Header graphic for print
CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Guest Post: The Class Action Fairness Act’s Impact Internationally

Posted in Resources

The CAFA Law Blog is pleased to post another guest post.  This post is from Daniela Levett for Pryers Solicitors.  Daniela, you have the mike….

*****************************************************************

It has been seven years since President George W. Bush signed the Class Action Fairness Act into American law. The act changed the way class action lawsuits are filed and handled in the United States. CAFA, as it is known, has changed the way that large class action suits are handled in the U.S., but what has the effect of this law been on international law and international class action cases?

Other nations have for decades kept a close eye on class action lawsuits in the United States as lawsuits of this nature were almost entirely unique to this country. European nations in particular have long viewed class action suits in the U.S. with both suspicion and admiration. The enactment of CAFA in 2005 has further increased the interest of other nations in class action litigation.

Prior to 1998, during the formation of the European Union, nations across Europe looked to the American system to judge how useful class action suits were. When the European Parliament and Council issued a directive for all member states to implement programs for group litigation, various methods popped up across the continent.

In the years since 2000, when member states of the European Union needed to enact group litigation policies, the pace of class action suits has ramped up across the continent. In a reversal of trends, the implementation of CAFA in 2005 signaled an interest in the U.S. in reigning in class action suits due to their cost, questionable benefits, and the strain they place on the U.S. federal court system.

As the pace of litigation in the United States began to shift post-CAFA, the interest in and support of class action litigation around the globe appears to have increased. Consumers, who have long been without a legal mechanism for class action suits, began to clamor for a means of redress against the wrongful acts of a company.

While the 2005 enactment of CAFA sought to control the spiraling pace of class action lawsuits in America, other nations began to enact laws to provide an organized mechanism for consumers to seek redress against companies. A few examples include:

-          As of 2008, nine of the 10 provinces of Canada of comprehensive class action laws that provide, in particular, “opt-out” clauses that allow citizens of a different province to be included in decisions issued in another province unless they opt-out of the suit.        

-          Italy has class action regulations in effect as of 1 July 2009. Consumer organizations can file suit against corporations on behalf of a group of consumers and then obtain judicial orders against corporations that have caused injury or damage.

On the other hand, some nations have had an opposite reaction in the wake of CAFA and even criticized groups that hold up the U.S. class action system as an example. In 2006, Switzerland rejected the introduction of class action legal codes. The proposed Swiss law was denied because it was viewed as being “alien to European minds” to allow somebody to represent the legal rights of an entire group. In the ruling, the U.S. system was criticized for its procedural problems and the high rate of abuse in the system.

The greatest movement in the wake of CAFA has been the proposal of “collective redress” by the European Union. The European Commission has been studying the idea of a European-style class action since 2008. The idea is to provide an overarching group litigation process that would apply to all 27 member states and replace any current systems used in those regions. As of early 2012, the issue has yet to be settled.

One thing has become clear. While the U.S. continues to battle back against runaway class action lawsuits, other nations are embracing the idea of class action suits and working to enact legal guidelines that provide a mechanism for class action lawsuits.

Author Bio:

Guest Post was contributed by Daniela Levett for Pryers Solicitors. Daniela is a freelance writer with extensive legal background as an attorney. She enjoys writing for various online legal publications.