Collective or Class Actions and Claims Aggregation in Spain

Spanish legal framework on collective actions

There are various procedural mechanisms in Spain that could be used to initiate a consumer collective action:

  • Article 11 of the Code of Civil Procedure (CCP);[2]
  • the Consumer Protection Act;[3] and
  • the Act on General Terms and Contractual Conditions.[4]

Several rules acknowledge the standing of industry associations, Chambers of Commerce and professional associations to bring collective actions. It is important to keep in mind that these entities only have standing in relation to their members.[5] Moreover, since the enactment of the Judicial Power Organisation Act in 1985, there has been a distinction between individual and collective interests, while granting standing for the defence of collective interests to those associations and groups affected or legally qualified to defend and promote collective interests.[6] As in every Member State, collective actions are also shaped in Spain by European consumer protection legislation.[7]

The possibility of making use of consumer collective actions under Article 11 of the Code of Civil Procedure was introduced in 2000, and there is still some level of uncertainty surrounding the interpretation of that Article and its application by courts and practitioners. Under this provision, only consumers can use the class action regime, and no formal class certification procedure is foreseen. It is also important to underline that the Code of Civil Procedure does not foresee or provide any specific or comprehensive proceeding when representing those consumer collective interests. Rather, dispersed and isolated rules related to different aspects of those consumer collective actions, as it will be explained below.

Types of collective actions, based on their interest

According to Article 11 of the Code of Civil Procedure, a collective action may be brought when several consumers or end users have suffered a ‘harmful event’. Article 11 foresees two types of class actions:

  • ‘collective interest actions’: actions where all members of the harmed group are previously determined or identified, can be determined or may be easily determined;[8] and
  • ‘diffuse interest actions’: actions where the members of the harmed group are under­determined or difficult to determine.[9]

Despite the apparently simple distinction provided by the CCP, in practice, how to categorise a class action is not always clear for courts and practitioners.

Collective actions regulated in the CCP are, in principle, bound to defend and represent consumers’ interests and rights. These actions normally seek collective redress against illegal conducts in areas affecting consumer protection. The Supreme Court clarified in a judgment of 21 November 2018,[10] that regarding financial services, a consumer association could not bring a collective action to court if that collective action were representing the interests of non-­professional investors whose financial products would not be considered as consumer goods.

Active legitimation

In the case of collective interest actions, the Code of Civil Procedure and the Consumer Protection Act foresee the active legitimation for the following groups:

  • ad hoc groups of affected consumers (known as ‘platforms’ in Spain). To be able to bring a collective action, consumer platforms must prove that they constitute the majority of victims affected by the alleged harmful event;[11]
  • national (or regional) consumer institutes;[12]
  • consumer and user associations;[13] and
  • Attorney General.[14]

In the case of diffuse interest actions, the CCP confers active legitimation exclusively to the Attorney General[15] and ‘representative’ consumer associations.[16]

These procedural mechanisms have only been used to date by consumer groups or associations. Finally, it is of note that individuals can join collective action proceedings as a party with their own legal representation and have the right to the resolution of their own particular claim.

Types of collective actions

The Act on General Terms and Contractual Conditions and the Consumer Protection Act regulate three types of class actions:[17]

  • Cease-and-desist actions: these seek a judgment declaring that certain contractual general terms and conditions are null, and should, therefore, not have been used. They also seek to avoid a future use of those terms and conditions. Claimants may also join cease-and-desist actions claims for nullity, breach of contract restitution or damages arising from abusive clauses or practices.[18]
  • Declaratory actions: this type of actions seek a judgment declaring that a given contractual term is a general condition, and should be registered in the Spanish General Terms Registry.
  • Retraction actions: this type of actions seek a judgment ordering a defendant not to recommend the use of unlawful terms and conditions in the future.

Notice Requirements and the Right of Consumers to Participate in the Proceedings

Notice requirements vary depending on the type of action.

In the above-mentioned collective interest actions, and before initiating one of those collective actions, the CCP requires claimants to inform each potentially affected consumer by the alleged harmful event about their intention to bring the action.[19] If necessary, and to be able to specifically determine the consumers potentially affected, claimants may seek pre-action discovery from defendants.[20]

In case of diffuse interest actions, this type of actions do not require claimants to inform each consumer potentially affected by the alleged harmful event of their intention to file it. However, after the action has been filed, the court clerk will suspend the proceedings for up to two months, in order to inform potentially affected consumers (e.g., publication in a newspaper).[21] Claimants are initially responsible for publication costs, although they may be considered ‘costs of the proceedings’ that may be shifted to the defendant if the class action succeeds.[22]

After receiving notice, a consumer may decide to become involved in the proceedings or individually defend its interests through new individual proceedings. This is without pre­judice to the possibility that these consumers may rely on the collective action judgment, even if they were not involved in the proceedings, to seek direct enforcement of their rights if the class action is successful.

Under the CCP, there is no specific procedure to settle collective actions. In absence of a specific procedure, the general rule for settling individual claims would in principle apply. Under this procedure, parties must file the settlement agreement with the court so that it can be properly certified. Agreements are certified unless they are contrary to the law or they affect the rights of third parties. The collective action settlement would have the same effect as a collective action judgment, and hence, individuals who can qualify as beneficiaries of the settlement may file an application for execution before the competent court to seek their compensation in accordance with the terms of the settlement agreement.

Competent courts

The competent court in collective actions that will have competence over the matter will depend on the nature of the action. If the action is based on general contract law, first instance civil courts will be competent.

If the action arises in the context of commercial matters (e.g., a claim seeking the declaration of an unfair situation from a competition perspective or damages arising from that unfair behaviour), the Commercial Courts will be competent.

If the action is brought against the public administration, administrative courts will be competent. Even criminal courts could have authority to decide on a collective action, based on the legal grounds brought by the claimants, as in the Colza Oil case.

In this case, the second chamber of the Supreme Court (the criminal chamber) awarded in a judgment of 26 September 1997,[23] more than €3 billion to consumers listed as affected by oil poisoning, even if they were not directly represented in the proceedings by the Spanish consumer organization OCU. This judgment resulted from criminal proceeding related to the above-­mentioned Colza Oil poisoning, which caused serious personal injuries and death to a large number of people. The consumer organisation OCU represented the interests of more than 20,000 people seeking subsidiary civil liability and compensation for the damage caused.

Judgments in collective actions proceedings

Judgments issued in proceedings brought by consumer associations have to determine individually the consumers who will be considered as benefiting from the judgment if a monetary sanction has been sought.[24] Where it is not possible to determine these individual consumers, the judgment will establish the details, characteristics and requirements that consumers must meet to be considered beneficiaries of the class action judgment. Judgments also have to determine whether the illicit behaviour has procedural effects beyond those who had been a party to the proceedings.[25] If the judge considers it appropriate, the judgment may also contain an order requiring the defendant to publish the judgment in a nationwide newspaper at its own expense.[26]

The most common grounds for bringing collective redress actions in Spain have taken place in the field of consumer and user rights (e.g., product liability, environmental law, unfair financial terms, wrongful billing, travel contracts).

For example and regarding product liability, the above-mentioned Consumer Protection Act (Royal Decree Law 1/2007 of November 16) consolidated Spanish rules on liability due to defective products. Thus, if those products were sold to consumers or users, a collective action under the CCP as explained could be used to receive the relevant compensation. Environmental issues could fall in Spain under the mentioned definition of ‘collective’ or ‘diffuse’ interests of consumers and users, which means that also a collective action could be made use of to seek relief under the LEC.

Following the Volkswagen emissions issue in 2017 (known as the Dieselgate case), the consumer organization OCU filed a collective action based on the Spanish Unfair Competition Act 3/1991 (Articles 4 and 5) before the commercial courts of Madrid against Volkswagen-Audi in Spain, representing over 7,500 consumers and amounting to more than €22 million. In April 2018, the commercial court number 1 of Madrid admitted this collective action. The hearing was set to take place on 17 February 2020.[27]

As such, there is neither a minimum nor a maximum number of claimants required to file a collective action in Spain. If the action is filed by a group of consumers or users, that group will have to prove that it represents the majority of consumers or users affected by a specific conduct.

Class enforcement and damages distribution

If defendants do not comply with collective actions judgments, they may be subject to enforcement proceedings and fines.[28] Enforcement proceedings may be individually initiated by consumers[29] or by the Attorney General or the consumer association that initiated the class action.

If the class action judgment has not determined each individual consumer that should benefit from it, any consumer allegedly affected by the harmful event could seek a declaration from the court to be considered a ‘beneficiary’.[30] In that case, the party who was found liable by the judgment will also be heard by the court.[31] However, this declaration cannot be sought until the collective action judgment is final and binding.[32] A court will recognise a consumer as a beneficiary when, on reviewing the evidence provided by the consumer, the court verifies that the consumer is within the scope of the class definition of its judgment.[33]

The CCP does not contain rules regulating the creation of a common fund or how any damages awarded should be distributed. It is up to the defendants to decide how to comply with the judgments deriving from collective actions.

Precedents in competition law

Only one private enforcement collective action has to date and to our knowledge been brought in Spain, by the consumer association AUSBANC against Telefónica due to an anticompetitive margin squeeze conduct. This case was dismissed on procedural grounds (the claimant association lacked sufficient representative status because the association was not registered with the specific Associations Registry).[34] As such, there is no legal precedent regarding the distribution of damages or settlements.

In relation to consumer collective actions brought in other contexts, courts have awarded sample damages to a class of individuals, each of whom is then able to claim damages by filing an application for execution of the sample damages judgment before any competent court.

According to Article 64.3(c) of the Spanish Competition Act 15/2007, the CNMC (Spanish Competition Authority) may reduce the amount of an administrative fine imposed if an infringer has adopted measures to redress the harm caused. There are currently no proposals to change the relevant rules on collective actions in Spain (neither in connection with competition law actions nor in general for other actions). Limitation periods have already been adapted to the changes foreseen by Directive 2014/104/EU (five years, according to Article 74.1 of the Spanish Competition Act).[35]

The European Commission published a non-binding collective redress mechanism Recommendation in 2013, which has not affected the Spanish regulation of collective actions so far.[36]

Claims aggregation

In addition to collective actions, under Article 72 CCP there is a different procedural mechanism that allows claims from different parties to be grouped together, namely what is known as joinder of claims. Even though this is not a collective action as such, if used, joinder of claims could potentially allow several consumer or corporate claimants to file their claims in a single lawsuit.

The only requirement under Article 72 CCP for different parties to join claims is that the individual claims have a sufficient connection. Different claims are understood to have a sufficient connection when they are based on the same facts.[37] The interpretation of these provisions varies from court to court, and some ‘bad’ experience in the field of consumer banking litigation has led some courts to be reluctant to permit a broad use of joinder. However, in the context of the trucks litigation, a number of courts have allowed some limited joinder of actions and there have been calls from some forums[38] for a greater ordering of claims in order to avoid inefficient repetition of very similar claims, excessive fragmentation and risks of contradictory judgments.

In the context of the discussions held within the Spanish judiciary on the need to adopt certain organisational and procedural measures as a result of the covid-19 pandemic, a proposal for modification of the rules included in the Code of Civil Procedure on claims aggregation (in particular, Article 76) was made for private enforcement cases. The purpose was to allow the ex officio aggregation of private enforcement claims in which the law firm representing the claimants, the expert report and the identity of the defendant were the same. However, this proposal was dropped.

In return, and owing to the high number of cases currently pending at Spanish commercial courts throughout the country concerning the Trucks cartel litigation, in which alleged damages derived from the infringement sanctioned in the European Commission’s decision of 19 July 2016 in the case AT 39824-Trucks are being claimed, a group of commercial court judges issued a public document in which they proposed certain alternatives to aggregate or to process in a coordinated manner different procedures in which the law firm representing the claimants and the identity of the defendants (truck manufacturers) coincide. These include the possibility to aggregate proceedings in a traditional fashion (i.e., according to the rules on consolidation included in the Code of Civil Procedure), the possibility to aggregate proceedings in a more flexible manner, which would involve changes in the applicable rules (for instance, the terms) upon the parties’ agreement, and the coordinated processing of proceedings allowing to hold one sole preliminary hearing or trial per group of cases.

Finally, another mechanism for aggregating claims is the use of special purpose vehicles to whom claims can be assigned. This is yet to be explored to any significant degree in Spain to date.


Notes

1 María Pérez Carrillo is a partner and Patricia Pérez Fernández is a principal associate at Cuatrecasas.

2 Code of Civil Procedure, adopted by Act 1/2000, of January 7, 2000.

3 Royal Decree Law 1/2007, of November 16.

4 Act 7/1998, of April 13.

5 See Article 33.2 of Act 3/1991, of January 10, on unfair competition and Article 9.4 of Act 3/2004, of December 29, implementing measures against commercial late payment.

6 See Article 7.3 of Act 6/1985, of July 1.

8 Article 11.2 CCP.

9 Article 11.3 CCP.

10 Judgment of the Supreme Court of 21 November 2018, number 656/2018.

11 Article 6.7 CCP.

12 Article 54.1.a) Consumer Protection Act.

13 Article 11.2 CCP. These entities must be legally constituted according to the Organic Act 1/2002, and must meet the requirements laid down in Title II of the Consumer Protection Act, which include: being a non-profit organisation; being officially registered; and having a purpose that is for the defence of consumers’ and users’ interests. If these associations do not comply with these requirements, the action could be dismissed on the grounds of a lack of capacity to sue.

14 Article 11.5 CCP.

15 Article 11.5 CCP.

16 Article 11.3 CCP.

17 Article 12, Act on General Terms and Contractual Conditions and 53 et seq. Consumer Protection Act. Claimants could also rely on Article 33 of Act 3/1991 of 10 January on Unfair Competition and on Article 9.4 of Act 3/2004 of 29 December, establishing measures against commercial late payment.

18 Article 12.2 Act on General Terms and Contractual Conditions and 53 Consumer Protection Act.

19 Article 15.2 CCP.

20 Article 256.1.6º CCP. The Spanish Constitutional Court Judgment No. 96/2012, of May 7, 2012 interpreted this provision very strictly, stating that these disclosure requests would only be admissible to the extent they are ‘vital’ to initiate a specific collective proceeding (the context of this judgment was a banking case, where the disclosure request was aimed to have access to a bank providing a representative consumer association a list of all its clients in Spain that had contracted interest rate swaps.

21 Article 15.3 CCP

22 Article 241 CCP.

23 Judgment of the Supreme Court of 26 September 1997, number 895/1997.

24 Article 221.1.1º CCP.

25 Article 221.1.2º CCP.

26 Article 221.2 CCP.

28 Article 711.2 CCP.

29 The consumers who can initiate enforcement proceedings are those who have taken part in the proceedings and those that the court has considered a ‘beneficiary’, as explained in this section.

30 Article 519 CCP.

31 Article 519 CCP.

32 See, among others, Judgment of the Appeals Court of Madrid Number 238/2006, of December 18 (ECLI: ES:APM:2006:14196A).

33 Article 519 CCP.

34 See Judgment of the Appeals Court of Madrid Number 139/2013, of 30 September 2013 (ECLI: ES:APM:2013:2461A). Spanish procedural law does not require any specific certification mechanism of the consumer association or organisation. When admitting the collective action, the court also decides at the same time on the standing of the claimants, as well as on the nature of the claim (whether the claim protects collective or diffuse interests). According to Article 6.1.8 of the LEC, if the claimant is a group of affected consumers or users, the court must examine whether the group represents the majority of the consumers affected by the specific conduct. As mentioned, according to Article 11.3 of the LEC, if the lawsuit is for the protection of diffuse interests, the court must verify that the claimant is a qualified consumer organisation, which is considered to be ‘representative’ (e.g., the OCU in Spain).

35 The CCP does not foresee any specific limitation periods for collective actions. Therefore, different limitation periods may apply depending on the nature of the collective action issued and the relevant legal grounds in that specific case.

36 See the Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law, OJ L 201, 26.7.2013, pp. 60–65.

37 In the field of consumer banking litigation it is worth citing a judgment of the Supreme Court where not all the facts in the case were identical (judgment of 21 October 2015, appeal number 2671/2012: ‘Although there are indeed some differences between the circumstances in the aggregated claims (amount of the investment, issuer of the purchased product, differences in the way of contracting, etc.), the alleged facts within the exercised claims show a coincidence which, together with the uniformity of the requests made by the plaintiffs and the fact that they are addressed to the same banking entity (…), leads to the conclusion that, although we are in a borderline case, there is a sufficient connection within the claim which justifies the subjective claims aggregation’.

38 See Perales, C.: ‘Spanish truck litigation case numbers risk collapsing commercial court system’, PaRR 18 August 2019.

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