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Bulgaria

Author: Valentina Bineva

I. Factsheet

Scope

Bulgarian law provides for a horizontal collective redress mechanism, injunctive and compensatory.

There are also specific consumer mechanisms:

-Collective action for injunctive relief, for the cessation or prohibition of any infringement harmful to collective consumers' interests

  • Collective (group/class) action for damages to the collective consumers' interests
  • Collective action for damages suffered by consumers

Standing (Para. 4-7)

Horizontal mechanism: any harmed persons, or organizations established with a purpose to defend the interests allegedly infringed.

Consumers mechanisms:

  • Collective action for injunctive relief: registered and qualified consumer protection organisations, and the Commission for Consumer Protection
  • Collective action for damages suffered by consumers: any consumer organisation, provided it has been granted with a power-of-attorney to bring the action on behalf of at least two identified consumers who have suffered damage from the same infringement.
  • Collective action for damages to the collective consumers' interests: any consumer association

Admissibility (Para. 8-9)

Article 381 of the Code of Civil Procedure requires that the court hearing the case verifies the admissibility and regularity of the claim.

Information on Collective Redress (Para. 10-12, 35-37)

There are a couple of channels, namely via:

  • Announcement on the website of the Commission for Consumer Protection or other organisations for consumer protection;
  • Publications in the press or other information in media;
  • Announcement at the defendant premises

Problems/Incompatibilities with Recommendation principles

No national registry.

Funding (Para. 14-16)

Collective actions are funded by various sources - state budget (the actions brought by the Commission for Consumer Protection), private donations, own financial resources of consumer organisations, and state funding.

Third-party funding is unknown in Bulgaria.

Problems/Incompatibilities with Recommendation principles

There is no regulation of third party funding.

Cross Border Cases (Para. 17-18)

The horizontal collective redress mechanism can be applied to cross-border disputes. The general procedural rules on parties located abroad will be relevant.

An action for collective redress can be brought by a qualified consumer protection organisation from any other member state of the EU, provided that an infringement of collective interests of consumers committed in Bulgaria has effects also on its territory and it is included in the list of qualified organisations prepared by the European Commission published in the Official Journal

Despite this provision, Bulgarian legal practice does not seem to have so far experienced any cross-border collective redress.

Expedient procedures for injunctive orders (Para. 19)

At the request of the claimant, the court hearing the case may rule on adequate interim measures for the protection of the harmed interests.

Problems/Incompatibilities with Recommendation principles

The lack of court chambers specialized in collective redress procedures can be considered as a disadvantage which appears to decrease the efficient case management as some judges are not very familiar with the specifics of this procedure.

Efficient enforcement of injunctive orders (Para. 20)

If the defendant fails to comply, fines are applicable.

Opt-In/Opt-Out (Para. 21-24)

Availability of both options:

  • The court hearing the case shall accept as participants in the process other injured parties, organisations for the protection of the injured persons, organisations for the protection of the injured collective interest, that have requested participation in the process within the stipulated term (Opt-In), and
  • The court decision is binding for all persons harmed by the same infringement and have not declared that they will bring individual claim for damages (Opt-Out).

Problems/Incompatibilities with Recommendation principles

The requirements the parties must meet are prescribed by law but it is up to the judge's discretion to decide if a certain person or organisation is meeting these conditions. This raises concerns about court capability to respond to the complex requirements for collective actions. Courts are not only expected to comply with all formal requirements of the legal procedure, but also to ensure a fair trial for all parties involved.

Collective ADR and Settlements (Para. 25-28)

The court is required to direct the parties to a settlement and explain the advantages of voluntary dispute resolution (Article 384 (1) of CCP). The court approves the settlement only if it does not conflict with the law or good morals and if the harmed interest can be sufficiently protected.

The settlement takes effect only after it has been approved by the court (Article 384 (2) (3) of CCP).

Costs (Para. 13)

The 'loser pays' principle applies. The court may lower the costs if they are excessive considering the actual length and factual complexity of the case.

Problems/Incompatibilities with Recommendation principles

In general, the costs of collective actions procedures in Bulgaria are high, which seems to be an obstacle for bringing new collective actions, especially by consumer organisations.

Lawyers' Fees Para. 29-30)

The Bulgarian legal system allows conditional fee arrangements between a lawyer and a client, except for cases involving non-material interest (such as collective action for injunction).

Problems/Incompatibilities with Recommendation principles

Contingency fees are possible and not explicitly regulated.

Prohibition of punitive damages (Para. 31)

Punitive damages are not allowed under Bulgarian law.

Collective Follow- on actions (Para 33-34)

It is possible to rely on an injunction decision in the follow-on actions for damages.

The interplay between injunctions and compensation across all sectors

Injunction and compensation can be combined in one single action.

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