Last updated: November 2025
The Representative Actions Directive (Directive 2020/1828) (RAD) introduced rules, at an EU level, “to ensure that a representative action mechanism for the protection of the collective interests of consumers is available in all Member States.” In summary, this allows organizations and public bodies to seek redress on behalf of groups of consumers through representative actions (including cross-border representative actions).
The implementation period expired on 25 June 2023. However, RAD has not yet been fully transposed by all Member States. To date, only a limited number of claims have been initiated under RAD across the EU.
What are the key takeaways?
- A mandatory class action regime has been implemented at EU (cross-border) and domestic level.
- This regime provides consumers with enhanced rights to seek compensation from traders that infringe consumer rights on a mass scale.
- “Qualified entities” can bring representative actions on behalf of consumers. Qualified entities are organizations or public bodies designated by a member state that represent consumers’ interests, and they must comply with certain criteria. Qualified entities are not restricted to bringing actions in their home country, and they can bring cross-border actions and even join forces to bring proceedings in a specific local court. A list of qualified entities authorized to bring domestic representative actions is published on Member States’ national websites, while those authorized to bring cross-border actions are listed on the European Commission’s website.
- Member States have the option of choosing between an opt-in mechanism, an opt-out mechanism (US-style) or a combination of the two. Member States can also determine at which stage of a representative action consumers can exercise their right to opt in or out. In an opt-in mechanism, consumers must expressly sign up to be represented by the qualified entity in the representative action for redress measures, whereas in an opt-out mechanism, consumers are deemed to be represented if they fall within the represented class, unless they explicitly express their wish not to be represented by the qualified entity in the representative action for redress measures.
- It has been left to Member States’ discretion as to whether the representative action can be brought in judicial or administrative proceedings.
- Remedies must include injunctive measures and financial redress. Redress includes remedies such as compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid, as appropriate and as available under EU or national law.
- To support the efficient operation of representative actions across Member States, the “EC-React” online platform provides designated users (including member state representatives, qualified entities and members of the judiciary) with tools for information exchange and document depository, as well as search and translation functionalities.
- Safeguards are in place to protect businesses against abusive lawsuits by using the “loser-pays principle.”
- As far as third-party funding of litigation is permitted under national law, RAD encourages transparency about its use and stipulates that Member States shall ensure that conflicts of interest are prevented and that funding by third parties (that have an economic interest in the action for redress measures) does not detract from the protection of the collective interests of consumers.
What impact will this have on you?
The range of industries that are impacted by this legislation is vast and its application to consumer protection-related areas is wide. The industries include financial services, travel and tourism, energy, health, telecommunications, and data protection, as appropriate and available under EU or national law. EU legislation that falls within the scope of RAD is listed in Annex I. From 2 August 2026, the AI Act will be added. The strengthening of consumer access to justice may increase many companies’ litigation exposures, particularly in Member States that have previously had no or only limited collective action procedures.
