Agnieszka Trzaska-ŚmieszekUnder the Act on Pursuing Claims in Group Proceedings, we can now distinguish between traditional class actions and representative class actions. The legislator has decided to modify the conditions that a case must meet to be admissible in a group procedure, writes Agnieszka Trzaska-Śmieszek, attorney-at-law and partner at KKG Legal Kubas, Kos, Gałkowski i Wspólnicy sp. k.
For a little over six months now, an amendment to the Act on Pursuing Claims in Group Proceedings and certain other acts (hereinafter: “the amendment”) has been in force. It introduces, alongside the “traditional” class action (which has been part of the Polish legal system for 15 years), a new type of group procedure initiated by an authorized entity, which for clarity can be referred to as a representative class action.
An authorized entity acting in the interest of consumers may seek a declaration that a trader has engaged in practices infringing the collective interests of consumers, as well as pursue claims related to such practices, either in separate actions or in a single lawsuit.
More on this topic: Authorized Entity as a New Participant in Class Action Proceedings.
Group proceedings in these matters—that is, for declarations of practices infringing the collective interests of consumers and claims related to such practices—constitute the “Polish version” of representative actions as defined in Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC (hereinafter: “Directive 2020/1828”). To be precise, it should be noted that consumer protection cases have, from the outset (i.e., since 2010), been a category of cases eligible for “traditional” class actions. The latest amendment simply extended the scope of consumer protection cases covered by the Group Proceedings Act to include actions for declarations of practices infringing collective consumer interests, as well as actions for claims arising from such practices.
Therefore, under the Act of 17 December 2009 on Pursuing Claims in Group Proceedings (hereinafter: “UDRPG”), we can now distinguish between traditional class actions and representative class actions, which are governed by partly different rules. This article focuses on the differences between the two in terms of the admissibility requirements for hearing a case in a group procedure.
Admissibility requirements are the conditions that must be met for a case (or claims covered by a lawsuit) to be heard in a group procedure. In the context of traditional class actions, four basic and one additional requirement for monetary claims are distinguished:
Directive 2020/1828 emphasizes in recitals 9 and 12 the need to introduce effective mechanisms. Accordingly, the Polish legislator decided, among other things, to modify the admissibility requirements for the new “representative” class actions.
Regarding the first requirement, it should be noted that the new type of class action for consumer protection concerns practices infringing the collective interests of consumers, understood as actions or omissions by a trader that are contrary to EU law provisions listed in Annex I to Directive 2020/1828—or national laws implementing or applying those provisions—and that harm or may harm collective consumer interests.
Annex I to Directive 2020/1828 contains a list of 66 legal acts covering sectors where businesses sell goods or provide services to consumers, especially on a mass scale (e.g., carriers, remote service providers, food producers, cosmetics and pharmaceutical companies, financial institutions, banks, insurers, travel agencies, etc.). Thus, the scope of affected industries is very broad.
The second requirement is homogeneity. In the existing practice of the UDRPG, homogeneity is understood in the procedural sense: it refers to the form of legal protection sought—e.g., a demand for a judgment awarding performance, a declaratory judgment, or one shaping a legal relationship or right.
In actions for declarations of practices infringing collective consumer interests, this requirement will usually be fulfilled, since the authorized entity is essentially bringing a single collective claim: to declare that the trader’s practice violates the collective interests of consumers. For example, the authorized entity files a claim seeking a declaration by the court that trader X, during period Y, used a prohibited contractual clause with wording Z.
This homogeneity requirement also applies in cases seeking remedial measures, where the class action aims at specific performance for identified consumers. Such claims may include:
To satisfy the homogeneity requirement, each group member must raise the same type of claim(s).
The common basis of claims is arguably the most important requirement, and significantly, the amendment introduced the most substantial changes in this area. Under the traditional model, claims must be based on the identical factual basis. Earlier interpretations concluded that this meant a core set of facts decisive for the existence of a claim (excluding individual facts such as the amount due). The new regulations allow claims in consumer protection cases (for declarations and related claims) to be based on the same legal basis. This is a major shift, as it enables group actions even when factual circumstances differ, as long as the same legal provision was violated by the trader.
In the explanatory memorandum to the draft act, as an example of a case that, under the new rules, could be examined in group proceedings, the offering by an entrepreneur of financial instruments that are inadequate and inappropriate for the characteristics, objectives, and needs of the client was indicated (thus in violation of the provisions of the Act of 29 July 2005 on trading in financial instruments, the provisions implementing the so-called MiFID II directive). As emphasized in the explanatory memorandum: “such an act is committed in varied factual circumstances, and under the provisions regarding ‘classic’ group proceedings, a claim against such an entrepreneur, e.g., for a price reduction or compensation for damage caused, could be dismissed due to the failure to meet the condition of the same or similar factual basis.”
Since in classic group proceedings – the struggle for the so-called certification in the first phase usually boils down to assessing the existence in the case of the condition of a common factual basis of claims and constitutes a significant challenge for the parties and attorneys as well as the court (in terms of verification and analysis of often very extensive evidentiary material), and thus it is also time-consuming – in “representative” group claims it was decided to liberalize this condition precisely to ensure the effectiveness of the new mechanism.
The next of the prerequisites for the admissibility of group proceedings is the size of the group. In “classic” group proceedings, at least 10 claims from 10 entities must be submitted. This prerequisite will remain applicable only in the second type of representative group claim, i.e., for remedial claims. In the case of claims concerning the determination of the use of practices infringing the collective interests of consumers, the requirement to define the group and to submit declarations of joining the group by at least 10 entities does not apply; a claim with such a shaped demand is brought in the name of the whole collective (in the interest and on behalf of an unspecified number of consumers).
The last of the prerequisites for the admissibility of group proceedings concerns those cases in which monetary claims (for compensation) are pursued. Unification after the 2017 amendments meant bringing the claims to the same amount within the group or subgroup; that is, colloquially, cutting downwards. This requirement was excluded, and even more broadly, in all consumer protection cases.
The liberalization of the conditions for the admissibility of initiating group proceedings by an authorized entity should significantly contribute to the easier obtaining of certification within the first phase of the new type of group proceedings.
Originally published: Prawo.pl on 15.03.2025
