EU Representative Actions Directive: The Developments to Know for This Evolving Landscape

May 17, 2024

The fragmented priorities and pace of EU member states in adopting national laws following the EU’s enactment of the Representative Actions Directive—a universal minimum-standards legal framework for representative actions aimed at protecting the interests of consumers—presents businesses and legal counsel with good reason to review their representative action playbooks in EU and non-EU regions of operation.

EU Member State Directive to Impact Jurisdiction Shopping

The Representative Actions Directive (the EU Directive) is the European Union’s latest solution for establishing uniform and unified legal standards throughout the union and expanding legal protections to the representative interests of consumers. For decades, each EU member state has had different legal rights and protections for representative actions that lacked cross-border considerations and, for many countries, substantive representative action case law and history.

While the EU Directive has applied to all member states since June 2023, the member states are moving at different paces, and with different priorities, to transpose the universal minimum-standards requirements into national law. Member states are afforded discretion in interpreting elements of the directive so long as certain key objectives are met.

Where member states exercise discretion such as with sectors to be subjected to representative actions, will not only affect jurisdiction shopping by claimants or qualified entities (QEs), i.e., a consumer organization or a public body, who acts as a claimant party, in the interests of and on behalf of these consumers and is formally recognized by a member state to do so and defendants, but also the reputation of member states regarding consumer and representative interest protections and legal and business risk.

Representative Action Discretion and Requirements for EU States

While the EU Directive requires all member states to adopt key requirements into national laws, they have notable discretion to decide how specific elements of representative actions proceedings occur:

  • Procedure: Should representative actions proceed before courts or administrative authorities or both?
  • Opt In vs. Opt Out: Will consumers be required by member states to opt in, requiring all potential representative action members to agree beforehand to involvement in a representative action, or will member states permit opt-out, allowing representative actions to be brought on behalf of a representative group without member consent or knowledge unless exclusion is clear?
  • Funding: Which member states will allow funding to be private instead of public, or vice versa, or both?

There are certain requirements and decision outcomes from the EU Directive that all member states must have within their respective representative action legal frameworks:

  • Redress: Compensation, repair, reimbursement, price reduction, or contract termination
  • Injunction: Cessation or prohibition of a practice
  • Representative settlements: Agreements between the QE and the defendant

EU Embraces Cross-Border Consumer-Friendly Representative Action Approach

Under the EU Directive, cross-border representative actions may be brought in the EU across member states, including single actions across member states, for the first time. QEs, however, face a higher general threshold for cross-border representative actions compared to single-state actions, including a mandatory one-year or longer history of activity and involvement in consumer transactions. The EU also created a restricted information exchange platform, EC-REACT, to facilitate document, case, and repository cooperation and collaboration among courts, QEs, defendants, and member states in representative action proceedings.

The EU Directive maintains a consumer-friendly approach to representative actions by enabling cross-border representative action pursuit and offering public funding assistance, court fee limits, and access to legal aid. Claimants should be mindful of the application limits, procedure costs, and enforcement requirements in addition to the EU Directive’s consumer benefits.

Consumer Benefits

  • Access: Consumers can benefit from redress without the need to bring a separate action.
  • Efficiency: The EU Directive imposes time limits for individual consumers to benefit from redress measures. No forever-lasting claims can hang before the EU courts.
  • Additionality: Any additional remedies are not the subject of a representative action.

Limits of Application

  • One-time use: Consumers in one representative action cannot be in another representative action or bring an individual action with the same cause against the same defendant or trader. What’s more, consumers cannot receive compensation more than once for the same cause.
  • Opt-out limits: Facing a cross-border action, claimants in different member states than in which the representative action was brought must proactively opt-in. Only consumers who are resident in the same member state are included. Opt-out is only a possibility for injunctive relief.
  • Conscious choice: The EU Directive requires consumers to demonstrate a conscious choice to seek redress.
  • Summary dismissal possible in preliminary stages: The EU Directive presents the possibility for summary dismissal of “manifestly unfounded” cases in early-stage proceedings.
  • No punitive damages: The EU Directive does not make it possible to impose punitive damages on the infringing defendant or trader and discourages the awarding of punitive damages to prevent the misuse of representative actions.

Costs of Procedure

  • Loser pays principle: The claimant or defendant who loses is responsible for payment, with exceptions under specific circumstances. This requirement aims to reduce abusive use of actions.
  • Costs-incurred payment: Individual consumers only pay costs incurred due to the individual consumer’s intentional or negligent conduct.
  • Representative action entry fees: QEs have rights to require consumers to pay an entry fee to join an action; however, member states must ensure costs of proceedings do not prevent QEs from bringing action or seeking injunctive measures.


  • System of penalties: EU member states must have a system of penalties for failure or refusal of a defendant to comply with injunctive measures, information obligations, and disclosure of evidence obligations.
  • Mindful penalties: The EU Directive requires penalties to be effective, proportionate, and dissuasive. It remains to be seen how each EU member state will interpret such in national law.

Jurisdiction Highlight: France Representative Action Laws

Unlike the Netherlands, France has a brief history of representative actions, which were implemented in 2014 and initially only addressed consumer law issues. In 2016, the scope of representative actions was extended to health product liability, environmental liability, personal data protection, and discrimination.

In March 2023, the French National Assembly adopted a proposed law to extend representative action scope and indemnification. The current pending bill before France’s Senate seeks to do the following:

  • Implement a single representative action legal framework in France
  • Extend the scope of representative actions
  • Identify more QEs to represent parties
  • Develop a civil sanction in case of willful misconduct
  • Offer remedies that can be reparative and injunctive

The implementation of the EU Directive and its transposition into member state national law is expected to increase the number of representative actions in France as well as in England and Wales, the Netherlands, Germany, Portugal, and Slovenia.

Jurisdiction Highlight: US Representative Action Laws

The United States has a long and substantial history of representative action case law. It was the EU’s intent to compose the EU Directive with remedies to consumer representative action problems experienced in the United States.

Challenges with Representative Actions in United States

EU Solution to US Challenge

Difficult for defendants to exit representative actions

Early dismissal of “unfounded” cases possible

Motions to dismiss are difficult to win

Early dismissal of “unfounded” cases possible

Nearly zero limits on claims that can be brought

Restrictions on claims that can be brought

Plaintiffs’ bar has high reward/low risk and cost stakes

More balanced risk/rewards because of potential for fee-shifting, opt-in only (likely smaller classes), and no potential for punitive damages.

While the EU Directive offers solutions to several known challenges in US representative action law, there are demonstratable positive aspects of US representative action law that the EU and its member states may wish to consider for adoption.

In US tradition, individual plaintiffs, a select number of representative action members, bring a suit. If the individual plaintiffs prevail, all representative members prevail. Alternatively, if the individual plaintiffs lose, all representative members also lose on claims. The EU Directive does not currently offer clarification on how this approach would work using a QE model.

Additional Areas Open to Interpretation By EU Courts

  • Will EU courts take into consideration claims dominance and superiority similar to the US model?
  • How will representative actions be defended in EU courts?
  • Will EU member states pass laws requiring a representative-wide damages model to ensure fewer trials to determine damages?
  • Will EU courts decide on the appropriateness of a claim moving forward as a representative action?
  • As representative action frameworks expand in EU member states, will discovery use expand as well?
  • Will EU courts consider representative action notice and administration models?
  • How will litigation funding and cost-shifting impact representative actions?

Representative Actions to Rise Across the EU

As courts in each EU member state interpret their country’s representative actions laws, each state or jurisdiction will offer different benefits and risks to claimants and defendants alike. Cross-border representative actions are expected to bring higher case numbers in some states, while some others may see fewer actions. Large jurisdictions that are used to significant numbers of representative action cases will adapt readily, while it remains to be seen how smaller jurisdictions that are new to representative actions will react.

Looking to the future, companies and consumers should collaborate with legal counsel to develop an understanding of the representative actions legal landscape in the EU, identifying laws, developments, and potential risks and benefits in each region of operation or member state. As the EU representative action landscape undergoes change, representative actions developments in the United States, United Kingdom, and other countries should be considered as well, providing a more fulsome perspective of the global representative actions landscape.


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