The New Collective Action for Redress

On 13 October 2023, the Act to implement the EU Representative Actions Directive came into force, opening a new chapter for collective redress in Germany. At the centre of the reform is a new German Consumer Rights Enforcement Act creating a new representative action for redress measures which will allow qualified entities to enforce individual consumers’ rights in civil-law disputes.

In addition, the rules for actions for injunctive measures as well as actions for disgorgement have been revised to further collective redress in Germany.

The new regime of collective redress goes far beyond the mandatory rules of the Representative Actions Directive in particular because it is applicable not only to infringements of European law but to all civil-law disputes. Actions for redress measures could become particularly relevant in relation to damages claims for GDPR infringements, product liability cases, consumer contracts, antitrust damages claims, capital investment cases and the enforcement of the EU Digital Markets Act and Digital Services Act.

How will the new action for redress measures work and what are the implications for Germany’s system of collective redress?
Will the new regime provide businesses with greater legal certainty or just increase their risks? And how does the new regime affect the role of litigation funders in Germany?