Types of class action mechanisms. General characteristics

On the 1st January 2008 class action proceedings were introduced into the Norwegian legal system. The regulations were included in chapter 35 of the Norwegian Code of Civil Procedure.
Class action proceedings in Norway are defined as proceedings initiated by a group of persons or against a group of persons and are based on the same factual or legal grounds. Moreover, such proceedings must be recognised as group proceedings by the court.

The class action proceedings may be conducted either in an opt-out or in an opt-in model. Generally, the opt-out model was introduced for small value claims unlikely to be pursued in individual actions, but sufficiently similar not to require examination in separate proceedings.

Therefore, anyone who fulfils the conditions specified in the definition of the group included in the decision on the examination of the case in group proceedings (the opt out model) or each person meeting the conditions specified in the definition of the group included in the decision on examining the case in group proceedings who additionally expresses the will to join the group (the opt in model) may become a member of a group.

The premises of admissibility and the procedure

The motion to proceed the case in group proceedings may be filed by three groups of entities:

  1. an entity having the capacity to be a group member,
  2. a group representative,
  3. a public organisation, if the class action pertains to issues within its operating range (for example consumer ombudsman).

The motion for examination of the case in group proceedings should include information whether the class action is to be conducted in an opt-in or opt-out model.

The Norwegian solution is an example of a horizontal attitude – there is no objective restrictions regarding cases which may be pursued in group proceedings.

To pursue the case in group proceedings, the following requirements must be met:

  1. several entities must have claims based on the same legal or factual ground,
  2. all claims must have the capacity to be examined by the same ruling bench, following the same procedural rules,
  3. class action proceedings must be the most suitable way to pursue claims,
  4. it must be possible to appoint a group representative.

The Norwegian legislator did not stipulate the required amount of group members to prosecute the case in group proceedings.

The group proceedings are two-stage, they consist of certification and examination proceedings. Deciding on the examination of the case in group proceedings, in its decision the court specifies the scope of claims which should be examined in group proceedings. It is worth mentioning that at the later stage of the proceedings, the court may change or withdraw the decision on examining the case in group proceedings.

Following a decision on certification, the court must ensure that the parties who may become group members are notified of the ongoing group proceedings. Usually, a public announcement is made in order to meet this requirement. If it is possible and if the practical issues allow, group members should be informed about group proceedings by mail.

The type of relief (legal protection) that can be obtained (court decision)

Due to the lack of the specified scope of cases which may be examined in group proceedings as well as the legal protection, which may be given to the group members is the same as in any other civil proceedings. Yet, it should be indicated that compensation claims feature among the ones most often pursued in group proceedings. Compensation is granted to each party individually according to the amount of damage suffered. However, in some cases standardisation of claims may apply.

Costs and the manner of financing the proceedings

The general rule is that the losing party bears the costs. In case the group loses, all costs (including professional legal representation, which is compulsory) are borne by the group representative. In case of the opt-in model, group members may participate in the costs of the proceedings if the appropriate clauses were included in the declaration on joining the group.

The so-called contingency fee is inadmissible in Norway.

Practice and significance of the institution. Development trends

The majority of group proceedings to have been commenced in Norway after 2009 have been prosecuted in the opt-in model. The first proceedings in the opt-out model were commenced against one of the Norwegian banks.

After more than 10 years of functioning of the class action, the Norwegian Minister of Justice announced the implementation of reforms and public consultations to be held in this area.