By Lorraine Mallinder
European Voice
17.04.2008
For those who fear the arrival of class-action culture in Europe, US litigator Michael Hausfeld has a worrying message. “Europe is on the right path,” he says with quiet conviction.
Hausfeld, a partner at Washington, DC, law firm Cohen Milstein Hausfeld & Toll, is a pioneer of group litigation. A brand name in the US, he has built a heavyweight reputation with a string of high-profile lawsuits. His clients have included native Alaskans hit by the Exxon Valdez oil spill and victims of the Holocaust in their action against Swiss banks.
Now, mindful of crucial legal reforms underway in the UK and at EU level, Hausfield is going global. The expansion appears to be working out as planned. In February, a mere 13 months after setting up offices in London, he won a settlement for UK victims of the British Airways-Virgin Atlantic price-fixing scam, a case before the US courts. The victory, in which UK citizens were compensated on an equal footing with their US counterparts, set an important precedent in transatlantic legal history.
Softly spoken Hausfeld does not correspond to the jaundiced European prejudice that assumes mass litigators are major opportunists. His response to corporate scaremongering is simple. He speaks with clear-eyed conviction of righting wrongs and restoring integrity to markets. “The first principle is to recognise that there are wrongs committed by governments, companies and individuals which affect masses of people,” he says. “In responding to that reality, the issue is whether there is a judicial system that provides meaningful access to justice for those wrongs.”
The attitudes of wary boardrooms, which view litigation as “an affront to the nobility and character of European business”, are evidently a source of vexation. “You can’t profess an antipathy to litigation when you have no proclivity to negotiation,” he says.
“One of the core arguments of EU business and legal society is that Europe... prefers to negotiate. But, in the multiple dozens of infringements found by the European Commission in the last five years, how many infringers have voluntarily offered to restitute victims of misconduct?”
Hausfeld is in no doubt that Europe is ready for class-action litigation. The Commission’s white paper on private enforcement of antitrust law, unveiled earlier this month, highlighted the billions of euros lost each year to illegal price fixing, often perpetrated by the same offenders over and over again. “It’s one thing if you beat someone round the head once, even twice. But three, four, five times, someone’s not getting the message,” he says.
Even if the Commission is convinced about the need for effective mechanisms of collective redress, the debate is still restrained compared to the US. No-win no-fee arrangements, for example, are still not allowed, and seen as a means for greedy lawyers to rake in fat profits for themselves while leaving complainants with peanuts. This, says Hausfeld, is a myth. In the US, fees in collective actions are actually set in the court, he claims.
Class-action, to Hausfeld, is common sense. He quotes from a judgement delivered by Lord Hatherley in the 1870 case Warrick vs the Queen’s College, Oxford: “I take it that the view of this Court is, that all persons having a common right, which is invaded by a common enemy, although they may have different rights inter se, are entitled to join in attacking the common enemy in respect of the common right.”
“It’s not like this concept is brand new,” he says.
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