What, if any, are the collective redress (e.g. class action) mechanisms in your jurisdiction?
Litigation (2nd edition)
Austrian law provides for a kind of group litigation that differs from typical class action concepts like in the United States. The “Austrian type of class action” allows multiple claimants to assign their claim to a third party, usually a specific association such as the Consumer Information Association or the Chamber of Employees, with the intention that said organisation raises these claims in one lawsuit on behalf of the assignors against a single defendant.
That being said, Austrian law prohibits other forms of class actions, because only a party that has a substantive claim may act as a plaintiff in a proceeding. Against the background of EU recommendations and various consumer-related scandals, it is an ongoing discussion to reform Austria’s current collective redress system.
Generally, a class action system does not exist in Japan.
However, the “Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers”, which is often referred to as Japan’s version of class action, was passed in 2013 and came into force in 2016.
Under that law, a “Specified Qualified Consumer Organization” files a lawsuit asking for the confirmation of common obligations, which are obligations of companies to pay money to consumers based on factual and legal causes common to a group of consumers. If the court confirms the common obligations, then consumers can essentially “join” the procedure by delegating authority to the Specified Qualified Consumer Organization to file proof of their claims in court. That law only applies to certain types of contracts between a consumer and a company, and the types of damages that can be recovered are limited.
Monegasque law does not provide for collective redress mechanisms.
Chinese court will try a case with multiple plaintiffs and/or defendants if the subject matter of the litigation is in common or the subject matters are of the same type. In such cases, if multiple litigants from one side have common rights and/or obligations with regard to the subject matters of the litigation, once an action of one of these litigants is recognized by all others, this action shall be binding to all the litigants of this side. However, if there is no common rights and obligations pertaining to the subject matters, the litigation actions of one litigant shall not be binding upon the others.
Romanian law does not recognise typical collective redress mechanisms as the United States has, for example. However, the Romanian procedural rules contain particular provisions that relate to cases involving multiple parties, when the parties are under the obligation to appoint one or more representatives, or the representatives must be appointed by the court.
The Civil Procedure Rules do not permit class actions. However, where there are numerous persons having the same interest in a cause or matter, one or more of such persons may be authorised by the court to sue or defend in such cause or matter, as a representative and for the benefit of all interested persons.
Uniform claims from several individuals can proceed as a class action. Usually joining the class action requires an active registration by every potential individual. The main requirement for bringing a class action is that the claim is uniform or fulfils a certain set of conditions ordered by the courts.
Class actions are conducted by a representative on behalf of the group. The representative can be a member of the group, an association when the action falls within the scope of the association's purpose, or a public authority authorized by law to do so.
There are no class action suits in Egypt, however more than one plaintiff may join and raise a joint claim against a single defendant.
Class actions are regulated by Chapter 28.2 of the Commercial Procedural Code. The procedure is applicable in case at least five persons have joined the claim of the applicant by the day of its submission. The Commercial Procedural Code expressly permits class actions within corporate disputes and disputes relating to the professional activity on the securities market. Notably, an applicant does not need to be formally authorized (e.g. to be given a PoA) by other interested persons to file a class claim. Within the preparation of the case for a hearing the court may set the deadline for other potential interested persons to join the claim. Otherwise, any other interested parties are not allowed to file independent claims on similar grounds. The court may inter alia order the respondent to inform all interested parties (including those who have not joined the claim) of the outcome of the case.
Class actions can be commenced in protection of common rights or interests. They seek to obtain relief of the damage and compensation.
Collective actions are initiated by a formal complaint filed before a Federal District Court. In case the claim is admitted, a conciliation meeting is schedule in order for the parties to settle, before the dispute is initiated.
According to the Federal Code of Civil Procedure, there are three types of class actions:
- Diffuse actions: they are not divisible claims brought to protect diffuse rights or interests belonging to an undetermined community. Their purpose is to obtain from the defendant relief of the damage caused. Such repair can consist in the restitution of status prior to the damage or, in case this is not possible, a substitute relief. The existence of a legal relationship between the community and the defendant is not necessary.
- Collective actions in the strict sense: they are not divisible claims brought to protect common rights or interests belonging to a determined or determinable community or group based on common circumstances. Their purpose is to obtain from the respondent the remedy of the damage (usually through the performance or abstention of certain acts), as well as the compensation for damages for each member of the group. It is required for the members of the group to have a legal relationship with the respondent; the relationship must be established in statutory law.
- Individual homogenous actions: they are divisible claims brought to protect individual rights or interests that have a collective impact, belonging to individuals in common circumstances. Their purpose is to obtain from the defendant the specific performance of a contract or its termination, along with the applicable legal effects and consequences.
German law provides for only a few collective redress instruments in mass damages cases. Since 2005, the Capital Markets Model Case Act (KapMuG) facilitates the management of investor-related mass litigation.
In 2018, the German legislature passed a bill that introduced a general Model Case Proceedings Act (Musterfeststellungsklage). The new law entered into force on 1 November 2018. It is limited to consumer matters and should assist consumers in enforcing small claims for damages. The bill does not provide for a class action but merely gives consumer protection associations the right to request a model declaratory judgment (Musterfeststellungsurteil) of the Higher Regional Court on points of facts and law that are common to all consumer claims. The consumer may preserve its rights by registering the claims for damages with the court. Once the court has handed down the model declaratory judgment, each consumer who has registered its claim can initiate individual court proceedings on the basis of this judgment, which has binding effect for both the consumer and the defendant.
In mass damages cases, claimants are increasingly trying to join forces in order to limit their procedural risks by assigning their claims to a third legal entity created for the sole purpose to enforce these claims in court. However, the “litigation vehicle” only complies with the provisions of the German Legal Services Act (Rechtsdienstleistungsgesetz) (cf. Question 22) if the following two conditions are fulfilled: first, it must be officially registered in the legal services register and, second, a third party funder has to support the litigation, so that the claimant holds sufficient reserved funds to cover potential liability for adverse costs.
Unlike many other jurisdictions, Hong Kong does not currently have specific provisions for dealing with multiparty litigation. In May 2012, the Law Reform Commission (“LRC”) published a report, following a three-month consultation period in February 2010, recommending the introduction of a comprehensive regime for multiparty litigation. However, the LRC’s recommendations have not been implemented. Until they are, the only alternative is “representative proceedings” (Order 15, rule 12 of Cap. 4A) which allows one or more litigants to represent all the persons where numerous persons have the same interest in any proceedings.
Rule 33 of the RCCR allows a person to commence or continue a claim as the representative of others with the same interest in that claim. An individual defendant is also permitted to defend a claim as a representative of the other defendants.
A judgment in a case under Rule 33 is binding on all of the other parties represented by that individual. The judgment can only be enforced by or against an unnamed party with the court’s permission.
The Code recognises representative suits under Order I Rule 8, where one person may sue or defend on behalf of all in same interest. The explanation to this Rule states that for the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue/defend the suit.
Further, in India, the concept of ‘public interest litigation’ is also very significant. The courts in India permit public spirited individuals to approach the courts in the interest of public welfare for the redressal of their constitutional and legal rights.
Additionally, certain statutes in India also provide for provisions pertaining to collective redressal. As an example, Section 245 of the Companies Act, 2013 allows shareholders or depositors to initiate appropriate proceedings in case the management or the affairs of any company (other than banking companies) are being conducted in a manner prejudicial to the interest of the company or its members. Similarly, Section 12 of the Consumer Protection Act, 1986 also envisages collective action on behalf of numerous consumers having the same interest.
However, for arbitration proceedings, there is presently no provision of collective redressal under Indian law.
Isle of Man
Under rule 3.33(1) the court may make a group litigation order where there are or are likely to be a number of claims giving rise to group issues. Under rule 3.33(4) a group litigation order may not be made except with the consent of the First Deemster. Rule 11.46 concerns costs where the court has made such an order. Group litigation is rare in the Isle of Man.
The only collective redress currently in force in Italy is governed by article 140 bis of the Consumer Code, which enables consumers having homogenous interests to file a class action against a private corporation in case of (i) breach of contract, (ii) product service liability or (iii) unfair or anticompetitive commercial practice.
Philippine rules of procedure provide for a class suit mechanism, the requisites of which are: (1) the subject matter of the controversy is one of common or general interest to many persons; (2) the parties affected are so numerous that it is impracticable to bring them all to court; and (3) the parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.
Portuguese law does not provide for collective redress mechanisms. The most similar legal instrument would be the “Ação Popular” but this is not commonly used.
This kind of proceeding is intended for the protection of the rights of each and every member of a certain group, despite their own will and related to assets that can be used by all of them in a non-exclusive way.
Several entities (e.g. several plaintiffs) may act as one party - it is a joinder of parties. If more than 10 entities act as one party, the court may rule that only one entity should act on behalf of the joinder of parties.
A joinder of parties may be permissive, inseparable or compulsory.
In permissive joinder of parties, the subjects have separate rights and obligations and each of them acts on their own behalf and the court decides on each claim separately.
In inseparable joinder of parties, there are such joint rights or obligations that the decision on them must apply to all the defendants and plaintiffs joined in the action, which also means that a procedural action of one of the subjects is binding on all the others, that is why for some material procedural actions - e.g. amendment of the action, action withdrawal or claim recognition - consent of all the subjects joined in the action is necessary.
In compulsory joinder of parties, a special regulation makes it mandatory that some parties be joined.
Class actions are available and may be used for any type of claim. However, since the Swedish Group Proceedings Act came in to force, only approximately 30-50 cases have been initiated (no official statistics exists). One of the reasons for this is, for example, that the Group Proceedings Act prevents an effective use of legal aid as most insurance companies have excluded class actions from the scope of the insurance cover.
However, in recent years several high-profile cases between groups of consumers and construction companies as well as financial advisers have been tried by the courts. In these cases, each consumer has pursued its own claim, formally as a separate case. In accordance with the rules for joinder contained in the Code of Judicial Procedure, all such claims brought simultaneously can be been joined into one single trial.
There are various procedural mechanisms which can be used to bring a ‘group action’ in the High Court:
- joint claims by multiple claimants;
- consolidation of separate claims into one set of proceedings which can be managed together;
- group litigation orders (“GLOs”) where multiple individually commenced claims give rise to common or related issues of fact or law; and
- representative claims where one representative acts on behalf of one or more persons with the same interest in the claim (but the “same interest” is interpreted very narrowly). There is also a more liberal collective actions regime for competition law claims in the Competition Appeals Tribunal (“CAT”) where the CAT has a wide discretion to (i) certify collective claims brought on behalf of, for example, victims of a cartel, on an opt-out or opt-in basis; and (ii) approve collective settlements.
There are no mechanisms for collective redress in Bahrain in commercial disputes.
Dominican law does not provide for collective actions, at least not in the commercial arena (class actions are only permitted in constitutional complains to protect, for example, civil rights, as well as in environmental rights and customer protection litigation). In ordinary matters each individual party must prove the capacity and direct interest (i.e., only a contracting party can challenge a contract) in the matter; otherwise the complaint would be inadmissible.
In Indonesia, a class action is regulated by the Supreme Court Regulation Number 1 of 2002 on Class Action Claim. A class action is represented by an appointed proxy of the class members. The prerequisites to file a class action are regulated under Article 2 of the said regulation whereby:
a. the number of the members will make the claim ineffective and inefficient if the claims are submitted individually or even severally;
b. the claims have the same factual backgrounds and legal grounds;
c. the class representative is honest and sincere in defending the legal interests of the class members; and
d. the presiding judge may suggest to the class representative that the lawyer be changed if the lawyer acts in contrary to the obligation to defend and protect the legal interest of the class members.
In Malaysia, class action is generally known as a representative action. The primary rules are provided under Order 15 Rule 12 of the ROC. However, it is essential to note that in a representative action, other rules may also be applicable, as the case may be, such as when there is a need to add, drop or substitute any parties in the course of proceedings. In such an instance, the rules of misjoinder or non-joinder of parties as provided under Order 15 Rule 6 of the ROC will be relevant.
To institute a representative actions, there are three (3) requirements to be satisfied:-
- that all the members of the class had a common interest;
- that they all had a common grievance; and
- that the relief was in its nature beneficial to them all.
In the Chilean legislation there is not a general regulation with regard to the so-called "class actions". There is a class action procedure in the Consumer Protection Law.
Nonetheless, the procedural law regulates the possibility that several people appear as plaintiffs in the same process and against the same person, but in this case all the plaintiffs are active part of the civil process individually, even though they act with a Common solicitor.
As we said, these actions are of great importance in the protection of consumers ' rights, an area where demands are allowed to be filed in the interests of the collective or diffuse interest of consumers.
To bring an action a claimant must show that he has a juridical interest in the case. A number of claimants can bring an action collectively provided each claimant must demonstrate their individual particular interest in the case.
According to the Collective Proceedings Act, Chapter 520 of the Laws of Malta, collective proceedings may be instituted to seek the cessation of an infringement, the rectification of the consequences of an infringement and, or compensation for harm where:
(a) an infringement of the Competition Act, Articles 101 or 102 of the Treaty on the Functioning of the European Union, the Consumer Affairs Act, or the Product Safety Act is alleged to have occurred. The Acts listed in Schedule A are the Competition Act, and Articles 101 or 102 of the TFEU, the Consumer Affairs Act and those Acts mentioned in article 111 of the Consumer Affairs Act, and the Product Safety Act;
(b) an investigation before a public authority or proceedings before a tribunal or similar body or court of civil jurisdiction concerning an infringement of the laws mentioned in paragraph (a) is or are still pending; or
(c) a decision or judgment establishing a breach of the said laws in relation to the same facts has become res judicata.
The person who is authorised to bring the claims in collective proceedings is the class representative. Collective proceedings are filed by means of a sworn application, in the Civil Court First Hall or the Court of Magistrates (Gozo) in its superior jurisdiction.
More recently, in virtue of the Arbiter for Financial Services Act, Chapter 555 of the Laws of Malta, the Arbiter may, if he thinks fit, treat individual complaints made by aggrieved investors against financial services licence holders with the Office together, provided that such complaints are intrinsically similar in nature.
Swiss civil law procedure does not permit US-style class actions; unlike other European countries who have introduced new tailor-made group action devices into their legal systems in the course of the recent decades, Swiss lawmakers have for a relatively long time not accepted the necessity to add new types of collective redress mechanisms (as compared to the traditional possibilities or requirements to introduce actions jointly which will be described below) into Swiss civil procedure law. In the last few years, however, a rethinking has taken place and, accordingly, the Swiss government has taken a first attempt to introduce new collective redress mechanisms in the field of financial services. However, after having been heavily critizised in the lawmaking process, the project was later abandoned. In 2018, the Swiss government took a fresh start by issuing a pre-draft regarding the revision of the CCP in order to expand and improve the possibilities for obtaining collective relief in Switzerland. However, since the revision process is still at its beginning, it cannot be predicted, at this time, whether the revision will be put into effect in the future and in what form (if at all).
According to the law actually in force, claims must typically be brought by individual plaintiffs. However, a number of procedural tools under the CCP require or allow for multiple parties in civil law proceedings to act jointly, be it on the plaintiffs' or on the defendants’ side.
In case of a so-called ‘mandatory joinder of parties’, the claim must be jointly brought by or directed against a group of persons. Whether or not the group members are forced to act or must be sued jointly is a question of the applicable substantive law. In general, this will be the case where the group members have a legal relationship that does not allow for differing decisions as to the individual members of the group. If the action is not jointly lodged by or directed against all members of the mandatory joinder of parties, the plaintiffs or defendants may lack standing, leading to the dismissal of the claim.
The so-called ‘simple’ or ‘voluntary joinder of parties’ allows (i) multiple plaintiffs to bring their claims against one defendant jointly or (ii) a plaintiff to sue several defendants jointly. In contrast to the mandatory joinder of parties, the voluntary joinder merely is an optional way to proceed in cases where the claims relate to rights or duties resulting from similar circumstances or legal grounds. The advantage of this way to proceed pertains to procedural economy, especially with regard to evidentiary proceedings (i.e. evidence relevant with regard to all joint parties must only be reviewed once by the court). However, the claims remain independent from each other and the court must decide each case separately. Unlike the mandatory joinder, each of the voluntarily joint parties may act independently during the proceedings and the judgments rendered by the court may vary as to each individual of the joint parties.
As a further kind of group action, Swiss law permits an association or organisation of national or regional importance whose statutes authorise it to protect the interests of a particular group of individuals to file a claim in its own name but to the benefit of said group of individuals (so-called ‘Verbandsklage’). The associations’ right to bring such legal action is limited to claims regarding the personality rights of the affected group members on the one hand, and to non-monetary relief on the other hand. Thus, the association may request that the court prohibits or puts an end to an (imminent) violation or establishes the unlawful character of a violation in a declaratory judgment. Actions seeking monetary relief are excluded and need to be pursued individually by the affected person or persons.
As mentioned above, political efforts are under way to improve the tools for collective legal protection. In its pre-draft regarding the revision of the CCP, the Swiss Federal Council proposed two major amendments with regard to collective legal protection aiming at facilitating actions for damages for large groups through the existing mechanism of actions brought by associations as well as by introducing a new group settlement procedure. In contrast to the current situation, the suggested amendment of the action brought by an association would allow the association to introduce reparatory actions, such as actions for damages and restitution of profits. However, unlike the US-style class action, the association would only be allowed to claim monetary relief after having been authorised by the individual group members to do so (opt-in mechanism). In addition, the pre-draft regarding the revision of the CCP provides for new settlement procedures for group settlements. However, as mentioned above, it is not yet foreseeable if and in what form these proposals will ultimately be adopted.
Law 2251/1994 on Consumer’s Protection (as amended by Law 3587/2007) introduced as, an exemption, a form of “class action” designed to be initiated by the consumers’ unions aiming at the protection of the general interests of consumers. The union may claim the omission of unlawful actions against the consumer rights (as these as specified by law 2251/1994 as in force), the satisfaction of moral damages suffered by the consumers as well as the ordering of provisional measures to that end.
Class actions can be heard before courts in Norway, but they are governed by special procedural rules and four conditions have to be met in order to bring a class action. First, several legal persons have to have claims or obligations for which the factual or legal basis is identical or substantially similar. Second, it is necessary that the claims can be heard by a court with the same composition and principally in accordance with the same procedural rules. Third, a class procedure must be considered as the most appropriate method of hearing the claims. Finally, the class must agree upon a class representative who will represent the rights and obligation of the class in the class actions. The action shall be brought by submission of a writ of summons to a district court before which a person who qualifies for class membership could have brought an ordinary action.
In Luxembourg, it is not possible to launch a class action. Nevertheless, several defendants with a common interest may bring a joint claim.
The FRCP permit class actions in federal courts only if (1) the size of the class is so numerous that it would be impractical to bring them all before the court as individual parties, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class and (4) the representative parties will fairly and adequately protect the interests of the class. There are additional requirements regarding the permissible types of class actions. Most states have adopted similar rules, but the requirements can vary by jurisdiction.
There is no regulated provision on collective redress under CCP, although there are specific cases in which Iranian law appears to have accepted the concept. Article 48 of the Law on Electronic Commerce and its implementing regulations allow legal and civil organisations in charge of protecting consumers’ rights to file lawsuit on behalf of aggrieved consumers who have made online transactions without any necessity to take their permission.
Dutch procedural law allows two options for collective redress actions.
Injured parties can bundle their claims by giving one person (which can also be an ad hoc foundation or association, also called claimstichting) a power of attorney to act on behalf of all of them; alternatively, they can initiate a collective action based on section 3:305a DCC.
The section 3:305a DCC route enables a foundation or association with full legal capacity (a claim vehicle) to institute an action aimed at protecting similar interests of other individual persons to the extent that the promotion of these interests is set down in its articles of association. The interests of those – both Dutch and foreign – individuals should be of such a nature that they are capable of being bundled, thus expediting the efficient and effective legal protection of the interested parties.
Until recent, section 3:305a DCC only allowed for a declaratory judgment that the defendant has breached his duties or committed a wrongful act against the injured parties. In 2019, a new bill was adopted which introduces the possibility for damages to be claimed in this kind of collective action. The new legislation, which is expected to enter into force on 1 July 2019, further includes (i) the introduction of stricter admissibility requirements for representative entities (e.g. governance, funding and representation requirements); (ii) the appointment of an exclusive representative for all claimants (in case of various representative parties); (iii) a binding judgement on all Dutch residents in a class, with the exception of those having opted out. The opposite goes for non-Dutch residents: those persons can voluntarily consent to their interests having been represented by the class action (i.e. opt in). Alternatively, the court can order that the opt out system applies to a precisely specified group of non-Dutch residents anyhow.
Dutch law also provides for court certification of damages in mass claim settlements (the Collective Mass Claims Settlement Act, ‘WCAM’). The core of the WCAM is contained in sections 7:907 – 910 DCC and sections 1013-1018 DCCP. The WCAM makes it possible for collective interest groups to have an agreement that was concluded with another party (the party causing the loss), declared generally binding at the Amsterdam Court of Appeal in cases of large-scale loss. This (published) generally binding declaration consequently binds the entire group of injured parties, both in the Netherlands and abroad, and accordingly enables a settlement with an undetermined number of injured parties. WCAM proceedings can be and have been used for global settlements with relatively little connection to the Netherlands. The Dutch WCAM proceedings are currently the only European collective settlement that provide for a so-called opt-out option. This gives individual injured parties the option to withdraw (by written declaration, within a certain period) from the order declaring a collective agreement binding.
The possibility to claim damages in collective action, is likely to put increased pressure to settlement claims. It is expected to have a significant impact on the litigation climate in the Netherlands (and possibly the rest of Europe).
Ecuadorian law does not establish so-called “class actions” as separate or special actions. Nevertheless, it is possible for various people to pursue the same right or make the same claim against one or more persons. To this effect, they must designate a court agent from among themselves or the judge will select one of the plaintiffs to act as such. This is the person who will be dealt with in the proceedings, without prejudice of resolving the claim of all.
There are no class actions in the UAE.
Class action (actions on behalf of non-exhaustive group of claimants) are not allowed in Armenian legislation.
On the other hand, a special procedure is envisaged if the number of plaintiffs is reaching at least 20, and where the claim on the same grounds is brought against the same defendant. This special procedure is shaped to make the hearing physically possible given the need for all the participants to participate and make the procedures efficiently. During the hearings, a representative is chosen to act on behalf of the plaintiffs to a collective claim (not more than 5 representatives for a group). If the representative is attending the hearing, the plaintiffs are not allowed to do so (they still can attend as visitor, but not to participate), except if one of the plaintiffs acts as a representative on behalf of the group. The majority of the plaintiffs can change the representative. In case if the minority wants to change the representative, the court separates the proceedings. Only the representative(s) are notified about any judicial decisions. The final or interim decisions can be appealed by the representative.