The processes involved with class action suits in Denmark

How does the process of initiating a class action lawsuit differ in Denmark compared to other jurisdictions?

In Denmark, class actions are generally initiated by potential members opting in the class action, cf. section 254 e, subsection 5 of the Administration of Justice Act, and section 16, subsection 1 of the Act on Access to Class Actions for the Protection of the Collective Interests of Consumers (the Implementation Act). See question five for further information.

This differs from other jurisdictions, such as the United States (US), which principally uses an opt-out model where members of the class action are automatically included in the lawsuit unless they actively opt out. This results in larger class action sizes and potentially more efficient resolution of class action claims.

Are there any recent developments or trends in Danish class action law that global general counsels should be aware of?

There has been a recent increase in the utilisation of the Danish class action system, with 74 class actions brought from 2008 to 2023. This is partly due to the implementation of the European Union (EU) Directive 2020/1828, which has broadened the scope for representative actions, the possibility of third party funding and facilitated cross-border class actions within the EU.

What are the primary criteria for determining class certification in Denmark, and how do they compare to standards in other countries?

Danish law specifies strict criteria for determining class certification, outlined in section 254 b, subsection 1 of the Administration of Justice Act, and in section 12 of the Implementation Act. The following criteria are common to
both acts:

  1. The claims must be similar in essence.
  2. Class action must be the best processual option.
  3. The group members can be identified and are notified about the class action suit.

These criteria are generally stricter compared to other countries. For instance, in the US the Rule 23 of the Federal Rules of Civil Procedure governs class action standards with a lower threshold. Although individual circumstances may vary, a class action can be brought as long as there is a common issue that affects all members.

What are the potential advantages and disadvantages of pursuing a class action lawsuit in Denmark versus other jurisdictions?

Regarding the potential advantages, it should be noted that the certification process are relatively strict, which ensures legal oversight and control. This results in more carefully managed class actions and fairer outcomes for all parties involved. In addition, class actions are initiated by approved organisations or authorities, which ensures that the interests of the class members are effectively represented.

As regards to the disadvantages, it should be noted that it may be difficult for potential claimants to meet the criteria in relation to the Danish certification process for bringing a class action. In addition, the availability and scope of Danish remedies in class actions may be more limited than in jurisdictions with more claimant-friendly frameworks. This may have an impact on the use of class actions as an expedient to obtain compensation or redress.

How does the Danish legal system handle issues such as opt-in versus opt-out class actions and settlement approval in class action cases?

After the Administration of Justice Act, the opt-in model is the main rule. However, the court can decide that the opt-out model is more advantageous to a specific class action suit.

After the Implementation Act, class actions suits regarding redress can only be opt-in, cf. section 16, subsection 1 of the Act. With regard to class action suits regarding preliminary enforcement notice or injunction, these can be conducted without any consumers having opted in to the suit, cf. section 13, subsection 3.

All settlements in class action cases require court approval to ensure they are binding towards all parties of the case and the registered consumers, cf. section 254 h of the Administration of Justice Act, and section 19, subsection 3 and 4, of the Implementation Act.

Are there any notable precedents or landmark cases in Danish class action law that have shaped the current legal landscape?

Significant class action suits, such as the OW Bunker securities claims, have shaped the legal landscape. This is due to the Danish Supreme Court’s acceptance of third-party funding at a group level in 2017, despite the lack of specific Danish regulatory guidance at the time.

What are the typical remedies available to plaintiffs in successful class action lawsuits in Denmark, and how do they differ from remedies in other jurisdictions?

The remedies available in successful class action suits are typically payment of damages, restitution or declaratory remedies.

How does the Danish legal framework address issues of jurisdiction, venue, and choice of law in cross-border class action cases?

In relation to cross-border class action suits, international claimants can take part in Danish class action suits, if the criteria set out in section 254 b, subsection 1 of the Administration of Justice Act, and section 12 of the Implementation Act, are met. In order to participate in a Danish class action suit, it is a condition that the legal venue for all claims must be in Denmark.

In relation to choice of law, if a cross-border class action suit is pending before the Danish civil courts, the legal basis for the court’s judgment is Danish law. There are no rules under Danish law preventing arbitration from being used for class action suits. If a cross-border class action is pending before an arbitral tribunal, the parties of the class action suit has a broader access to enter into an agreement regarding the legal basis for the arbitral tribunal’s decision, cf. section 28 of Danish Arbitration Act.

What strategies should global general counsels consider when navigating the complexities of class action litigation in Denmark, particularly in terms of risk management and dispute resolution?

In terms of risk management, the difficulty of meeting the strict criteria for class certification should be considered. See question three for further information.

With regard to dispute resolution, alternative methods of dispute resolution should also be considered, in particular aiming to settle many individual claims before going to court. Even if a class action is brought before the court, a settlement in favour of the consumers may be considered, but this requires court approval, cf. section 254 h of the Administration of Justice Act and section 19 of the Implementation Act.