13.04.2015
Agenda
I.
Introduction
II.
„
Under-enforcement“
III. Procedural Approaches
Atomized Losses in Tort Law:
Conceptual Difficulties and Modern
Developments
IV. Substantive Law Approaches
Georg E. Kodek
VII.Conclusion
V. Transgressing the boundaries of tort law?
VI. The Driving Factor: The Private Enforcement Debate
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I. Introduction
Terminology
 Distributed damage, scattered loss, scattered damages,
dispersed trifle losses
 “atomic” losses
 “Distributed damage is damage (a) that is suffered by a
large number of persons as a result of the single act or
activity of a single person, and (b) in respect of which the
probable litigation cost for each victim exceeds the
probable damages award to him.”
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„
Examples
 acid rain case
 price-fixing
 taxi case
 mobile-phone overcharging
 Consumers’ Association v JJB Sports (T-shirts, GBP 5 – 20 per
T-shirt)
 defective product
 systematic “underfilling” of bottles
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II. Under-enforcement“
III. Procedural Approaches
 “under-enforcement”: the law of damages cannot
adequately fulfill its functions of compensation and
deterrence. (??)
 victims remain uncompensated and possible tortfeasors
remain unsanctioned.
 equity principle: wrongdoers should not profit from their
wrongdoing
 instrumentalist theories of tort law
 “opt out”-type class action
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 Cy-pres In this case some or all of the award (or settlement) goes
to to a group that is not identical to the class but “whose interests
reasonably approximate” those pursued by the class.
 Market Street Railway Co. v Railroad Commission, 171 P2d 875, 881
(Cal), cert. den. 329 U.S. 793 (1946)
 State v Levi Strauss Co., 41 Cal 3rd 460 (Cal 1986).
 In re Vitamins Cases, 107 Cal App4th 820 (Ct App 1 st Dist 2003)
 In re Microsoft I-V Cases, 135 Cal App4th 706 (Ct App 1 st Dist 2006)
 But: In re Holocaust Vicitim Assets Litig., 311 F Supp 2d 407 (EDNY
2004)
 notions of standing expanded by allowing certain institutions
such as consumer associations to bring suit on behalf of the
entire class
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IV. Substantive Law Approaches
 punitive damages
 (cy-pres award)
 disgorgement of illegally obtained profits
V. Transgressing the Boundaries of
Tort Law
 Are we still talking about tort law?
 Purpose of tort law:
 rights-based v. instrumentalist approach
 Civil law: compensation and deterrence
 Atomized losses: no individual compensation of individual
claims, emphasis on deterrence
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VI. The Driving Factor: The Private
Enforcement Debate
 Are we still talking about private law?
 Law governing relations between private individuals
„
„
 relational“ nature of private law, principle of mutual justification“
 Is there a difference between the interests of a large number of
individuals and „public“ interest?
 Consequences
 No consequences for application of Art 6 ECHR (wide notion of
„civil rights“
 consequences for jurisdiction under Brussels Ia Regulation
 actions by public bodies possibly fall outside its scope of application or
at least outside the scope of application of the provisions for consumer
actions
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 Encreased reliance of European Commission on private
enforcement since early 2000s
 The origins of the „passing-on defense“ – a reminder:
 Hanover Shoe 392 US 481 (1968)
 (therefore) no standing of consumers: Illinois Brick Co v Illinois,
431 US 720 (1977)
 State law: „Illinois Brick repealer statutes“ (e.g. Clayworth v
Pfizer Cal. 2008)
 Antitrust damages directive Art 13
 “The defendant in an action for damages can invoke as a defence
against a claim for damages the fact that the claimant passed on
the whole or part of the overcharge resulting from the
infringement of competition law.”
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