Global Class Actions

The landscape of consumer class actions in Germany has seen notable developments in 2024, particularly under the Consumer Rights Enforcement Act (VDUG). The number of class actions has increased, with seven actions now published in the register of representative actions (Verbandsklagenregister). These actions include the new possibility of bringing motions for redress rulings as well as the continued use of motions for declaratory rulings on liability. The rising  use of redress motions indicates a growing willingness among consumer associations to utilize these legal mechanisms and address consumer redress topics.

Consumer associations have also announced their exploration of new matters, although they have not yet initiated actions for all prospective matters. This proactive approach suggests that consumer associations are actively seeking to expand the scope of consumer protection and are likely to bring forward new cases in the future.

These developments highlight a dynamic shift towards more representative consumer advocacy, with associations leveraging the VDUG to hold companies accountable for consumer rights infringements. The increase in class actions reflects a broader trend of empowering consumers and enhancing their ability to seek collective redress by declaring their opt-in to these actions.

Looking ahead to 2025 and beyond, several trends are poised to shape the consumer class action landscape in Germany. While the VDUG has facilitated several actions, there remains limited experience with certain features of the new procedure for redress (Abhilfeklage) in court. Key aspects to monitor include the effect of the extended consumer opt-in period beyond the hearing date, the potential for court-approved settlements after the ruling on the merits, and the enforcement procedure (Sachwalterverfahren).

Consumer associations with standing to sue have not yet fully expanded their actions to encompass the entire scope of Annex I of Directive (EU) 2020/1828. As the scope of potential actions in Germany is broader than the Directive, we may witness the emergence of new topics and subject matters. Additionally, the absence of cross-border interventions in VDUG matters thus far leaves open potential future developments in this area.

To prepare, companies should closely monitor pending class actions and assess whether similar claims could be asserted against them. Historically, many class actions have revisited topics previously addressed against other defendants. Companies should also pay attention to announcements by qualified plaintiffs regarding topics they are investigating or seeking concerned consumers for. Requests for cease-and-desist letters from consumer associations could serve as early warning signs of potential collective redress actions.

Furthermore, companies should be ready to manage the cumulative impact of various legal actions, including injunctive actions, individual consumer redress (potentially as mass litigation), and opt-in class actions. By staying vigilant and proactive, companies can better navigate the evolving legal landscape and mitigate potential risks associated with consumer class actions.

The consumer class action landscape in Italy witnessed significant developments in 2024, with a notable increase in the number of cases, thanks to the activisms of some consumer associations and the new European legal regime on class and representative actions (fully implemented in Italy), which made these tools more accessible than in the past.

Based on available data, 34 class and representative actions have been filed in 2024 (16 more than in 2023). Half of these cases affect the consumer sector, and the majority were representative actions regarding:

1.    Unfair contractual terms. Several actions targeted car rental companies and banks, challenging the use of allegedly unfair terms in their standard agreements, as well as companies offering digital and audiovisual media services and telecommunications providers. 

2.    Breach of contract. A consumer association sued a cruise line operator for a change in the itinerary and asked for compensatory measures, including ticket price reimbursement.

3.    Defective products. A representative class action was brought against a car manufacturing company by a consumer association, which asked for both injunctive and compensatory measures. 

As to class actions (for damage compensation or injunction) filed in 2024 in the consumer sector, the available data show an interest in:

4.    Greenwashing practices, where a food company has been accused of misleading advertising by falsely marketing its products as environmentally friendly.

5.    Defective products, especially in the life sciences and automotive industry, with requests for damage compensation and injunction against product distribution.

6.   Energy and gas supply, where some users sued an energy and gas supplier for unjustified monetary charges.

7.    Fintech and security measures, where two different companies have been sued for damage compensation due to the alleged malfunctioning of the platform and failure to implement adequate authentication measures. 

Most of these cases are still pending, except for those reported as “terminated” on the Ministry of Justice‘s website and which have probably been settled. Representative actions seem to be faster than class actions: three of the reported representative actions against car rental companies have been upheld on the merits in the first instance and the appeals are now pending; one has been declared admissible and is pending on the merit, while two class actions launched in previous years have been dismissed in the first instance and no one so far has been upheld on the merits. 

There are no factors suggesting that the trends of recent years will not continue in the immediate future, with a constant increase of class actions, and especially of representative actions, in the consumer sector. The activism of consumer associations seems to lead towards targeting consumer credit companies and utility companies (e.g., telecommunications, gas, electricity), which are often called to respond to requests for injunctions regarding unfair terms and conditions and misleading commercial practices.  

Although still underrated in Italy, ESG is expected to break into the class action soon, as testified by a class action for an injunction on greenwashing launched in 2024 by a consumer association. Consumer association activism may also combine with shareholder activism, and class actions by shareholders for ESG purposes may couple with similar actions for consumer protection.

The acceleration we are experiencing in recent years in terms of technological development will certainly also impact the landscape of class actions, with a possible increase in claims for damages for data breaches and platform blackouts (a few cases already existing on this) and possible cases of so-called AI or tech-washing (i.e., a communication strategy aimed at the overstatement or misrepresentation of the AI or tech tools governing processes and/or services offered by a certain company).

Considering this scenario, for companies that may be targeted by a class action, preparation is essential, yet not simple. 

First, companies should put their best efforts into monitoring and ensuring the company's compliance with regulations and standards protecting consumers, data privacy, defective products, and any area of the company's operations that is structurally more prone to lead to collective litigation.

Second, recent experience shows that there is seriality even in class actions: representative bodies often proceed methodically, identifying a sensitive issue in a certain market area and targeting the companies operating in that market one after another. Maintaining a high level of vigilance and knowledge of the class action landscape, even with the help of external consultants, to be engaged preferably before it is too late, certainly helps to anticipate the emergence of collective litigation.

Third, it is common (and in some cases even required by law) that, before initiating a class action, a dialogue between the parties is established (especially in the case of representative actions). A careful assessment of costs and benefits often allows for the prevention or amicable resolution of disputes, avoiding the significant costs of a collective proceeding (not only in terms of passive claims but also of attorney fees, court expenses, publication of the judgment - often ordered by courts - in national newspapers or expensive campaigns of individual communication to users/customers).

Fourth, although discovery is not possible in Italy, collective redress mechanisms allow a wider disclosure of documents for which companies should prepare in advance of the litigation. 

The English consumer class action landscape has experienced continued growth during 2024. This can partly be attributed to the growing availability and sophistication of litigation funding, enabling more consumers and claimant firms to pursue collective redress. Activism by consumer advocacy groups in a range of areas, sometimes on a pan-European basis, has also contributed to the expansion of consumer class action claims. Many groups in England and Europe collaborate in relation to the enforcement of consumer protection law. The English landscape is also — and inevitably — influenced by developments in the US. 

The English courts have a range of innovative and flexible mechanisms for the management of such claims. The goal includes trying to manage the burden that consumer claims create for the judicial system and the overall legal costs involved in bringing and defending such claims. Throughout 2024, we have seen developments in a broad range of consumer claims managed under Group Litigation Orders (GLOs), 'same interest' representative actions, as well as Collective Proceedings Order (CPOs) before the Competition Appeal Tribunal (CAT) (usually on an 'opt-out' basis).

The use of the CAT is increasingly popular for consumer claims that allege an abuse of market dominance by the defendants. 2024 was not without its setbacks for claimants. Defendants defeated the first opt-out consumer class action to reach judgment; a litigation funder tried unsuccessfully to block a £200m settlement of a consumer class action whose headline value was £10bn. The English courts also provided some welcome guidance on the operation of representative actions.  

The use of group proceedings — the relatively recently introduced procedural regime — took off in Scotland in 2024, with a series of consumer greenwashing claims against diesel manufacturers proceeding.

Collective actions will continue to rise, as will third-party funding of consumer claims. England's legal and procedural framework increasingly supports different mechanisms that enable collective redress and the number of such cases will continue to increase. 

We anticipate significant group litigation under the recent Digital Markets, Competition and Consumers Act, which significantly expands consumer protection law in this jurisdiction, which could be in the CAT under CPOs, or added to claims managed under GLOs. The English government is reviewing our domestic product safety regulation framework in the context of the Product Regulation and Metrology Bill. More rights may soon accrue to consumers, and with them, more angles to bring collective actions. 

Litigation funders' assets are increasing, with market participation from a wider pool of participants. The English courts are a center for environmental claims against businesses. 

As AI functions become increasingly integrated with consumer products and services, and the UK begins to establish and clarify the regulatory framework, we expect a new category of consumer collective action to emerge.

In 2024, we saw a continued rise in consumer class actions, with contamination cases remaining at the forefront. These lawsuits have hit various consumer industries, including food, household, and personal products. Particular attention continues to focus on PFAS chemicals, a class of synthetic chemicals used in a variety of industrial and consumer products. Although Plaintiffs’ lawyers have been suing over PFAS for years, the earlier litigations were environmental contamination cases. In recent years, as regulations and awareness of PFAS have expanded, so too have the companies and industries targeted and the types of PFAS-related claims asserted. Consumer activists and certain plaintiffs’ law firms have initiated aggressive campaigns to test entire categories of consumer products, apparel, cosmetics, beverages, and food packaging materials for the presence of PFAS and expose the results. Lawsuits have quickly followed. Today, if PFAS are found in a company’s finished product — even in trace amounts and/or as an unintentional consequence of environmental contamination — the company is at risk of litigation. 

Typically, plaintiffs allege that a product’s label was false or misleading because the product contains PFAS but was marketed as “all natural,” “safe,” “sustainable,” or “free of toxic chemicals,” among other representations. Many PFAS plaintiffs rely on testing co-opted from third-party sources (e.g., Consumer Reports, bloggers, non-profit organizations), while others conduct independent testing through third-party labs. These testing results may be influenced by contamination during the testing or sampling process or by interference from non-PFAS substances that can mimic a positive PFAS result. The results often suggest that products were subject to inadvertent PFAS contamination during the manufacturing process or afterwards. In fact, many companies faced with this litigation are unaware that their products contain PFAS.  

These claims survive motions to dismiss in many cases so far. For example, in a class action alleging that anti-fog spray was marketed as “safe for use” even though it purportedly contained PFAS, the court held that whether a reasonable consumer would interpret those representations as relating to PFAS was a question of fact that could not be resolved at the motion to dismiss stage. Recently, courts are more likely to grant a motion to dismiss for lack of standing if a plaintiffs fail to allege that they tested their own purchases for PFAS, directly.

Consumer class actions based on alleged product contamination, such as PFAS, lead, and other heavy metals, continue to be a focus of the Plaintiffs’ Bar. In addition, several ingredient class action lawsuits have been filed alleging that companies are misleading consumers by claiming their products are “natural” or “preservative-free” when they are alleged to contain unnatural ingredients such as ascorbic or citric acid. Given the risk of contamination/ingredient litigation, companies should conduct a review of all labelling, marketing, and commercial claims to ensure that they are truthful, not misleading, not deceptive, and have adequate substantiation/support. Be mindful of PFAS-related claims. Consumer companies should also require suppliers to provide certifications that PFAS is not used in the manufacture of their products and consider whether it is appropriate to require suppliers to conduct periodic testing. Finally, consumer companies should consider testing raw materials and/or finished products as part of the quality system, and take steps to remove or warn as appropriate.