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The Class Action Debate in Europe: Lessons from the U.S. experience

By Lisa Rickard

U.S. Chamber of Commerce CEO Tom Donohue recently wrote about the importance of the transatlantic partnership—referring to it as “the backbone of global commerce.” In the face of the current economic crisis, it has become even more apparent how closely tied the well-being of our nations has become.  There is one aspect of this transatlantic partnership, however, that the U.S. business community does not seek to develop and which we fear will hinder our collective economic recovery—the spread of U.S.-style litigation. Indeed, the export of U.S.-style litigation has the potential to break the back of global commerce through the spread of the U.S.-style “compensation culture.”

As a number of European governments and the EU itself are looking to adopt new litigation mechanisms that closely resemble U.S.-style class and mass action lawsuits, we in the U.S. business community are concerned about the creation of a transatlantic market for the type of abusive, lawyer-driven class action lawsuits that have plagued the U.S. for decades. European policy-makers seek to reassure the business community that they do not intend to import the problems of the U.S. legal system in adopting class action mechanisms. Our experience in the U.S. with the entrepreneurial plaintiffs’ bar leads us to believe that it may be impossible to import the benefits of U.S.-style class actions while avoiding abuses and economic burdens. For that reason, in this article, we seek to share the lessons of the U.S. class action experience. It is, above all, a tale of unintended consequences.

The Genesis of the U.S. Litigation Crisis

As originally envisioned by its authors, the U.S. class action device was intended to enhance judicial efficiency in adjudicating claims involving large numbers of people and was intended to grant access to compensation for individuals whose claims, when taken individually, would not be sufficiently profitable to persuade a lawyer to take their case.

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