A story at Forbes.com provides a nice analysis of the possibility that the well-publicized Deutsch Telekom trial could open the door to more class action litigation in Europe. http://www.forbes.com/markets/2008/04/08/deutsche-telecom-claim-markets-equity-cx_jm_0304markets20.html. The trial, which began on Monday, involves claims of shareholder fraud brought on behalf of approximately 16000 shareholders.
As the Forbes article points out, the case became possible due to a recent change in German law that allows mass claims to be pursued in certain types of cases. This change comes as other EU countries are considering class action reforms (See my April 1 entry here). The article also remarks that the EU is considering the possibility of adopting a uniform class action law. Aside from the opt-in vs. opt-out distinction discussed in my April 1 entry, the article points out another key aspect of the law of many European countries that my provide a barrier to expansion of class actions in Europe is the use of the “loser pays” rule for awarding attorneys fees. This differs from the “American rule” in which both parties pay their own fees and costs absent statutory authority to the contrary.
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