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

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

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

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

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

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

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

7. Comparative Approaches to Mass Litigation • Linda Silberman, “The Vicissitudes of the American Class Action – With a Comparative Eye” (1999) • Thesis: • “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.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

27. Class Actions for Continental Europe? • 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 • Consolo on civil law tradition • Section V: the prospects for Italy

28. Class Actions for Continental Europe? • Obstacles to adoption of class actions in civil law systems (by Cappalli): • No class action suit exists in Italian Code of Civil Procedure • Inconsistencies with existing rules: • 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

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

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

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

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

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

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

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

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

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

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

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

40. Fine