T.M.C. Arons

Recognition of US Class Actions or Settlements in Europe

With the Morrison-judgment, access to US securities class actions is denied for non-US transactions. Granting preclusive effect to class settlements concluded with European investors should prevent re-litigation before European courts. Recognising US class action/settlement judgments under Dutch, French English and German law requires the following: (1) the US courts must have had jurisdiction; (2) the class must have been properly notified; (3) opt-out mechanisms must not be manifestly against public policy; and (4) interested parties must be sufficiently informed. Absent class members are bound unless they explicitly opt out. European jurisdictions (recently) allow for a similar binding effect. The Dutch WCAM and the English representative actions have opt-out features. The German Capital Market Model Case proceedings is based on the opt-in model; only persons bringing a claim before a (lower) court are bound to the outcome of the model case proceedings. The recently adopted French collective action proceedings are also opt-in, however, filing an individual (damage) claim is not required at the first stage in which a representative organisation requests the court to rule whether the defendant acted tortiously towards the represented group.