Fears are being expressed that the imposition of pan-European laws to give consumers the right of collective redress could damage small businesses.

According to the Financial Times, consumer rights politicians in the European Union (EU) are looking to implement legislation which would enable people in other countries to work together in law suits against companies providing defective goods or services.

However, some business leaders are warning that any changes similar to the system currently in operation in the US could threaten the existence of some small to medium-sized enterprises if a culture of litigation emerges across Europe.

The president of Business Europe, Ernest-Antoine Seilliere, commented that although he fully supports the rights of consumers: "We are strongly against a US-type class action because of the drawbacks of the system."

But some EU commissioners maintain that new rules are needed in order to protect the legal rights of customers who buy goods over the internet from businesses operating abroad.

A total of 15 EU member states currently have no legal provision for class action lawsuits and the 12 which do have such rules only have jurisdiction within their own country.