VCI on the EU Commission’s „New Deal for Consumers“
Effectively prevent abuse of collective redress
With its „New Deal for Consumers", the European Commission proposes to introduce european collective redress. From the view of the VCI effective consumer protection is an essential part of a functioning legal system. However, there is considerable need for improvement, to avoid the risk of abuse through a flood of collective redress lawsuits.
The German chemical industry association Verband der Chemischen Industrie (VCI) sees considerable need for improvement regarding the European Commission’s proposal to introduce a European collective redress model. Commenting the draft directive, VCI legal expert Berthold Welling warns: “The forthcoming directive must not pave the way for a litigation industry. Effective consumer protection is an essential part of a functioning legal system. However, it is essential to avoid the risk of abuse through a proverbial flood of collective redress lawsuits.”
From the VCI’s viewpoint, the measures in the draft directive are far from sufficient to prevent abuse of collective redress mechanisms. The VCI points out that the EU Commission should, in particular, incorporate amendments concerning the right to bring legal action and third party funding. Welling emphasizes: “It must be ensured that the planned form of collective redress does not become a vehicle for associations, law firms and other third party organisations which might benefit more the injured consumers.” Therefore, the VCI calls for a full ban of third party funding, as this is the only way to strictly exclude conflicts of interest.
The VCI represents the politico-economic interests of around 1,700 German chemical companies and German subsidiaries of foreign businesses. For this purpose, the VCI is in contact with politicians, public authorities, other industries, science and media.The VCI stands for over 90 percent of the chemical industry in Germany. In 2017 the German chemical industry realised sales of around 196 billion euros and employed over 453,000 staff.