Class actions

Clifford Chance has established a multi-jurisdictional "Class Actions Group" that includes partners and associates from across our global legal network, all experienced at handling some of the largest commercial disputes in their respective countries.

Collective actions provide redress where individual claims might not be large enough to support legal action and therefore enhance access to justice for consumers. Some commentators also argue that the threat of collective action provides a form of regulation by encouraging responsible corporate behaviour.

Collective actions are not yet as common in Europe as they are in the US. However, a number of recent developments mean that the risk of collective actions against large businesses is increasing, especially in the areas of product liability, securities and antitrust.

It seems clear that European jurisdictions and the EU itself are keen not to import the most criticised features of the US class actions system, which include:

• The possibility of inflated damages awards by US juries keen to punish large companies. These provides strong fuel for US class actions (and strong incentives for defendants to pay large settlements). Europe does not have the unpredictability of juries or punitive damages - this makes risk management easier for defendants.
• An active plaintiffs' bar fed by the incentive of contingency fees. Full blown contingency fees are not available in most European countries.
•  No costs shifting. In the US, the loser does not usually pay the winner's costs. This encourages speculative claims. In Europe (and particularly in the UK), the loser usually has to pay at least part of the winner's costs.
•  Pre-trial witness depositions and document discovery, which are strong weapons used by US class action plaintiffs to extract settlements. Apart from the UK, document discovery is currently rare in Europe (although suggested in a more limited form in the White Paper). No EU countries use pre-trial depositions.

Clifford Chance lawyers have experience in US style class actions and European collective actions. In the US we have particular expertise in conducting class action defences, defending from inception through trial and appeal, if necessary, securities, antitrust and other class action litigation, including many of the largest and best known class action cases ever brought in the US.