Jason here. Sandeep Vaheesan (a good friend and colleague of mine at the CFPB) and I wrote an article entitled “The Arc and Architecture of Private Enforcement Regimes in the United States and Europe: A View Across the Atlantic” that has just been published in the University of New Hampshire Law Review. You can read it here. The abstract is below:
“The United States and Europe have traditionally taken very different approaches to the regulation of harmful conduct. Previously, European nations relied almost entirely on the public enforcement of laws, whereas the United States relied on a mix of public and private actors. In the United States, private rights of action have played a central role deterring illegal conduct—and, in fact, provided greater deterrence than public enforcers in some areas of law. They have also allowed injured parties to obtain compensation. Despite their very different histories, the private enforcement systems in the United States and Europe are showing signs of convergence today.
Since the 1970s, industry in the United States has waged a potent public relations campaign against private rights of action. This pro-business crusade has depicted corporations as victims of a litigation explosion and cast plaintiffs and their attorneys as unscrupulous mercenaries. This narrative has little, if any, empirical support. Nonetheless, based on this mythology, the Supreme Court and other federal courts have erected a number of procedural obstacles to effective private enforcement of law.
While private enforcement is in retreat in the United States, the European Union seeks to strengthen private rights of action, with an emphasis on private enforcement of antitrust law. Recent EU initiatives established some of the foundations for private parties to protect their rights in court. European policymakers, however, have as yet declined to establish effective claims’ aggregation and litigation funding mechanisms, citing the business victimhood mythology spread by private industry in the United States. Encouragingly, a few EU Member States have rejected this paradigm and established some of the elements of strong private rights of action. In particular, Denmark, the Netherlands, Portugal, and the United Kingdom have passed laws that are likely to foster effective private litigation.
A comparative analysis of enforcement institutions on both sides of the Atlantic reveals a complex picture. American and European consumers, workers, and other large groups will generally face major obstacles to vindicating their rights. In cases generating larger individual claims, American and European plaintiffs’ lawyers may still be able to use aggregate settlement procedures to hold corporate defendants to account.
When understanding its contribution to the deterrence of harmful conduct, private enforcement has to be viewed together with public enforcement. Because much of the enhancement of private enforcement in the European Union arises in the context of antitrust, it is an area ripe for cross-continent examination. With antitrust, the overall enforcement landscapes in the United States and European Union will likely be drastically different in the medium term. Due to limited public enforcement, a decrease in private lawsuits will severely compromise overall antitrust enforcement in the United States. In Europe, strong public enforcement will offset generally weak private enforcement and result in far more effective protection of consumer rights.”