Summary
The Cefic position paper addresses the European Commission’ s proposal to include a compensation provision in the Industrial Emissions Directive (IED) and potentially in the REACH regulation. The issue at stake for the chemical sector is that such a provision is predicted to incite litigation without ensuring equitable justice. Cefic posits this due to:
1. The absence of procedural safeguards to prevent abuse and commercialization of collective actions.
2. The undue burden of proving non-causal links to health damages shifted to defendants, which can unnecessarily pressure settlements even for baseless claims.
3. The rapid rise of unregulated third-party litigation funding which adds further complexity and risk.
Concrete Takeaways:
- Procedural Safeguards Needed: There should be robust mechanisms to prevent misuse and ensure entities initiating lawsuits do so for genuine, non-profit reasons.
- Burden of Proof Concerns: Shifting the burden of proof to defendants complicates legal processes, potentially leading to unjust settlements.
- Regulation of Litigation Funding: A comprehensive EU-level regulation is necessary to manage the growing influence of third-party funders in litigation.