Types of class action mechanisms. General characteristics

The institution of class action was introduced into Spanish law in 2001 with the entry into force of the Civil Procedure Act (Ley de Enjuiciamiento Civil) and, similarly as in Italy, it is meant to protect consumer interests. However, it is worth noting that the Spanish law adopts a broad meaning of the notion of a ‘consumer’ – it is each person (also a legal person) who in a given case did not act as an entrepreneur or professional.

Spanish law distinguishes two types of actions aimed at protecting the interests of multiple consumers:

  1. actions to protect collective interest (collective actions) – initiated when a party injured as a result of an event is known or easily identifiable (un grupo de consumidores o usuarios cuyos componentes estén perfectamente determinados o sean facilmente determinables – Article 11.2 of the LEC); the collective action may be brought by consumer organisation, other authorised entities (e.g. a public prosecutor), as well as by groups of consumers;
  2. actions for the protection of widespread or diffused interests of consumers (diffused interest actions, intereses difusos) – initiated when consumers injured by an event cannot be identified or identifying them is extremely difficult (una pluralidad de consumidores o usuarios indeterminada o de difícil determinación – Article 11.3 of the LEC); diffused interest actions may be brought only by designated consumer organisations (precisely: one organisation – cf. hereafter) and other authorised entities (e.g. public prosecutor).

The Spanish law requires an initiation of the action to be announced in the media. It pertains to both the collective action and diffused interest action. In the first case, the proceedings are suspended for a period set by the court (no longer than two months) during which injured parties may express their intent to participate in the proceedings. In the second case, the proceedings are not suspended and injured parties may opt in on the claimant’s side at any time.

Notwithstanding the abovementioned regulations if persons injured as a result of the act are known or they can be easily identified, the claimant is required to notify each of them – before bringing an action – of the intent to file a claim.

It is difficult to conclusively categorize the class action mechanism functioning in Spain as opt-in model or opt-out model.

The collective action refers to the opt-in model. The ruling rendered in this proceeding is not binding for consumers injured by a given event who did not opt in. They still enjoy a possibility of individually pursuing claims against the entrepreneur.

On the other hand, diffused interest action refers more to the opt-out model. The judgement rendered in this proceedings is absolutely binding by virtue of law for all persons affected by a given event. If the claim is dismissed, persons injured as a result of the act do not have an opportunity to pursue individual actions, even when they did not opt in. In order to be actively engaged in the matter consumers may clearly opt in, but it is impossible for them to except themselves no matter whether they have opted in or not.

 Conditions of admissibility and the procedure

Collective redress is possible only in cases of damages caused by infringement on consumer rights – including competition and antitrust law. Consumers’ claims must arise from the same event.

A collective action may be brought by consumer organisations (which then act on behalf of injured consumers), other authorised entities (e.g. a public prosecutor), as well as by a group of consumers, provided the group covers the majority of consumers affected by a given event.

Only a sufficiently representative consumer organisation (so far only one entity has been recognized as such) and other authorised entities (e.g. public prosecutor) are adequately qualified to bring forth an action for the protection of consumers’ diffused interests is.

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

A class action may result in obtaining damages of a compensatory nature – the so-called punitive damages are prohibited. Furthermore, the court may impose on entrepreneurs specific injunctions or orders related to the infringement of consumer rights, competition law, or unfair practices. It may also rule that defendant entrepreneur’s actions were an infringement of law and order publication of the judgment in the media.

Costs and manner of financing the proceedings

Essentially, in the case of both aforementioned mechanisms, only the unsuccessful party is obligated to reimburse the successful party for the costs incurred. If the statement of claims is accepted only partially, the court desists from adjudicating on costs and every party bears the expenses connected with their activities in the case.

In practice consumer organisations initiating class actions frequently enjoy the support of the state.

Agreements between an attorney-ad-litem and a claimant rendering the attorney’s fee dependent on the outcome of the trial are admissible only if the minimum remuneration was initially guaranteed.

Practice and significance of the institution. Development trends

In Spain, unlike in other European countries, a class action does not cause much debate. However, a gradual increase in consumer awareness is taking place – and the significance of the above-described mechanisms is also on the rise. The most frequently initiated actions are those brought by consumer organisations against entrepreneurs from the telecommunications and financial sectors as well as actions related to the use of abusive clauses.

The debate concerning amendment of group proceedings came alive in 2007 following implementation of the Directive 2014/104/EU concerning redress for damage caused by infringement of competition law. It was expected to be an occasion for extending the institution of class action to groups of injured entrepreneurs. However, no appropriate changes of regulations have been introduced, yet.

Another expression of a tendency towards changing the regulation in force comes as member of parliament’s draft of the reform of the Civil Procedure Act submitted on 6th April 2018 in Spanish parliament. The draft primarily provides for giving consumer groups the direct right to initiate proceedings protecting both collective and diffused interests. The requirement for consumers initiating the proceedings to prove that the group covers the majority of consumers affected by a given event is going to be abolished. Currently, the aforementioned requirement has this effect that in practice consumers do not enjoy the possibility to directly initiate the proceedings and are forced to count on realizing their privileges through the agency of community organisations or public entities (e.g. public prosecutor).