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New group action procedure in Scotland

New group action procedure in Scotland ...


Merricks v Mastercard Inc : Collective Actions Re-invigorated

Merricks v Mastercard Inc : Collective Actions Re-invigorated...

Alternative Mechanisms


ADR is an umbrella term covering a large number of processes to settle differences between the parties of a dispute by means of extra-judicial mechanisms: mediation, expert determination, arbitration, or a combination of these schemes.

Studies undertaken by the Commission found that a large number of ADR mechanisms are available in the Member States, adapted to particular legal systems. These may be mere facilitation processes or binding decisions made by a third party. Sectoral dispute resolution boards, ombudsmen, or government-run compensation schemes have been established to provide, especially for consumers, alternative ways to resolve disputes. The potential for ADR is not only relevant for single claims but also in collective claims. Its utilisation may provide the parties with advantages of reduced costs and time in dispute and allow the enforcement of small claims. For businesses, ADR can be a tool for maintaining business reputation and preserving customer trust.

In Europe, there is as yet no tradition of seeking collective compensatory redress and, although many Member States have already implemented forms of collective action procedures, there have only been a small number of cases. While in the United States, private enforcement of mass claims is shaped by opt-out regimes, discovery, contingency fees and thus has characteristics of regulatory enforcement mechanisms, mainly based on deterrence, European legal systems have adopted different solutions to mass problems aiming at avoiding overcompensation or other abusive practices.

ADR in collective redress shows a similar diversity, particularly given that the existence of binding (judicial) collective redress regimes is a relevant factor in the question of whether businesses will settle a claim or not. The field of application of ADR mechanisms related to mass claims will largely depend on the development of binding collective redress regimes.

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II. Collective Settlements

In contrast with a pro-active group action tool for collective redress, collective settlement mechanisms naturally require the parties to acquiesce to the result reached. A collective settlement of an opt-out nature thereby allows for parties to achieve finality in respect of the dispute in question, thereby providing legal certainty to all the parties concerned. For the infringing party, the concept of complete finality to a dispute can be a valuable commodity.

Collective settlement procedures have attracted attention due to the success of the Dutch WCAM legislation (Wet collectieve afwikkeling massaschade 2005). Reforms to introduce similar mechanisms have occurred in other European countries.

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III. Ombudsman mechanisms

General overview of the Ombudsman system in EU countries relating to Collective Redress.

The Ombudsman system has been extended all along the European Union territory, and although there are some slight differences between countries, the traditional Ombudsman is generally constituted as an independent body in charge of carrying out a form of control and monitoring of public administration activities in its interaction with citizens.

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