Collective redress is not available in all types of cases in Belgium: that is to say that representative actions are not generally available. Instead, claims which involve multiple claimants may be brought by joining individual actions under the regular rules of civil procedure or commencing a claim by multiple claimants under a single petition. The existing mechanism regarding representative actions is limited in application to actions on behalf of consumers seeking redress against business entities. This summary and the following data analysis focuses on this consumer redress mechanism, referred to as the 28 March Law.
The law of 28 March 2014 introduced a new section into the Economic Law Code entitled 'collective actions', establishing a procedure for such representative proceedings. These actions operate according to the general principles of civil liability and aim to provide compensation for damages suffered by consumers, whilst injunctions are available in regular civil proceedings they are not provided for in the 28 March Law. The scope of the law is somewhat limited: a claim may only be brought by a consumer representative which concerns the breach of a contractual obligation or one of the 31 regulations and laws listed in the 28 March Law. Furthermore, a claim may only be brought against 'a legal or natural person pursuing long-term economic aims'. Hence, group actions may only be brought against businesses or professionals and cannot be brought against governmental or other public bodies or non-profit organisations.
The Belgian legislator sought to create a quick and straightforward mechanism under the 28 March Law and this is reflected in the rules for standing and admissibility. Consumers may not initiate proceedings themselves, and instead must act through a 'group representative' who conducts the proceedings on their behalf. Such a representative must be either:
• a consumer organisation recognised by the Minister of Economic Affairs;
• an association which has been incorporated for over 3 years and has a purpose directly related to collective damages; or
• the Federal Ombudsman.
The limitation of standing to a small number of specialised organisations is intended to have two effects. Firstly, there will be no need for a detailed enquiry into the suitability of a claimant to represent the group during the preliminary stages of the action. Secondly, that such organisations will act responsibly in their pursuit of claims and only bring actions that have a strong chance of success on the merits, especially since they must fund actions from their own resources.
Again, the admissibility phase is intended to be quick and straightforward. Following the commencement of a group action the Court must determine, within a period of 2 months, whether or not the claim is admissible. A group proceeding will only be declared admissible where it can be shown that pursuing the claim as a collective action will be more effective than the consumers bringing individual actions under the ordinary law. The court will consider all the circumstances, including: the size of the group affected; the ease with which that group can be ascertained; the complexity of the case; and the commonality of the individual claims.
There is an emphasis on settlement with a period of mandatory negotiation following the admission of a claim. This is unique compared to claims proceeding under the regular rules civil procedure and must be completed prior to proceeding to the trial of a claim. Interestingly, the law allows the parties a choice as to whether to proceed on an opt-in or an opt-out basis. Where they are unable to reach an agreement, the court will decide, taking into account the size and value of the action as well as considering which best protects the interests of the individuals concerned. This is subject to two limitations. Firstly, in cross boarder cases foreign claimants must opt-in to proceedings; and secondly, cases involving physical or moral harm must use the opt-in model. The approach generally taken by the courts is to apply an opt-in system to cases where they consider that the consumers are aware that they have been a victim and to apply an opt-out system in cases where the consumer may not necessarily be aware that their rights have been infringed.
There are few funding options available to potential claimants in group proceedings and in private cases the burden is always on the consumerorganisation to fund a claim out of their own resources. It is possible for a claimant and a lawyer to agree a reasonable and proportionate success fee although it is prohibited for a lawyer to fund the entire claim up front on a no win no fee basis. Furthermore, although third party funding is a possibility it is rarely used in practice. Since group representatives are only entitled to recover their real costs of bringing the claim it isn't possible for a funder to make a profit from a successful action.
The key incompatibilities of the law with the regulation can be summarised as follows.
• The 28 March Law does not provide for injunctive as well as compensatory actions although injunctions can be obtained under the regular rules of civil procedure.
• Third party funding arrangements and contingent fee agreements are not subject to the review of the courts although they are regulated separately.
• There is no possibility for a follow on action from an administrative decision
• The March 28 Law mandates the parties to negotiate and such negotiation is not based on their consent.
According to the information available at the time of writing the implementation of the law has been moderately successful. Since its coming into force on 1 September 2015, five class actions have been initiated, all by the leading Belgian consumer organisation, Test Achat.
BIICL has recently worked with the German public body, the Gesellschaft fur internationale Zusammenarbeit (GIZ) on a collective redress project....