Types of class action mechanisms. General characteristics

The debate on the implementation of the collective redress mechanisms within the Swedish law commenced as early as in the 1970s. In 2002, the debate resulted in the passing of the act entitled The Law on Group Proceedings (Lag om grupprättegång) which entered into force on 1 January 2003. The very act is of an exclusively procedural nature, it introduces no modifications in the scope of substantive law issues.

Depending on the entity bringing the action, three types of collective actions may be distinguished in Swedish law. A class action can be initiated by:

  1. a natural or legal person whose claim is also a subject of the proceedings,
  2. a non-profit consumer or employee protection organisation and
  3. a public body qualified to represent members of the group in connection with the subject of the dispute.

Any natural or legal person as well as a non-profit organization initiating a class action has to be represented by a professional legal counsel. A judge give permission, based on particular reasons, to initiate a class action without a legal counsel only in exceptional circumstances.

In Swedish law, the collective action mechanism is based on an opt-in model. Group members are exclusively identified persons who, upon being notified by the court, declare their will of participation in such proceedings in writing, within the prescribed period. Opting in is possible at a later stage, if it does not result in delaying the examination of the case or other substantial inconvenience for the defendant. Only the group representative has the capacity to bring forth an action.

Although the group members do not have the status of parties to the proceedings, they are bound by the court’s judgements. Nonetheless, a group member is entitled to contest a final judgment against the group either on behalf of the group or individually.

The competence to conduct collective actions lies with specially appointed courts.

Specific provisions on collective actions are also to be found in the Swedish Environmental Code (Miljöbalken).

Conditions of admissibility and the procedure

The scope of cases that may be examined in the form of a class action is not limited in terms of their subject-matter. A group action may pertain to any and all issues that may be heard in an individual civil law trial and, under certain conditions also to environmental law-related cases.

For the action not to be rejected, the following requirements must be complied with:

  1. claims are based on common or similar circumstances (an equivalent of the American commonality premise),
  2. grounds of claims do not materially differ from one another,
  3. majority of the claims may not be pursued equally effectively in individual actions brought by individual members (an equivalent of the American superiority premise),
  4. the group is sufficiently defined, with special consideration to its number and range (although the act does not specify the minimum number of group members),
  5. the claimant is a person who, in connection with their own interest in the case, financial capacity, and other circumstances, will duly represent the remaining members of the group.

If the above-mentioned conditions are met, the court issues no special certification decision. The case is simply heard in the class action mode.

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

The frames of a class action allow for all the forms of legal protection available in regular civil proceedings (damages, injunctive relief, ascertainment). All types of damages may also be sought, with the exception of punitive damages (admissible only in cases related to the infringement of intellectual property laws).

According to the Swedish law, the court may not award a lump-sum compensation to be divided among individual members of the group. The judgement must award precise amounts to specific group members.

In the case of class actions if the group representative concludes a settlement with the defendant, it is binding for all the group members only upon being approved by the court. In order to approve the settlement, the court examines whether it does not discriminate against any members of the group or is not in any way improper.

Costs and manner of financing the proceedings

The State bears the costs of notifying potential group members of ongoing proceedings.

Furthermore, in keeping with the general principles, the losing party has to reimburse the winning party for the costs of legal representation and the trial. However, due to the fact that only the group representative is a party to the proceedings, it is only the group representative who is held accountable for payment of the costs generated in connection with the proceedings. Yet, if the claimant party wins and the defendant is unable to reimburse the representative for the incurred costs, the latter may seek reimbursement of such costs from other group members.

The claimant and attorney may conclude an agreement in which they make the fee dependent on the degree in which the resolution of the dispute benefits the claimant (risk agreement), however, rendering the remuneration dependent on the result alone is inadmissible. The agreement with the attorney has to comply with the conditions set forth in the statutory law and has to be approved by court.

In the case of collective actions of a public nature (initiated by a public entity), support of the State may be obtained. In the remaining cases, such support may only be sought under strictly specified circumstances.

Practice and significance of the institution. Development trends

In 2007, an official assessment of the functioning of the statutory class action mechanism in Sweden was conducted by the Swedish Ministry of Justice. Following the verification, several amendments to the law were suggested, although none of them have been introduced until now.

Since the subject regulations entered into force, a relatively low number of group cases has been heard by the courts. Most of those were initiated by private entities as group representatives.

Class actions are beginning to gain popularity. A group action initiated in 2016 by three former patients against a hospital attracted a lot of media publicity. The pursued claims concerned surgical procedures performed in infection risk conditions which endangered their health. The patients were exposed, among others, to the HIV virus, as one of the hospital’s anaesthesiologists, addicted to fentanyl (an anaesthetic applied in surgery), was a carrier of the virus.

At present, a substitution (at least partial) of the currently functioning opt-in model with opt-out class action model is being considered in Sweden. The goal is to increase the effectiveness and range of applicability of the class action model.