24 Member States Fail to Transpose Collective Redress Directive

The European Commission has initiated the first stage of infringement proceedings against all 24 of the Member States who have thus far failed to implement the Directive (EU) 2020/1828 on Representative Actions for the Protection of the Collective Interests of Consumers. These Member States now have less than two months to reply to the letters of formal notice and complete the transposition.

The principal function of the Directive is to introduce the right for consumers across the European Union to seek collective redress. It requires member states to put in place a series of legal mechanisms and procedures which will facilitate consumers in bringing collective actions against corporations who have infringed EU law. These collective actions will enable a qualified entity, such as a consumer organisation, to seek redress in the form of monetary compensation, replacement or repair and/or injunctive relief, on behalf of groups of consumers who have been harmed by illegal commercial practices.

By 25th December 2022, all EU Member States were expected to have transposed the laws, regulations and administrative provisions necessary to comply with the Directive, with the Commission outlining that the provisions must come into effect by 25th June 2023. However, of all 27 EU Member States, only the Netherlands, Hungary and Lithuania have fully transposed the directive before the deadline. As a result, the following 24 Member States received formal letters of notice from the European Commission for failure to transpose the Directive within the deadline:

· Austria

· Belgium

· Bulgaria

· Croatia

· Cyprus

· Czech Republic

· Denmark

· Estonia

· Finland

· France

· Germany

· Greece

· Ireland

· Italy

· Latvia

· Luxembourg

· Malta

· Poland

· Portugal

· Romania

· Slovakia

· Slovenia

· Spain

· Sweden

These countries must now formally respond to the EC’s letters and complete the transposition within the next two months. If they fail to do so, the Commission may decide to issue a formal request to comply with EU law. Any Member State who subsequently fails to transpose the Directive will be referred to the Court of Justice, which may impose substantial penalties and order compliance, whilst the Directive would likely have direct effect during proceedings.

We therefore anticipate that there shall be a hastening of the national transposition of the Directive within the majority, if not all, of the Member States within the coming weeks. We shall of course, keep our readers up to date regarding any developments on the implementation of the Directive via the News and Insights section of our website.