What, if any, are the collective redress (e.g. class action) mechanisms?
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 his particular interest in the case.
However, under the Collective Proceedings Act, Chapter 520 of the Laws of Malta, collective proceedings may brought under the Competition Act, the Consumer Affairs Act and the Product Liability Act by a class representative in the manner outlined in the Collective Proceedings Act.
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.
Where numerous persons have the same interest in any proceedings, representative actions may be begun and/or continued by or against any one or more of them. However, an order made under the same Rule (to begin or continue representative proceedings) may not be enforced against any person who is not already a party to the proceedings, except with the leave of the Court.
In Koh Chong Chiah and others v Treasure Resort Pte Ltd  4 SLR 1204, the Court of Appeal clarified that not all the interests of each claimant need to be identical, before the ‘same interest’ requirement may be fulfilled. It would suffice if there exists one or more significant issues of fact or law common to all the claimants, the significance of which clearly outweighs the significance of the issues which differ as between the claimants. The Court also retains the discretion to refuse to permit a representative action, if the facts and circumstances of the case warrant the exercise of such discretion.
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.
Spain has a judicial collective redress mechanism called ‘collective action’. It is an opt-out system in which procedural standing is not attributed to a member of the class but to certain consumer associations or to the public prosecutor. Collective actions can involve either a determinate or indeterminate number of parties.
However, it would be misleading to assume that this system is in any way similar to the US collective redress mechanisms, as there are no strict requisites nor is there a class certification process.
In Indonesia, a class action is regulated by the Supreme Court Regulation Number 1 year 2002. 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 where a class action shall fulfil below:
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 the same legal grounds;
c. The class representative is honest and sincere in defending the legal interests of the class members;
d. It is possible for the presiding judges to suggest to the class representative for a change of lawyer if the lawyer act in contrary to the obligation to defend and protect the legal interests of the class members.
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.
Recently, the German legislature passed a bill that introduces a general Model Case Proceedings Act (Musterfeststellungsklage). The new law will enter 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.
Class actions can be commenced in protection of common rights or interests. They seek to obtain from 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.
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.
Monegasque law does not provide for collective redress mechanisms.
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 a “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.
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.
There is no formal mechanism in Ireland to facilitate class action suits. “Representative actions” and “test cases” are the closest procedures to collective redress which exist.
A representative action arises where one claimant or defendant, with the same interest as a group of claimants or defendants, institutes or defends proceedings on behalf of that group. By agreement of the parties, a judgment in the action may bind all those represented.
Test cases may arise where a number of separate claims arise out of the same set of circumstances and one or more parties pursue their case(s), the outcome of which is then considered a non-binding precedent for the subsequent claims.
Besides the group action ("Verbandsklage"), the Swiss litigation system does not know collective redress such as class actions. The group action means that associations and other organizations of national or regional importance that are authorized by their articles of association to protect the interests of a certain group of individuals may bring an action in their own name for a violation of the personality of the members of such group, and may request the court to prohibit an imminent violation, to put an end to an ongoing violation, or to establish the unlawful character of a violation if the latter continues to have a disturbing effect. Given the insignificance of group actions in litigation reality the Swiss legislative is considering to expand the possible remedies also to financial remedies, as is the legislative considering to introduce group settlement procedures as a new tool for a sort of collective action.
Collective redress mechanisms under Chilean law are given by some class actions or collective proceedings in the context of litigation related to certain specific subjects such as consumer protection (Law 19.496 on Consumer Protection), unfair competition (Law 20.169 on Unfair Competition) and quality of construction (Decree in Force of Law 458 DFL on Construction and Urbanism).
Class action is permitted and governed by the Swedish Group Proceedings Act (Sw. lag om grupprättegång). For environmental law, the Swedish Environmental Act (Sw. miljöbalken) contains specific provisions regarding class actions. Anyone who wishes to participate as a member of a class action must give written notice to the court. As a general rule, the group must be represented by a lawyer being a member of the Swedish Bar Association.
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.
There are no class actions in the UAE.
Until recently, class actions were not recognized in Saudi Arabia. A change was recently introduced by the Committee for the Resolution of Securities Disputes, which now permits class actions before it.
A class action can be brought if four conditions are met: Several legal persons have claims or obligations whose factual or legal basis is identical or substantially similar, the claims can be heard by a court with the same composition and in the main pursuant to the same procedural rules, class procedure is the most appropriate way of dealing with the claims, and it is possible to nominate a class representative. A class action can be brought before a district court through a writ of summons submitted by any person who fulfils the conditions for class membership or an organization or association charged with promoting specific interests in line with the action.
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.
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, a working group is currently working on a reform of 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.
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 have 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 much more liberal collective actions regime for competition law claims in the Competition Appeals Tribunal (“CAT”) where the CAT has a wide discretion to certify that claims can continue on behalf of, for example, victims of a cartel, on an opt-out or opt-in basis, and approve collective settlements where appropriate.
Two types of collective redress exist in Danish law: "opt in" and "opt out". Opt in means that affected consumers must actively opt in for the redress action, where opt out results in automatic inclusion with the possibility of opting out. The different mechanisms existing in Denmark are general group actions, the Consumer Ombudsman's representative action and competition group action. Only the Consumer Ombudsman can bring actions according to the opt out model.¨
There are no special rules under Danish law regulating ongoing individual claims relating to the same dispute. Therefore there are no rules stating that a case should be stayed until the collective proceedings are brought to an end. It is possible for the Courts to stay the proceedings when necessary - both when awaiting judicial and administrative decisions possibly influencing the outcome of the case. If a consumer is already party to an individual claim he/she cannot take part in a group claim concerning the same dispute. If the consumer wants to be party to a group claim he/she must discontinue the individual action. If the consumer is not party to the group filing the group claim, the decision regarding this will not be formally binding on the consumer. Nonetheless, the decision may establish a precedent. So far class actions are rare in Denmark, but there is an increasing tendency.
The following types of class actions are provided by French law:
- consumer protection;
- health product liability;
- protection of personal data;
All class actions currently available under French procedural law are subject to an opt-in mechanism.
In addition, French law provides for five other types of collective actions:
- actions for the joint representation of consumers (action en représentation conjointe des consommateurs);
- actions brought in the collective interests of consumers (action exercée dans l’intérêt collectif des consommateurs);
- defence leagues (ligues de défense);
- in defence of ‘important causes’. Specific regulations allow several associations to bring an action before civil or criminal courts in order to obtain damages, where a criminal offence has been committed (e.g. environmental protection associations);
- with regard to competition offences, such as price fixing and unfair competition, Article L490-10 of the French Commercial Code permits professional organisations to initiate proceedings in a civil or commercial court for harm caused directly or indirectly to the collective interests of the profession or sector which it represents.
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.