Class Action and Mass Tort Litigation in a

Class Action and Mass Tort Litigation in a Global Context Professor Linda S. Mullenix Comparative Approaches to Mass Litigation

Comparative Approaches to Mass Litigation n Questions for Discussion: n What countries have means or procedures for mass litigation? n What differences are there among legal systems and jurisprudence that affect the possibility for mass litigation? n Can American-style class litigation be adapted or adopted for use in other legal systems?

Comparative Approaches to Mass Litigation n Countries that now have class action legislation: Australia n Canadian provinces (all but 3) n Colombia n Finland n Japan (has mass tort act) n Sweden n

Comparative Approaches to Mass Litigation n Countries that have limited class action procedural means: Brazil (Consumer Protection Code) n France (consumer cases) n Germany (financial fraud) n

Comparative Approaches to Mass Litigation n Countries that have considered the American class action rule, have rejected it in favor of some other group proceedings: n United Kingdon and Wales (“group proceedings”)

Comparative Approaches to Mass Litigation n Countries in the process of drafting class legislation, expanding class proceedings: Italy n Switzerland n

Comparative Approaches to Mass Litigation n Linda Silberman, “The Vicissitudes of the American Class Action – With a Comparative Eye” (1999) n Thesis: n “The approach to group litigation and aggregation in other systems – particulalry those countries who are just starting to think about class actions and see in it a panacea to the problems of mass litigation – appears to me oversimplified and naive. ”

Comparative Approaches to Mass Litigation n Questions: n Is Professor Silberman correct? n Do other legal systems have an “oversimplified and naive” view of American class actions? n What cautionary problems exist with American class actions that other countries need to be aware? n What abuses of class actions does Prof. Silberman discuss? n Are these problems uniquely American, or are these possible problems for other legal systems as well?

Comparative Approaches to Mass Litigation n American class actions developed in American legal system – traditions of: Reliance on strong adversary system n Powered by entreprenurial lawyering n Culture of robust judicial lawmaking n Complicated by expansive dual court system (state and federal courts) n

Comparative Approaches to Mass Litigation n Problems and abuses of class action in U. S. : n Conceived as device to empower individuals affording access to justice n Instead, restrains individuals from commencing or settling own litigation n Problems with inadequate notice and inadequate opt-out provisions n Substantial responsibility for protecting rights of absent class members rests with judge

Comparative Approaches to Mass Litigation n Problems and abuses of class action in U. S. : n Focus on settlement class abuses: n n Disempowers individuals Buys peace for defendants Clears court dockets Decreases individual justice for absent class members

Comparative Approaches to Mass Litigation n Problems and abuses of class action in U. S. : n Focus on problems of settlement classes: n Raises questions whether class lawyers compromise or short-change clients’ interests n Favorable settlements benefit defendants n Favorable settlements benefits attorneys through fees n Incentives in settlement classses work to disadvantage of absent class members

Comparative Approaches to Mass Litigation n Problems and abuses of class action in U. S. : n Questionable settlement practices: n “discount coupon settlements” (now limited by Class Action Fairness Act of 2005) n Reversionary settlements (sums returned to defendants) n Inventory settlements (settling presentinjury and future exposure-only claims at same time)

Comparative Approaches to Mass Litigation n Recent attempts to curb abusive class action practices: Strengthened requirement of adequate representation n Repudiation of broad nationwide mass tort class actions (HIV blood litigation) n

Comparative Approaches to Mass Litigation n Question: n Are these problems and abuses in American class action litigation potential problems for civil law systems?

Comparative Approaches to Mass Litigation n Sources of Law: Common Law Countries n n n Constitution Statutes Decisional law Precedents Res judicata n Sources of Law: Civil Law Countries Constitution Statutes Scholarly exegisis No precedential value to cases n Different notions of diffuse, collective, and homogeneous interests n n

Comparative Approaches to Mass Litigation n Social, Political Context: USA n No socialized medicine n No cradle-to-grave social services n Privatized health and welfare n Social, Political Context: Civil Law Countries n Expanded governamnetal social welfare support n Socialized health care and medical support n Less need for recourse to tort remedies

Comparative Approaches to Mass Litigation n Cultural values concerning dispute resolution – USA n Cultural values concerning dispute resolution – civil law countries n Strong culture of “litigiousness” n Strong culture of adversary litigation n Strong culture of individual rights n No similar culture of litigiousness

Comparative Approaches to Mass Litigation n Client solicitation and n Weak solicitation rules n Attorney advertising n Solicitation strictly attorney advertsing: USA permitted n Protected First amendment commercial free speech right attorney advertising: common law countries prohibited n No attorney advertising

Comparative Approaches to Mass Litigation n Financing Litigation & Attorney Fees – USA Attorney Fees – civil law countries n Permits percentage contingency fees n Prohibits contingency fees n Each side pays on costs n Loser-pays rule n No fee-shifting to loser

Comparative Approaches to Mass Litigation n Damages: availability of puntive (exemplary) damages – USA n Punitive damages available in almost all jurisdictions n Subject to constitutional limit (reasonable multiple compensatory damages) n Damages: availability of punitive damages – civil law countries n Punitive damages not available

Comparative Approaches to Mass Litigation n Jury Trial – USA n Jury Trial – civil law countries n Constitutional right in federal court n No jury trial right

Comparative Approaches to Mass Litigation n Conduct of Litigation – USA n Conduct of Litigation – civil law countries n Liberal discovery of all n No parallel system of information from adversary n Civil and criminal proceedings stictly separate information discovery n Some civil proceedings “annexed” to criminal proceedings

Comparative Approaches to Mass Litigation n Concepts of Standing and Res Judicata – USA and Res Judicata – civil law countries n Standing developed n Statutory standing for by case law doctrine n No statutory standing n Strict res judicata rules specific groups n No parallel res judicata concepts

Comparative Approaches to Mass Litigation n Role of the Judge – USA n Role of the Judge – civil law countries n No professionalized n Highly judiciary n Judge neutral arbiter n Judge nonparticipatory in case development professionalized judiciary n Tradition of “inquisitorial judge” n Judge as evidence gatherer

Comparative Approaches to Mass Litigation n Aggregate Compensatory Damages – USA n Aggregate Compensatory Damages – civil law countries n Common fund doctrine permitting aggregate compensatory damages n No provision for aggregate compensatory personal tort injury damages

Class Actions for Continental Europe? n Richard B. Cappalli and Claudio Consolo, Class Actions for Continental Europe? A Preliminary Inquiry, Temple. Ont’l & Comp. L. J. (1992) Cappalli on American class action rule n Consolo on civil law tradition n Section V: the prospects for Italy n

Class Actions for Continental Europe? n Obstacles to adoption of class actions in civil law systems (by Cappalli): No class action suit exists in Italian Code of Civil Procedure n Inconsistencies with existing rules: n n n Italian law requires a procura (power of attorney) for each represented person – would need to represent only named party Attorneys would need to be permitted to advance costs

Class Actions for Continental Europe? n Obstacles to adoption of class actions in civil law systems (by Cappalli): n Inconsistencies with existing rules: Attorneys would need to be permitted to collect fair compensation n Management and sanctioning powers would need to be vested in judges n Judges need experience in handling such complex cases n

Class Actions for Continental Europe? n Conceptual and philosophical problems: n Article 24 of Italian Constitution – guarantees all people the right to assert legal claims n Italian civil law mindset: n n n Dominated by “dogmatics” Focus on legal relationships and interrelationships of juridical concepts Doctrinal analysis by legal scholars and interpretations of codes

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Does not focus on diffuse rights collectively held n Not interested in injunctive relief n Interested only in possibility of remediation for past damages under a Rule 23(b) action

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Barriers to transplantation of American model: Institutional n Juridical n Sociological n Economic n n Civil law systems lack versatility & adaptability to concrete problems & policies (unlike the U. S. )

Class Actions for Continental Europe? n Prof. Consolo’s comments (on problems): n European countries lack private procedural instruments which generate substantive control over illegal relations (example: investor fraud) n Preventitive function achieved by administrative and criminal sanctions

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Conceptual Problems: n Bilateral dimension of civil litigation n Continental lawyers think in term of: n Civil/criminal dichotomy n Private/public dictomoy

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Civil Process: n Conceived in individualistic terms n Applies to private, individualistic situations n Person who has standing to sue must be right-holder n Person who has standing to sue must be a truly legitimate representative, such as a lawyer

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Criminal Process: n Affects the public interest n Brought by a public party who has standing to sue n Remediation of damages must await series of civil suits

Class Actions for Continental Europe? n Prof. Consolo’s comments: n Collective action exceptions in Italy: n Statutes recognize collective character of certain interests – examples (actions by): n Associations to protect unfair competition n Dissenting condominium owners n Absent or dissenting partners & shareholders n Matters involving elections n Unions in labor controversies

Class Actions for Continental Europe? n Prof. Consolo’s comments: n However: n Examples of possible collective action are severely limited and not expandable by analogy n Other problems: n Failure to annex procedural mechanisms to protect substantive rights

Class Actions for Continental Europe? n Questions: n Profs. Cappalli and Consolo’s article written 15 years ago n Are Prof. Consolo’s descriptions of Italian civil law still true? n Are Prof. Consolo’s descriptions of the limitations of Italian collective action still valid? n Do these problems and conceptual differences impair the ability to enact a class action for civil law countries?

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