The idea of joining consumers together in a collective action to get redress for widespread but “small value” harms is a simple one, and new instruments like the Representative Actions Directive (RAD) should help.
But lifting the law off the page is hard, especially for claims that involve online harms which may be more complex to identify, quantify and manage.
Factors like funding, jurisdictional processes, quantification of damages, claimant management and risk management more generally across an often long time period must come together for a successful outcome.
The Representative Action Pilot (Re‑act) is an EU‑funded initiative designed to strengthen the capacity of consumer organizations to secure collective redress in the online marketplace.
Our Italian member Altroconsumo is leading the project, sharing their experiences of developing national and cross-border collective actions across Europe with consumer organizations in Latvia, Lithuania and Slovakia.
The pilot will design and stress-test out the best strategies that qualified entities can use to pursue effective class actions for consumers harmed when companies breach DSA rules on moderating content, protecting vulnerable consumers or hosting illegal content or goods.
The kick off event in Riga, Latvia explored how to best leverage two key pieces of EU regulation into real outcomes for consumers – the Representative Actions Directive (RAD) and the Digital Services Act (DSA).
The four consumer organizations shared insights from their national experiences to identify practical ways to help consumers across Europe access consumer justice.
Re-act’s next workshop was held in Bratislava, Slovakia, where the rapid learning moved on to two practical and critical elements of collective proceedings – litigation funding and damages estimation. A proper understanding of these will help organizations define the cases with the best chance of success, both legally and practically.
Experts shared their insights on how litigation funders make decisions about which cases to back, assessing legal merits, jurisdiction, economic risk, duration risk and recoverability.
They also covered the contractual framework for funding, explaining how funders are remunerated, how claimants receive damages, and the governance arrangements that oversee these processes.
Quantifying how much consumers might receive and companies might pay out is a little different in collective proceedings as they must balance out an amount that works for thousands of consumers, access to justice for recovering ‘small value’ claims, and how much the award would have a deterrent effect on a firm.
Experts at the workshops drew on the theory and some practical examples of cases against Roblox and Stellantis where qualified entities had established quantum.
After the briefings, participants got down to the real work, with facilitators leading them through a role play of building a ‘bankable’ case for a litigation funder.
They identified the merits, by grounding their claim in DSA regulation and developing workable quantification methodologies, then established what funding was needed to cover a multi-year legal case, including adverse costs and risks. They also planned out how to identify and engage with potential claimants on a long term basis.
These kinds of simulations are a great tool for building up practical understanding of bringing collective claims in a supportive environment.
And the joint approach has a longer term value. The pilot is not just about sharing knowledge, it is about co-ordinating consumer organizations so they have the ability to pool legal costs, share hard‑won knowledge, and take joint-up, cross‑border action for collective redress.
Re-act is the start of expanding consumer organizations’ power well beyond the legal assistance they can offer to consumers today, and turning it into something that can transform access to consumer justice into companies’ compliance checks. The ambition is that this will eventually mean a more transparent, fair and equitable digital single market for all European consumers.
Luisa Crisigiovanni, Head of EU Projects at Euroconsumers
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