The reputational impact of the new Collective Redress Act: a turning point for businesses and consumers?, by Diana Jennen

The recent approval by the Spanish Council of Ministers of the draft Collective Redress Act marks a milestone in consumer rights protection in Spain. From the perspective of corporate reputation, this legislative reform introduces a new paradigm that businesses cannot afford to overlook. The increased ability for organised groups to pursue claims with greater ease and legal backing strengthens the position of consumers, but also exposes companies to heightened public scrutiny in the face of collective legal action.

The new regulation, aligned with Directive (EU) 2020/1828, grants a central role to consumer associations, the Public Prosecutor’s Office, and other designated entities empowered to bring collective actions. This reinforces strategic litigation from the standpoint of consumer protection and could lead to a proliferation of high-profile legal cases with significant media exposure.

For businesses, the reputational risk lies not only in the outcome, but in the process itself. With cases affecting large numbers of consumers and brought collectively, public interest is likely to increase—heightening the risk of reputational damage even before any verdict is issued. In this new landscape, the way litigation is communicated becomes critical.

Companies must adopt proactive Litigation PR strategies

To effectively manage the public narrative around legal proceedings, companies must embrace proactive Litigation PR strategies—mitigating reputational harm and ensuring their position is clearly communicated.

Key elements to consider include transparency and anticipation: corporate communications should be clear, timely, and well-structured in the face of potential litigation. The traditional approach of silence or opacity may foster negative public perception.

Moreover, beyond consumers, businesses must carefully manage relationships with investors, partners, and other stakeholders who may be influenced by developments in collective litigation. The spread of information via social media and digital platforms can further amplify the impact of a collective action, making robust narrative control all the more essential.

Over the medium to long term, this reform may reshape perceptions of corporate responsibility. Firms facing repeated collective claims may see their reputation deteriorate if communication and case management are not handled appropriately. In this regard, Litigation PR is not merely a tool for crisis response—it is a preventive strategy that reinforces a company’s credibility and public trust.

A stronger regulatory framework may drive enhanced compliance efforts

The existence of a more solid legal framework could also prompt companies to strengthen their Compliance policies and pre-empt potential disputes with consumers. Those that anticipate these changes and establish effective channels for dialogue and complaint resolution will be better positioned to thrive in this evolving environment.

The new Collective Redress Act does more than reshape the legal framework—it redefines the power dynamics between businesses and consumers. Corporate reputation will be more exposed than ever to the pressure of well-organised, media-sensitive group actions.

In this context, companies that invest in intelligent Litigation PR strategies and proactive communication management will be best placed to protect their image and mitigate the effects of this new legal reality.

You can read the full article in Expansión.