Spain: Class actions – litigation, policy and latest developments

Spanish legal framework on class actions

General regime

Spanish law does not establish a specific procedure for collective actions. Instead, the Code of Civil Procedure (CCP)^[2] includes several specific rules that regulate some of the main procedural matters^[3] – for example, standing, competence, publicity and claim preclusion.

Dispersed and isolated rules related to different aspects of consumer collective actions coexist, generating legal loopholes and challenges in the implementation of those provisions. Aside from the above rules in the CCP, the main legislation on consumer collective actions can be found in:

• the General Consumer and User Protection Act;^[4]
• the General Contractual Conditions Act;^[5] and
• the Unfair Competition Act.^[6]

As in any member state, collective actions are shaped in Spain by European consumer protection law.^[7] In fact, on 20 December 2020, Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 (Directive 2020/1828) – on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC – entered into force. Spain has not yet transposed the directive (the deadline to do so is 25 December 2022). When it is transposed, the directive’s content may affect the current regulation on collective actions.

The General Contractual Conditions Act and the General Consumer and User Protection Act regulate three types of class actions:^[8]

• Cease and desist actions: these actions seek a judgment declaring that certain general terms and conditions of contracts are null and should not have been used. They also seek to avoid those terms and conditions being used in the future. Claimants may also join cease and desist actions with claims for restitution or damages arising from the use of general contractual terms that have been declared null.^[9] Concerning these actions, Directive 2020/1828 clarifies that cease and desist actions can also be filed with reference to behaviours that had already ceased by the time the action was filed, where there is risk of them arising again.^[10] In practice, this is the most common action brought by consumer associations.
• Retraction actions: these actions seek a judgment ordering a defendant to retract from any recommendation made on the use of unlawful terms and conditions and to forbid it from making any further recommendations in the future.
• Declaratory actions: these actions seek a judgment declaring that a given contractual term is a general condition and, when necessary, should be registered in the Spanish Register of General Contractual Conditions according to the applicable legislation.

In parallel, Directive 2020/1828 defines – in articles 8 and 9 – the types of measures that can be adopted through a collective claim, dividing them into two groups: injunctive measures and redress measures. As indicated in Recital 43 of Directive 2020/1828, punitive damages cannot be imposed on the defendant under Spanish law.

Legal regime on anticompetitive class actions

There is no specific legal regime on anticompetitive class actions in Spain, but the general regime applies. As this regime concerns consumers only, anticompetitive class actions are not available for non-consumer claimants.

However, claims from different parties can be grouped together through a joinder of claims under article 72 of the CCP, according to which the individual claims must be sufficiently connected. This is considered to be the case when they are based on the same facts.However, the interpretation of this requirement varies from court to court, and ‘bad’ experience in the field of consumer banking litigation has led some courts to become reluctant to permit a broad use of the joinder of claims. In the context of the litigation arising from the European Commission’s (EC) decision in case AT.39824 Trucks (where claimants are companies or self-employed individuals), several courts have allowed some limited joinder of actions and there have been calls from several forums for a greater ordering of claims to avoid the inefficient repetition of similar claims, excessive fragmentation and risks of contradictory judgments.

Claims beginning during an investigation by a competition authority

Competition damages claims can proceed while related public enforcement proceedings are pending. However, under article 434 of the CCP, the court may decide to stay the term to issue judgment if the EC, the Spanish National Markets and Competition Authority (CNMC) or other regional competition authorities have an ongoing investigation into the same alleged violation and knowledge of the administrative decision is necessary.

Anticompetitive behaviour suitable for class actions

Up until now, there have not been many cases of anticompetitive class actions in Spain, but both abuse of dominance and horizontal conduct cases could be equally suitable, as they concern consumers.

The binding nature of findings and decisions in follow-on class action antitrust cases

Prior to the new regime introduced by Directive 2014/104^[11] (Damages Directive), decisions of the national and regional competition authorities were not legally binding in Spanish civil proceedings. However, findings of facts in administrative proceedings were granted effect by civil courts, which could only deviate from these findings if they could reason their decision adequately. Decisions issued by the EC had legal binding effect under article 16 of Council Regulation (EC) No. 1/2003.

After the Damages Directive was transposed into Spanish law, article 75(1) of the Defense of Competition Act established that the findings of a competition law infringement in a final decision of a national competition authority or a Spanish court is binding in civil proceedings, while final decisions of competition authorities and courts of other EU member states create a rebuttable presumption.

In practice, administrative decisions have generally proven to have a great deal of weight in Spanish courts when deciding on damages claims, even before the Damages Directive was transposed into Spanish law.

Types of group interests protected through collective actions

Except for the individual standing of those aggrieved, Spanish law does not provide individual consumers with legal standing to bring claims defending group interests – namely, those that go beyond their private sphere. In fact, Directive 2020/1828^[12] deliberately excludes individual consumers when addressing the entities qualified to file collective actions.

Article 11 of the CCP establishes the main regulation on the legal standing to represent and defend group interests. Under this provision, collective actions regulated in the CCP are, in principle, bound to defend and represent consumers’ interests and rights only.^[13] This article entitles legally constituted associations of consumers and users to represent and defend the rights and interests of their members, as well as the general interests of consumers and users.^[14] It also establishes that the public prosecutor is authorised to take any action to defend the interests of consumers and users.^[15] Entities authorised under European Union law also have legal standing to exercise cease and desist collective actions.^[16]

Sectorial legislation^[17] gives legal standing to other entities such as national or regional consumer institutes, chambers of commerce and professional associations. In the latter’s case, this is only granted to defend their members’ interests.

Article 11 of the CCP also distinguishes between two types of consumers’ collective interests that are defended through collective claims and that, in turn, generate two different types of legal standing:

• Collective interest claims: actions where all members aggrieved by a harmful event are previously determined or may be easily determined.^[18] In the case of collective interest claims, the CCP and the sectorial rules foresee active legal standing 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);^[19]
  • national or regional consumer institutes;
  • consumer and user associations, as well as legally incorporated entities that serve to defend or protect their consumers and users;^[20] and
  • public prosecutors,^[21] as well as entities authorised under European Union law.^[22]
• Diffuse interest claims: actions where the members of the harmed group are underdetermined or difficult to determine.^[23] In the case of diffuse interest claims, the CCP confers active legitimation exclusively to ‘representative’ consumer associations^[24] (apart from the general legitimation of the attorney general and qualified entities under European Union law).

Class certification process

Spanish law does not provide for a certification process to establish a class or group. There is no provision on this matter in Directive 2020/1828 either.

Notice requirements and the right of consumers to participate in proceedings

Although collective actions in Spain do not proceed on an opt-in or opt-out basis, the CCP sets an ‘announcement and intervention’ system to call the affected consumers to appear in the proceedings and to assert their individual rights or interests.

Notice requirements vary depending on the type of action:

• In collective interest actions, under the CCP, claimants must inform each consumer potentially affected by the alleged harmful event in advance about their intention to bring the action.^[25] If necessary, and to be able to determine the consumers potentially affected, claimants may seek pre-action discovery from defendants.^[26] If this requirement is not fulfilled, it may lead to the claim not being admitted^[27] or to the actions being suspended (thus maintaining exclusively the cease and desist action and excluding any others such as redress measures).^[28]
• In diffuse interest actions, claimants do not have to inform each consumer potentially affected by the alleged harmful event of their intention to bring the action. However, after the claimant has brought the action, the court clerk will suspend the proceedings for up to two months to inform potentially affected consumers – for example, by publication in a newspaper.^[29] Claimants are initially responsible for publication costs, although they may be considered ‘costs of the proceedings’, which may be shifted to the defendant if the latter is ordered to bear the legal costs.^[30]

Concerning cease and desist actions, the CCP does not require notice to consumers.^[31] To avoid having to give any kind of notice to consumers, claimants frequently invoke this exception, even when it does not apply – for example, when there are joint actions to cease one. In practice, case law has come to conflicting decisions on when to apply this provision.^[32]

After receiving notice, a consumer may decide to become involved in the proceedings or individually defend its interests through separate proceedings. However, in diffuse interest actions, if consumers have not joined the proceedings following the summoning of the court clerk, they would not be entitled to do so at a later stage. These consumers may rely on the collective action judgment, however, even if they were not involved in the proceedings to seek the direct enforcement of their rights if the class action is successful.^[33] In fact, Directive 2020/1828 expressly compels member states to ensure consumers can benefit from redress measures granted through collective measures without having to file additional individual claims.^[34]

Damage assessment in various types of actions

Damages actions under Spanish law are compensatory in nature. Those who have suffered harm can claim compensation for the damage suffered, which may include: (i) direct damage; (ii) lost profits; and (iii) interest. Punitive damages (overcompensation) are not allowed under Spanish law.

Typically, each party will produce an expert report containing an estimation of the damages, and the court will decide on the basis of its evaluation of those reports and the experts’ defence of them at trial. Judicially appointed experts are not common in antitrust damages cases due to the expertise required and the way the Spanish system is structured – where experts are appointed from a pre-determined list that does not include experts in the antitrust damages field.

In antitrust damages cases, experts tend to use the methods included in the EC’s Practical Guide.^[35]

Settlement of collective claims in Spanish law

Under the CCP, there is no specific procedure on settling collective actions. Moreover, there are no relevant judicial precedents or scholarly publications that properly address this issue, which generates great uncertainty as to the real feasibility of settling collective claims in Spain.

In absence of a specific procedure, in principle, the general rule for settling individual claims would apply. Through this procedure, parties should 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 affect the rights of third parties. The collective action settlement would have the same effect as that of a collective action judgment. Therefore, individuals who can qualify as beneficiaries of the settlement may file an application for enforcement to the competent court to seek their compensation in accordance with the settlement agreement.

Directive 2020/1828 expressly recognises that collective claims can be settled. In fact, it conditions their validity on the court or administrative authority’s authorisation of the settlement. Otherwise, it will continue to hear the action started, as if the parties did not reach a settlement agreement.

Mandatory and voluntary redress schemes

Mandatory redress schemes are not imposed and voluntary redress schemes are not allowed, but the CNMC may reduce the amount of an administrative fine if an infringer has adopted measures to redress the harm caused (article 64(3)(c) of the Defense of Competition Act).

Possibility of further appeal

All parties are entitled to appeal a judgment or final order that is contrary to their interests. Although no permission is required, the deadlines for filing the appeal must be met. An appeal will be heard at the court of appeal of the jurisdictional region where the court that heard the case at first instance is based. The corresponding court of appeal is entitled to review the case in full. Extraordinary appeals on procedural and material (cassation appeal) matters against second instance judgments can be further elevated to the Supreme Court, depending on the nature of the legal questions raised or the value of the case (over €600,000). No permission is required for this either; however, the Supreme Court strictly controls the fulfilment of procedural requirements and has a broad discretion to admit appeals (and it may, and frequently does, reject appeals).

Other strategical considerations

In Spain, the statement of defence must be submitted within 20 days from the date on which notice was served and all the documentary evidence, except in special cases, must be presented. The deadlines for submitting expert reports are strict: the claimant must submit them with the claim and the defendant can submit them up to five days before the preliminary hearing, which usually takes place a few months after the statement of defence is filed. Therefore, preparing the case sufficiently in advance is crucial.

Notes

^[1] María Pérez Carrillo and Esther de Félix are partners and Estefanía Portillo is a senior associate at Cuatrecasas.

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

^[3] The Explanatory Memorandum of the CCP states that a special procedure is not considered necessary, but it establishes a series of specific rules in the appropriate places. Specifically, the CCP regulates the capacity to be a party (article 6(7)), the legal standing to exercise collective actions (article 11), publicity and intervention in the process (article 15), the special territorial jurisdiction (article 52), the joinder of proceedings (article 76), the content of the judgment (article 221), the type of proceedings – oral or declaratory – by which the collective action must be processed (articles 249 and 250), the preliminary measures to be requested in these cases (article 256(1)(6)), the enforcement action for consumers (article 519) and the application of coercive fines (article 711(2)).

^[4] Royal Decree Law 1/2007, of 16 November.

^[5] Act 7/1998, of 13 April.

^[6] Act 3/1991, of 10 January.

^[7] See the consumers index.

^[8] Article 12 of the General Contractual Conditions Act and article 53 et seq of the General Consumer and User Protection Act. Claimants can also rely on article 33 of the Unfair Competition Act and article 9(4) of Act 3/2004, of 29 December, establishing measures against commercial late payment.

^[9] Article 12(2) of the General Contractual Conditions Act and article 53 of the General Consumer and User Protection Act.

^[10] Article 2 of Directive 2020/1828.

^[11] Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union (text with EEA relevance).

^[12] Article 4 of Directive 2020/1828.

^[13] In judgment No. 656/2018, of 21 November (ECLI:ES:TS:2018:3909), the Supreme Court clarified that, regarding financial services, a consumer association cannot bring a collective action to court if that collective action represents the interests of non-professional investors whose financial products would not be considered consumer goods (see also the judgment of the Supreme Court No. 691/2021, of 11 October (ECLI:ES:TS:2021:3670)).

^[14] These entities must be legally constituted according to Act 1/2002 and must meet the requirements established in Title II of the General Consumer and User 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. Article 4 of Directive 2020/1828 includes several additional requirements that these entities need to comply with to be able to represent consumers’ and users’ interests.

^[15] Article 11(5) of the CCP. The public prosecutor does not usually bring a class action; however, there have been exceptions, some of the most recent of which include judgment of the Supreme Court No. 47/2017, of 26 January (ECLI:ES:TS:2017:159); judgment of the Provincial Court of Pontevedra No. 33/2020, of 21 February; and judgment of the Provincial Court of A Coruña No. 327/2021, of 30 September (ECLI:ES:APC:2021:2240). More commonly, the public prosecutor intervenes as a party once the proceedings have started and when public interest justifies such involvement (article 15(1) of the CCP).

^[16] Articles 6(1)(8) and 11(4) of the CCP.

^[17] Article 16 of the General Contractual Conditions Act, article 54 of the General Consumer and User Protection Act, article 33 of the Unfair Competition Act, and article 9(4) of the Act establishing measures against commercial late payment.

^[18] Article 11(2) of the CCP.

^[19] Article 6(7) of the CCP.

^[20] Article 11(2) of the CCP. If the associations do not comply with these requirements, the action may be dismissed on the grounds of a lack of capacity to sue (see judgment of the Provincial Court of Seville No. 348/2010, of 7 October).

^[21] Article 11(5) of the CCP.

^[22] Article 6(1)(8) of the CCP.

^[23] Article 11(3) of the CCP.

^[24] Article 11(3) of the CCP.

^[25] Article 15(2) of the CCP.

^[26] Article 256(1)(6) of the CCP. The judgment of the Constitutional Court of Spain No. 96/2012, of 7 May (ECLI:ES:TC:2012:96), interpreted this provision very strictly, stating that these disclosure requests would only be admissible if they are ‘vital’ to initiate specific collective proceedings – the context of this judgment was a banking case, where the disclosure request was aimed at having access to a bank providing a representative consumer association with a list of all its clients in Spain that had contracted interest rate swaps. See also the order of the Provincial Court of Valencia, of 14 December (ECLI:ES:APV:2017:5822A).

^[27] Orders of the Provincial Court of Madrid, of 21 September (ECLI:ES:APM:2018:4176A) and of 28 May (ECLI:ES:APM:2008:6896A); order of the Commercial Court No.1 of Zaragoza, of 15 June; order of the Commercial Court No. 8 of Barcelona, of 22 March 2017; and judicial decree of the Commercial Court No. 6 of Madrid, of 28 November 2019.

^[28] Order of the Commercial Court No. 4 of Valencia, of 5 October 2020; Judgment of the Commercial Court No. 3 of Seville No. 38/2020, of 29 January; Orders of the Provincial Court of Barcelona, of 12 November 2018 (ECLI:ES:APB:2018:6944A) and 18 October 2018 (ECLI:ES:APB:2018:6487A); Order of the Commercial Court No. 12 of Madrid, of 7 May 2019 (ECLI:ES:JMM:2019:41A).

^[29] Article 15(3) of the CCP.

^[30] Article 241 of the CCP.

^[31] Article 15(4) of the CCP.

^[32] Judgment of the Provincial Court of Madrid No. 148/2018, of 21 September (ECLI:ES:APM:2018:4176A); orders of the Provincial Court of Barcelona, of 18 October 2018 and 12 November; and judgment of the Provincial Court of Seville No. 33/2004, of 22 January (ECLI:ES:APSE:2004:255).

^[33] Articles 221 and 519 of the CCP.

^[34] Article 9(6) of Directive 2020/1828.

^[35] Practical Guide Quantifying Harm in Actions for Damages Based on Breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union.