• Multiple consumers to be able to bring a single class action for compensation.
• Limited to collective damage caused by an undertaking which has breached a contractual obligation or violated certain legislative provisions.
• New Act aims to avoid class action excesses.
After several years of debating the question, the Belgian Government has finally approved the introduction of a class action procedure. The new Act is designed to strengthen consumer protection by making it possible, in certain circumstances, for an authorized representative to claim, on behalf of a group of consumers, for damages suffered by its constituent members as a result of a breach of contract or violation of listed legislations by a business entity (undertaking).
Scope of the claim
A class action can only be introduced if there is collective damage, i.e. damage suffered by a group of consumers arising from a common cause, and that common cause results from either a breach by the undertaking of (i) one of its contractual obligations or (ii) the infringement of a Belgian or European legislative act related to consumer protection. The Act contains a non-exhaustive list of such legislative acts including, but not limited to: data protection, financial services, defective products, and electronic communications.
Who can initiate a class action?
The "class" consists of all consumers (natural persons) who have personally incurred injury or loss as the result of collective damage. Depending on the case and the court's determination, the opt-in or opt-out system applies. Under the opt-in system, consumers must identify themselves and ask to be included in the group. Under the opt-out system, all consumers falling within the definition of the group are automatically members, unless, within a given time, they have asked to be excluded from the group. Consumers residing outside of Belgium will always have to opt-in.
The choice of the consumer to opt-in or opt-out is irrevocable and the court's decision is binding on all group members.
The "class" can only be represented by a group representative who will act on behalf of the group for the purpose of the proceedings. The representative must either be (i) an association which defends the interests of consumers and is a member of the Consumers' Council or which has been approved by the Minister for Consumer Affairs ; or (ii) an association approved by the same minister, the aims of which are associated with the damage incurred by the class members, which has no profit motive, and which has existed for more than three years or (iii) a public mediation service for consumers, in so far as there is a settlement agreement, and the class action procedure only requests its homologation.
The proceedings
The procedure can be introduced through a unilateral application. The court of first instance (or the commercial court, if the plaintiffs so choose) of Brussels has exclusive jurisdiction.
The procedure consists of the following three phases, i.e. (i) the admissibility phase; (ii) the confirmation of a collective settlement or a decision on the merits and (iii) the implementation phase.
First, the court will assess whether the admissibility criteria are met and whether the class action procedure is more effective than individual law suits. The court will also decide whether the opt-in or opt-out system applies.
Once the time-limit for the opting in or opting out has expired, the parties can start negotiating with a view to reaching an amicable settlement. If they reach such an agreement, they will file it at court for homologation. The court will examine whether the agreement contains all elements required by law and if it is acceptable on the merits. If the terms are found incomplete or inadequate, the court can request the parties to complete the agreement.
Once the agreement is final, the judge will confirm it, unless he finds (i) the redress, (ii) the timeframe to implement the agreement, or (iii) the publication measures unreasonable or if the compensation for the group representative does not correspond to the real costs borne by the group representative.
The court will rule on the merits of the case if (i) no settlement has been reached between the group representative and the defendant within the set timeframe, (ii) the parties have not completed the settlement as requested by the court or (iii) if the court has refused to confirm the settlement.
Once the court has ruled on the merits of the case or has confirmed the settlement agreement, it will appoint a liquidator whose duty it will be to implement the amicable settlement or the court decision. The liquidator will draw up a preliminary list of consumers and will supervise the payment of the compensation to the relevant consumers. Once the liquidator has filed his final report, the court will pronounce the closure of the case.
Entry into force
The Act only applies to damage, the cause of which arose after the entry into force of the Act.
in collaboration with Katrien Baetens - Associate
katrien.baetens@loyensloeff.com
