Edited by Geraint Howells, Iain Ramsay and Thomas Wilhelmsson
Chapter 17: Using class actions to enforce consumer protection law
In the past two decades representative collective litigation procedures, commonly termed "class actions," have been adopted by dozens of countries on virtually every continent. Representative collective litigation is now authorized in civil law as well as common law jurisdictions and in countries with diverse forms of government and political ideologies. One of the most popular uses of class actions is to supplement public enforcement of consumer protection laws and to facilitate compensation of consumers' losses, particularly when the losses to individuals from widespread violation of law is relatively modest. Although policy-makers in countries with avowedly strong commitments to public enforcement class actions insist the purpose of new class action procedures is wholly for purpose of "redress," requiring entities that violate market regulations to pay compensation inevitably produces a deterrent effect, in the form of the direct cost of compensation to those who were harmed and in the form of reputational losses that frequently accompany the payment of compensation to thousands or more victims. This chapter reviews the purposes of class actions and details their operation, with particular attention to the United States, the jurisdiction with the longest experience with the modern class action procedure. The author present empirical data on the rate of class action litigation and on litigation outcomes in the U.S. and considers the policy challenges of utilizing private class action litigation as a means of enforcing consumer protection law.
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