How Culture, Economics and Politics Shape Collective Litigation
Edited by Deborah R. Hensler, Christopher Hodges and Ianika Tzankova
Chapter 17: Self-interested gatekeeping? Clashes between public and private enforcers in two Chilean class actions
Many scholars believe that using public agencies to control the flood of private lawsuits is a creative way to enact regulatory regimes that benefit from both the impetus of private enforcement and the accountability of public enforcement (Stephenson, 2005). In the context of class actions, this idea implies broadening the standing required to file class actions to multiple private parties while granting the Office of the Attorney General or other public agencies ‘the power to oversee and manage private litigation efforts’ (Engstrom, 2013, 616). However, the idea of bringing public accountability to class actions by the means of public agencies might be defeated by public agencies’ self-interested behavior. As most sophisticated class counsel in Chile have found, in the absence of clear and workable rules to coordinate public and private enforcement, public agencies can use their discretionary powers and preeminent position to prey on private enforcers, effectively hijacking their cases or settlements for short-term political gains. The two cases presented in this chapter illustrate this. They describe how the Servicio Nacional del Consumidor (SERNAC), the Chilean consumer protection agency, hijacked cases and took credit for redressing the consumers for their losses, knowing that the defendants’ willingness to compensate the consumers was the result of the efforts of private enforcers. The backdrop of the cases reveals an ‘insecure’ agency driven by self-interest that shunned competing private enforcers who threatened to displace it in its perceived role as the most effective defender of the consumers’ rights in the country.
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