INTRODUCTION

In situations involving mass harm, victims may not bring a suit because the costs and risks outweigh the expected benefits, so that they stay ‘rationally apathetic’. Or they wait for others to start a procedure on which they can free-ride, with the possible result that no one actually brings a suit. This is a problem from the perspective of compensation, but also from the perspective of confronting tortfeasors with the losses they have caused to incentivise them to change their behaviour.

Here we analyse collective actions as a possible remedy for these problems. We do not distinguish between various forms of collective actions, but focus on the common general principle of collective actions, namely that one collective claim instead of a series of individual claims is brought.

We discuss the possible advantages (section 2) and disadvantages (section 3) of collective actions. We then focus on the issue of the financing of collective actions (section 4). By way of an example, we briefly comment on the recent EU Directive (section 5), before concluding (section 6).

ADVANTAGES OF COLLECTIVE ACTION

INTRODUCTION: THE CHALLENGES OF PRIVATE ENFORCEMENT

Law and economics studies law in its capacity to provide incentives to legal subjects. In the context of this book, the topic of negative externalities is especially important. These are costs that are not borne by the actor who causes them. The actor may therefore undertake the activity too oft en and/or take too few precautions which could limit or avoid the loss.

Law can address this issue via regulation, tax law, criminal law and tort law. In order for law to provide the desirable incentives, it must be enforced. This can be done via public and private enforcement. This chapter focuses on the latter.

There are several challenges for private enforcement. Bringing a claim is costly. In addition, it may be difficult to correctly assess the costs, benefits, and chances of success, so that uncertainty plays a role. If the assessed costs outweigh the compensation that a successful plaintiff receives, they may remain rationally apathetic and not bring a claim. This problem is most pressing in situations of scattered losses. A subsequent challenge is that victims may not bring a claim in the hope that others do.

INTRODUCTION

It is striking that this book puts harmonisation and codification in environmental and energy law again on the agenda. At first blush that may seem surprising. Looking at the literature one can easily see that the codification of environmental law was an issue that was high on the agenda in the last decade of the previous century. A team around the famous Ghent Professor Hubert Bocken devoted an entire conference to the codification of environmental law and dedicated a book to that topic. But that conference took place on 21–22 February 1995, more than 25 years ago.

The popularity of a codification of environmental law in that period can partially be explained by the fact that environmental law had emerged as a rather scattered body of various sectoral laws that in many countries was spread over a wide variety of different statutes and regulations. It can therefore be understood that codification, in the sense of bringing together all existing environmental legislation in one legislative document, was popular in that period. It was popular in academia, but the concept of codification was also popular at the policy level; in many European Member States some harmonised environmental law had been introduced or was at least discussed. Already in that period the objectives of codification were discussed whereby a distinction was made between, on the one hand, a simple bringing together of existing environmental laws into one legislative document and, on the other hand, a more substantive operation whereby, for example, procedures and enforcement would also become harmonised. The first type of operation is more a coordination of existing environmental law and could be qualified as a restatement, which mostly provides esthetical benefits and the benefit of easier access to the contents of environmental law. This type of coordination was described by Gilhuis as a middle point between the totally segregated sectoral environmental legislation, which still existed in many Member States at that time, and fully integrated harmonised environmental law. Codification was considered also a more substantive exercise, assuming that it would go beyond a restatement of existing laws, but would also harmonise (and thereby improve) permitting, standardsetting and enforcement procedures.

A pecuniary sanction is a widespread criminal penalty and it is hard to think of a jurisdiction that does not have some form of such punishment. The most common pecuniary penalty is undoubtedly the fine. However, when we think about fines, we normally think about the most standard model where the size of the fine mainly depends on the severity of the offence. We refer to those fines as fixed fines, even though they might have other names in different criminal justice systems (for example summary fines, lump sum fines). A common feature of this type of fines is that the financial state of the offender does not play a systematic role in its calculation. This is not to say that the financial information is completely irrelevant. Some jurisdictions require accounting for the offender’s income or wealth and more particularly his or her capacity to pay the fine when deciding on its size. However, there is no requirement to account for it systematically and usually there are no guidelines on how the financial capacity should be considered.

This chapter, based on the reviewed countries’ experiences, provides a comparative analysis of the day fines system in Europe. It seems that making the sentencing system more equal, and reducing short-term imprisonment, are common goals for countries to adopt day fines. Some countries can be rendered as a success in terms of the extent of implementing day fines and the ability to meet the desired goals. Nevertheless, as the experience of many other countries shows, there can be major challenges for day fines to be properly implemented. The main two challenges identified in this chapter are the complexity of calculating the fine, exacerbated by the frequent lack of guidelines, and a negative perception, derived mainly from lack of understanding of the system (by the public) and lack of support from the sentencers. In this chapter, we provide policy recommendations how to address these two specific challenges, as well as more general recommendations to expand the use of day fines. Given the multiple advantages day fines offer, it seems worth investing in its proper implementation. These recommendations may assist jurisdictions who already implement day fines, well as those interested in introducing this model into their criminal justice system

COMPENSATION FUNDS IN GENERAL

WHY ARE COMPENSATION FUNDS NEEDED?

In recent decades the Netherlands have been confronted with various types of catastrophes. In some cases, this concerned natural disasters, particularly an earthquake in Southern Limburg, flooding in south-east Netherlands and heavy rains. There were also man-made disasters that led to a lot of attention in the media. In particular, the explosion of a fireworks factory in Enschede, the large fi re in a cafe in Volendam,a Legionella epidemic in Bovenkarspel,Q fever in the south of the Netherlands, the shooting in Alphen aan de Rijnand the crash of the MH17 on 17 July 2014 in the Ukraine killing all 283 passengers and 15 crew on board, 6 were incidents that hit many victims. In all of these cases the question arose as to what legal instruments could be used to provide compensation.

Dutch legal writers have oft en pointed to the difficulties that victims will encounter in their attempts to obtain compensation for the financial consequences of catastrophes through normal methods. For instance, the possibility to apply tort law in cases of natural disasters (such as flooding or earthquake) will oft en be difficult for the simple fact that a liable injurer may oft en be lacking.

This issue has thus given rise to various occasions when the Dutch government has indeed intervened with a public budget to provide ad hoc compensation to the victims, albeit that the legal arrangements in that respect are not unified and that the arrangements have been the subject of criticism. As will be highlighted below, a specific Act ( Wet Tegemoetkoming Schade bij Rampen, ‘WTS’) was created with the aim of providing a – more or less – general tool for compensation to the victims of catastrophes.

Another main argument can be found in the shortcomings of tort law in specific situations. Sometimes it is felt that it is not fair or too harsh for the victim to prove wrongful behaviour of the tortfeasor. For example, in cases of an unmotorised victim in a traffic accident with a car. In most legal jurisdictions tort law has been modified in order to give the unmotorised victim a more favourable position.