Will U.S. Class Actions Invade Europe?

International Law

Posted Jul 24, 2007, 01:30 pm CDT
By Martha Neil

American lawyers and European politicians have discovered they have a common interest in opening the door to class action litigation.

Such mass tort suits require changes in the law, to permit plaintiffs with similar claims to band together. But some politicians are interested in enacting legislation to allow European class actions, Bloomberg reports.

Currently, French President Nicolas Sarkozy is calling for "class action a la Francaise.'' The Netherlands has a law that permits courts to oversee settlements en masse, even though it doesn't allow suits to be brought by a class. And Germany, in response to 2,500 securities suits filed in 2003 by 16,000 shareholders of Bonn-based Deutsche Telekom, passed a law in 2005 creating a special procedure for shareholder suits.

There's still one big difference between the U.S. legal system and those of many foreign countries that may discourage European class action suits, though, Bloomberg says: Under the American rule, each side generally bears its own legal costs. By contrast, the loser must pay the winner's legal fees in many European cases. Meanwhile, only Spain has a contingency-fee system that allows lawyers to be awarded a percentage of damages, says attorney Matthew Newick of Clifford Chance.

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