Types of class action mechanisms. General characteristics

The class action mechanism has been in use in Norway since 1st January 2018. These proceedings are regulated by Chapter 35 of the 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 – although it is the opt-in model that is seen as the rule. 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 opt-out model is excluded in cases in which the group is the defendant. According to the information reported as of April 2023, no group proceedings have been initiated in Norway in which the group is the defendant.

No special courts are provided for the hearing of group proceedings; such proceedings fall within the jurisdiction of the common courts.

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. However, the final decision on the model of proceedings is made by the court. In addition, in the case of the opt-in model, the court sets a deadline within which one must register as a group member.

The Norwegian solution is an example of a horizontal attitude – there are no objective restrictions regarding cases which may be pursued in group proceedings. However, to pursue the case in group proceedings, the following requirements must be met:

  1. several entities must have claims based on the same factual or legal ground (in the case of differences, the court may divide the group into subgroups),
  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 has not precisely defined the required number of group members. However, in cases where the group includes a small amount of members, the court may assess that the condition mentioned in point c. above has not been fulfilled.

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.

It should be mentioned that in group proceedings in Norway, making  a settlement is admissible, but when the case is heard under the opt-out model, the settlement requires court approval.

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. In the case of the opt-out model, group members bear no liability for the costs of the proceedings.

It should be added that the ethical rules for professional attorneys in Norway forbid success fees.

The issue of financing class actions by a third-party is not regulated by law.

Practice and significance of the institution. Development trends

The majority of group proceedings to have been commenced in Norway after 2008 have been prosecuted in the opt-in model, but of course there are also some examples of opt-out model proceedings.

In 2013, a case commenced against oil and offshore companies that concerned pay for overnight work. The case was proceeded in the opt-out model and involved approximately 7,000 group members.

On the other hand, an example of a case under the opt-in model is a case commenced against the City of Oslo in 2016, which concerned property tax. After hearing the case on the merits, the Court ordered a partial refund of the tax. Interestingly, despite the fact that in these proceedings the group consisted of approximately 2,000 residents, as a consequence of the class action, the city decided to refund the tax also to those Oslo residents who did not participate in the group proceedings.

One of the most well-known class action disputes in Norway is the case against Norwegian bank DNB, which was accused of charging excessive fees for managing the funds of the bank’s customers. On 27th February 2020, the Norwegian Supreme Court ruled that each group member is entitled to a reduction in the fee, which averaged 1,590 kroner – a total refund of approx. 350 million kroner to the group members.

In 2018, a class action against the Norwegian State was brought by a group of 160 Hungarian psychology students to formally validate their education in Norway and obtain a psychology degree. The case successfully passed the certification stage, but ultimately the court of appeals ruled in favor of the State.

In July 2021, a class action lawsuit for damages was filed against two major home alarm suppliers –  Sector Alarm and Verisure. The case was heard on an opt-out model (in favor of 400,000 customers) and followed the earlier punishment of these two companies by the Norwegian Competition Authority for anti-competitive actions in the form of market sharing between 2011 and 2017. An interesting issue in the case was the fact that the proceedings were financed by a third party, and it was issues related to the financing of the proceedings that stood in the way of the case being heard as a class action, as a result of which the courts of first and second instance refused to certify. The decision to deny certification was appealed to the Norwegian Supreme Court, which ruled that the agreement entered into between the association (which was a group representative) and the entity funding the proceedings could not be approved and therefore the class action could not proceed due to the lack of consent of the group representative to act in the proceedings (the association agreed to act as a representative under the condition of approving the agreement to fund the proceedings by a third party).

Implementation of the Directive of the European Parliament and of the Council (EU) 2020/1828

Although Norway is not a member of the European Union, it belongs to the European Economic Area, and therefore cooperates with the European Union on many levels. According to the prevailing view, it is highly likely that Norway will implement the provisions of the Directive 2020/1828 on representative actions into its legal order, however, no official decision has been made thus far.