘holy war’ (Hensler et al., 2000).2 However, despite these negative stances, it has over the years become ‘one of the most ubiquitous topics in modern civil law’ in the US, and nowadays one of ‘[t]he reason for the omnipresence of class actions lies in [its] versatility’ (Epstein, 2003, p. 475) which, according to a great many commentators, can make it an effective means for serving justice and efficiency in a broad sense. This material substantially refers to Cassone and Ramello (2011). Some authors have detected a precursor to class action in the Medieval group litigation of England. (Yeazell, 1987). Though not questioning the legacy owed by class action to previous regulations, we shall focus here on modern class action, which is essentially...

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