Collective redress - Litigation funding in relation to the establishment of a European mechanism of collective redress

Solving the problem of funding is crucial in ensuring that any collective redress system to be established is effective. BEUC strongly backs the creation of a public fund dedicated to the financing of collective redress brought by consumer organisations. This fund could be fed only partially by direct State deposits and complementary resources, for instance, a share of the fines imposed for antitrust offences, could be sourced.

The possibilities to use after-the-event legal insurance have to be examined.

Third party funding raises various fundamental concerns. If this system had to be endorsed at EU level, precautions  and safeguards will have to be taken to ensure the risks inherent to this mechanism are eliminated.  

If the ’loser pays’ model is a fair instrument in relation to covering litigation costs, it may also become a disincentive for serious claims as claimants face the risk of having to pay both parties’ costs. Therefore the judge should be
given the power to adjust the costs to be reimbursed.