Spain: Class actions – litigation, policy and latest developments

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 (eg, standing, competence, publicity and claim preclusion).^[3]

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 Consumer Protection Act;^[4]
• the Act on the General Terms and Conditions of Contracts;^[5] and
• the Spanish Unfair Competition Act.^[6]

On 20 December 2022, the Draft Bill for the Protection of the Collective Interests of Consumers, aimed at transposing into Spanish law 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 was approved (the Draft Bill). On 9 January 2023, the Draft Bill was made available for public consultation and multiple interested parties made contributions (mostly concerning the opt-out system, legal standing and enforcement proceedings). Its content will entail a substantial modification of the current regime of collective actions, but it is still pending approval.^[7]

The Act on the General Terms and Conditions of Contracts and the Consumer 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 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 (EU) 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 the defendant 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 General Terms Registry according to the applicable legislation.

In parallel, Directive (EU) 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, aimed at obtaining a judgment ordering the defendant to cease the conduct and prohibit its future repetition; and
• redress measures aimed at obtaining a judgment ordering the defendant to repair the damages suffered by the consumers by the infringing conduct.

As indicated in Recital 43 of Directive (EU) 2020/1828, punitive damages cannot be imposed on the defendant under Spanish law. According to the Directive, the Draft Bill provides for both redress and injunctive measures.

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 applies to consumers only, anticompetitive class actions are not available for non-consumer claimants. The Draft Bill does not change this, as the new regime only applies to consumers.

However, claims from different parties can be grouped together through a joinder of claims under article 72 of the CCP, under which individual claims must have a sufficient connection. This is considered to happen 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 be reluctant to permit a broad use of the joinder of claims. In the context of the Trucks Litigation arising from the European Commission’s 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.

New claims during a competition authority investigation

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 the judgment if the European Commission, the Spanish National Markets and Competition Commission (CNMC) or any of the regional competition authorities have an ongoing investigation into the same alleged violation, and knowledge of the administrative decision is necessary.

Anti-competitive 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.

Findings of competition authorities and court decisions

Before the regime introduced by Directive 2014/104/EU (the Damages Directive),^[11] 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 European Commission 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 are 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 for Spanish courts when deciding on damages claims, even before the Damages Directive was transposed into Spanish law.

Bringing claims

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

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 the European Union also have legal standing to exercise cease-and-desist collective actions.^[16]

Sectorial legislation gives legal standing to other entities such as national or regional consumers institutes, chambers of commerce and professional associations.^[17] For professional associations, 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 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 EU 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 (apart from the general legitimation of the Attorney General and qualified entities under EU law).^[24]

The Draft Bill essentially maintains the current legal standing regime, except for groups of consumers who have suffered damages, which will not be entitled to bring representative actions. Likewise, individual consumers will no longer be able to intervene as a party in the proceedings.

Class certification process

The current Spanish regime does not provide for a certification process to establish a class or group. There is no provision on this matter in Directive (EU) 2020/1828 either.

However, the Draft Bill establishes for the first time a certification hearing, which is considered the most relevant procedural novelty. At this stage of the process, it will be verified that:

• the representative action is legitimate, both from the perspective of the defendant and the plaintiff;
• there is the necessary homogeneity of claims;
• the action is not manifestly unfounded; and
• the possible financing by third parties is not a source of conflicts of interest.

At the end of the hearing, if the requirements are met, the court will issue the certification order, which will determine the objective and subjective scope of the process, that is, the consumers who will be affected.

Notice requirements and the right of consumers

Although, under the current regime, collective actions in Spain do not proceed on an ‘opt-in’ or an ‘opt-out’ basis, the CCP sets an ‘announcement and intervention’ system to call the affected consumers to appear in the proceedings and 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 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 (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 (eg, 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 (eg, when there are joint actions to cease-and-desist action itself). 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 defend its interests through new individual 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. However, these consumers may rely on the collective action judgment, 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 (EU) 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]

The situation will change under the new regime as the Draft Bill provides an opt-out mechanism for redress measures. Consumers will be required to express their wish not to be represented by the qualified entity in the collective action. Otherwise, they will be bound by the outcome of the representative action. In exceptional circumstances, the court can decide that only those consumers who have explicitly expressed their wish to be bound by the representative action will be affected by the outcome of the proceedings, if the amount claimed is over €5,000. An opt-in scheme is also foreseen for affected consumers who do not usually reside in Spain.

Addressing damages in these 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 direct damage, lost profits and 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 based on its evaluation of those reports and the experts’ defence 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 European Commission’s Practical Guide.^[35]

Settlement of collective claims

Currently, under the CCP, there is no specific procedure for 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 (EU) 2020/1828 expressly recognises that collective claims can be settled and 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. Following these provisions, the Draft Bill permits redress settlements provided that:

• the request for authorisation of the settlement indicates the amount to be paid to each beneficiary or each category of beneficiary established in the settlement and how to distribute the compensation among them; and
• it is not unduly prejudicial to the rights and interests of the consumers affected or contrary to mandatory provisions.

Mandatory and voluntary redress schemes

The competition authority cannot impose mandatory redress schemes, but the CNMC may reduce the amount of an administrative fine imposed if an infringer has adopted measures to redress the harm caused (article 64.3.c of the Defense of Competition Act).

Right to appeal

All parties are entitled to appeal a judgment or final order that is contrary to their interests. Although no permission is required, 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; 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). This can change under the new regime as the Draft Bill provides that collective second instance rulings will in any case be subject to appeal in cassation, with preferential processing. 

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 also be filed. The deadlines for submitting expert reports are also strict; the claimant must submit the reports 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. Hence, preparing the case sufficiently in advance is crucial.

Notes

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

^[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 rules in the appropriate places. Specifically, the CCP regulates the capacity to be a party (article 6.7º), 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 256.1.6º), 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] For more detail on the Draft Bill, see our article ‘Approval of bill signals major reforms to Spain’s class action landscape’, available at: https://globalcompetitionreview.com/hub/class-actions-hub/2022/article/approval-of-bill-signals-major-reforms-spains-class-action-landscape.

^[8] Article 12 of the Act on the General Terms and Conditions of Contracts and 53 et seq of the Consumer Protection Act. Claimants can also rely on article 33 of Act 3/1991, of 10 January, on unfair competition; and article 9.4 of Act 3/2004, of 29 December, establishing measures against commercial late payment.

^[9] Article 12.2 of the Act on the General Terms and Conditions of Contracts and article 53 of the Consumer Protection Act.

^[10] Article 2 of Directive (EU) 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 (EU) 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 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. Article 4 of Directive (EU) 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 are 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 6.1.8º and 11.4 of the CCP.

^[17] Article 16 of the Act on General Terms and Contractual Conditions; article 54 of the Consumer Protection Act; article 33 of the Act on Unfair Competition; and article 9.4 of the Act establishing measures against commercial late payment.

^[18] Article 11.2 CCP.

^[19] Article 6.7º CCP.

^[20] Article 11.2 of the CCP. If 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 Sevilla 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 256.1.6º of the CCP. The Judgment of Spanish Constitutional Court 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 (EU) 2020/1828.

^[35] Practical Guide on qualifying harm in actions for damages based on breaches of article 101 or 102 of the Treaty on the Functioning of the European Union.