The Spanish legislator, further to its recognition of the rights and interests of consumers in various laws, has drafted this proposal to implement the more precise requirements of EU Directive 2020/1828 Representative actions for the protection of the collective interests of consumers (‘the Directive’). The Directive leaves the specific (procedural) structural model to Member States.
Although the Directive permits collective actions before either courts or administrative authorities, the Spanish system consistently allows for collective protection before civil courts and tribunals. No modifications are needed in this respect. However, changes are needed in the Spanish civil procedure regulations: namely, regulation of the ‘qualified entities’ entitled to bring representative actions, and legitimisation of authorisation requirements. Acknowledging the need to improve the current Spanish regulations while implementing the Directive, the proposal introduces a special procedure (within Book IV of Ley de Enjuiciamiento Civil, the Spanish Civil Procedure Act 1/2000 of 7 January (‘CPA’)) to systematically address the necessary changes to the rules affected by the Directive.
Key features of the proposed transposition:
- The aim is a coherent, unitary system through a specialised process, but with broad application, covering ‘both the provisions of the Directive (…) in the most varied areas in which a consumer relationship may arise, as well as any other assumption of infringement of consumer rights’ not found in its Annex.
- Creation of the ‘essential tool’ of a Public Registry of Representation Actions to promote transparency and information, for beneficiaries and for judicial co-operation.
- Features a new Title IV under Book VI CPA, comprising 58 articles organised into 3 chapters. In addition, some existing procedural laws are removed entirely, or in part, due to lack of relevance.
- There is a distinction between representative actions for cessation and compensation, and the extra possibility for bringing merely declaratory actions (falling under the cessation limb).
The structure of the procedure (concentrated in Chapter III) is divided into 6 main steps:
1. An initial lawsuit including data on the subjects affected and harmful conduct alleged;
2. Once the claim is admitted, the parties are summoned to a hearing to certify that the claim meets the conditions for a legitimate class action and there is no conflict of interest with third-party funders;
3. If legitimate, the court will issue an order of certification, which determines the scope of the class of consumers affected and must be well-publicised among the class;
4. The process is then adjourned for a period determined by the court, allowing for class members to disassociate themselves from the action (or commit to it if necessary). The relations between the collective action and any individual actions (which will cease to be admissible after this period) can also be addressed;
5. When proceedings have resumed, the defendant must respond to the claim in writing and the parties then make written submissions on the evidence;
6. The court delivers judgment, specifying the precise compensation for each beneficiary, while considering the possibility of a lump-sum amount and any necessary elements to ensure the defendant’s compliance with its orders;
Finally, in addition to the above steps, the legislator notes the possibility for an alternative procedure, consisting of a debate, judgment (and sentence) on liability, further debate and adjudication on the exact amount of compensation to award the beneficiaries of the initial judgment.
- Individual intervention is excluded for greater efficiency.
- Limits and precautions: representative actions will suspend the limitation period of individual actions for compensation, and provisional cessation of the infringing conduct may be requested, without providing security in some cases (Art. 842 CPA).
- Opt-out is the rule. Opt-in is reserved for exceptional cases determined by the court. Accordingly, there is a heightened role for the dissemination/publicity of decisions through a suitable electronic platform. A mechanism for this is established, in line with the Directive.
- Title II, Book I CPA, adapts the Spanish law to reflect the terminology and references used by the Directive, such as inclusion of ‘authorised entities’ and substitution of the new ‘special procedure’ for ‘judicial proceedings’.
- Although an optional aspect of the Directive, the Act (Art. 840) notably requires the entity requesting cessation (in the exercise of a representative action) to have previously requested the employer or professional to cease the conduct in question, at least 15 days prior to the demand; the claim is not admissible otherwise. The Spanish legislator sought to include this provision to promote out-of-court settlement.
- Associations designated to exercise (nationally or in other EU Member States) representative actions are regulated in s. 1 (Title V, Book I CPA), dealing with their legitimacy and requirements for qualification. The entities are re-evaluated every 5 years.
- The content of judgments must be consistent with the complexity of representative actions and the plurality of issues to be resolved, with ‘the highest degree of determination possible’. Lump-sum benefits for beneficiaries are preferred.
- Compensation agreements: an ‘especially novel’ area where the need for protection is evident. There is a rule of ‘general effectiveness’, with the proposal for high-level control. Claimant authorised entities are entrusted with liquidation in enforcement measures, for example.
Amy Adams, under the supervision of Maria José Azar-Baud