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Author: Valentina Bineva

VII. Data

The empirical data under this heading were gathered from the European Commission Report "State of Collective Redress in the EU in the Context of the Implementation of the Commission Recommendation". You can reach the report from the link: Collective Redress Study for the European Commission

The following empirical data were gathered from lawyers, an organisation representing claimants, a public authority representing claimants, a judge, and an academic. Their fields of expertise cover a large panel of areas, with the majority (75%) having experience in consumer law.

Have you been involved in collective redress (as claimant, claimant lawyer, other) or are you envisaging such involvement?

Sixty-two per cent of the respondents have been involved in collective redress in Bulgaria, from their specific stakeholder position: as lawyers assisting corporate clients in class action litigation related to consumer and product liability disputes; as a judge; or as an association filing claims for injunctive orders. Among the respondents not having direct experience in collective redress, one mentions different reasons (time-consuming procedure and excessive requirements for admissibility) which, according to them, lead lawyers to favour traditional multi-party procedures such as joinders.

Gaining injunctive and compensatory redress is deemed difficult by the respondents. Half of them rate the compensatory procedure somewhat difficult, while the other half rates it from very to extremely difficult. Respondents cite procedural hurdles in the admissibility phase and during the constitution of the class, as well as difficulties in identifying, quantifying harm to collective interests. One respondent names as well the lack of regulation on how to distribute damages after the judgment. Funding requirements, court fees and publicity expenses are also mentioned as additional difficulties. Forty per cent of those who answered the question also think collective compensatory redress places more of a burden on the court. A complex and prolonged evidence collection phase is cited as increasing the workload of the judges.

How difficult have you found gaining injunctive order?

The injunctive procedure is judged "heavy" as well, with 60% of the respondents rating it from very to extremely difficult. Although one respondent notes the "likelihood of success", the proceedings are described as demanding, slow and burdensome. The answers reveal a need for a more expedient and efficient procedure. The difficulties pertaining to class constitution are the same as in the compensatory procedure, according to two respondents. One of them reports "the threshold for injunctive orders is rather high", and "there is also a large discretion left to the judges as to what are the appropriate measures in the relevant case". One respondent mentions as well the lack of an effective enforcement mechanism once the injunctive order is obtained.

In general, respondents highlight the length of proceedings, with 75% of them pointing out the average time to dispose of a collective action is longer than for non-collective litigation. One stakeholder reports "the reason for the extended time to consider the case for the injunctive order is not the factual and legal complexity of the dispute but the heavy procedural framework. Such heavy procedural arrangements are not justified in actions for injunctive orders, the purpose of which is to establish the lawfulness/unlawfulness of the trader's conduct". A respondent representing a consumer association mentions that, regarding the cases brought by the association, it takes more than two years to reach a decision.

Although the court is required to direct the parties to a settlement and to explain the advantages of voluntary dispute resolution, collective ADR and settlements do not appear to be a mechanism parties rely upon. None of the respondents have experienced a settlement, although "attempts were made". A stakeholder points out "the possibility for settlement in cases where injunctive relief is sought is low", and depends on the nature of the changes asked.

Are court fees a deterrent to the bringing of a collective claim?

Court fees are an issue for 62% of the respondents. One of them points out that high costs are one of the reasons why "class actions had a difficult start in Bulgaria". Class actions do not benefit from any exemptions regarding court fees, which are thus calculated following the general rule: court fees in Bulgaria are calculated at a flat rate of 4% of the value claimed. Consequently, as highlighted by two respondents, in a collective redress case where all the compensation claims are grouped, court fees can reach a high amount. One respondent thinks consumer claims should be exonerated.

Publicity costs are reported as an additional hurdle. As pointed out by a respondent, "ensuring publicity can lead to additional expenses, which can be quite substantial - normally the courts require dozens of TV and radio spots and publications in major national media, and non-compliance would bar the development of the case".

Is access to justice enhanced by collective redress?

Seventy-one per cent of the respondents to the question do not think collective redress enhances access to justice. The existing procedural framework is mentioned as the major hurdle preventing the success of the mechanism. The requirements in terms of demonstrating adequate representative capacity, dissemination of information about the case and associated costs create substantial barriers to case initiation. A defendant points out "the very restrictive" rules on initiation of collective claims, making it "almost impossible to reach the trial stage". Another defendant believes that the current state of procedural requirements "protects" excessively the potential defendants, and makes the collective redress mechanism an ineffective tool to protect the rights of injured parties.

Are collective actions an effective method to obtain compensation?

In light of the restrictive procedural requirements and the length of the proceedings, 86% of the respondents do not think collective actions are an effective method to obtain compensation.

Is sufficient information available that a collective redress mechanism exists in your country?

Eighty-six per cent of the respondents to that question think information on collective redress is not sufficiently available. It appears only the Commission on Consumer Protection publishes on their website the ongoing class actions. As underlined by one respondent, "society is not really aware and familiar with this opportunity for protection of the collective interest", as it is not "a topic that is or has been a subject of discussion in the media to a sufficient extent". Another respondent mentions the need for other official sources of information to educate the general public about collective redress mechanisms in Bulgaria.

Thirty-three per cent of the stakeholders gave their opinion of the effect of collective redress on the prices consumers pay for goods and services, and they all agree on a significant decrease. For them, the availability of collective redress in general, and the visibility of some cases have led traders to change their behaviours, remove unfair terms and unlawful additional fees from their contracts. One respondent believes the mere existence of a collective redress mechanism removes the commercial incentive to make profits from breaching consumer protection rules, and thus generates a decrease in prices. However respondents are divided on the question of consumer confidence, and half of them do not believe collective redress enhances such confidence, as the mechanism lacks practical efficiency.

Are there risks of abusive litigation?

Fifty-seven per cent of the respondents raise a concern about the risks of abusive litigation. One stakeholder mentions the possibility of a more powerful party "dominating" the proceedings, and another respondent targets the competition area, where claims could be raised in order to "remove another competitor from the market", rather than denounce an actual existing violation. One respondent nonetheless points out "the existing admissibility requirements" would prevent such abusive claims.

Regarding cross-border litigation, as noted by the respondents, no limitations exist as to the nationality of the parties that are able to bring claims, and "foreign organizations are recognized and entitled to appear before a Bulgarian court and to join in cases". Despite the apparent absence of procedural obstacles, Bulgarian legal practice does not seem to have so far experienced any cross-border collective redress. Respondents point out potential problems regarding the complexity of the procedure: "where the plaintiffs allege that the harm extends beyond the territory of Bulgaria, the publication requirements would be expanded accordingly, which would create additional burdens for the initiation of class action proceedings".

General remarks from the stakeholders include the need for a simplified procedure, to obtain timely protection of the injured collective interest. A mandatory time frame for the examination of cases is suggested by one respondent. An effective system of interim measures to stop the violation during the proceeding is also requested, and one respondent also makes a case for more efficient cross-border proceedings, to ensure rapid procedures and effective enforcement.


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