The legal provisions of Chapter 33 of CCP are applicable, Articles 379-388.
The approach is horizontal. The CCP provisions regarding the horizontal collective redress mechanism are applicable to infringements of any collective interest. For instance this mechanism is applied to commercial law disputes, namely for repealing of a resolution of the general meeting of a joint-stock company with issued bearer shares; furthermore for protection of collective interest against unfair competition such as misleading or comparative advertising, imitation or abuse of stronger bargain power ; environmental claims as well as for protection of collective interests of consumers.
b.Injunctive or compensatory or both
According to Article 379 of the CCP, a collective action can take the form of
-A claim for declaratory judgement
-A claim for an injunction, or
-A compensatory claim.
The court competent to hear the action is the district court.
Collective action can be brought for protection against infringements of collective interest, namely where, due to the nature of the infringement, the circle of the affected persons cannot be defined precisely but is identifiable - Article 379 (1) of CCP. The standing is granted to any of the following:
-Any persons who claim that they are harmed by the infringement of collective interest (injured parties),
-An organisation established ad-hoc for protection of the persons affected by a certain infringement of collective interest, or
-An organisation established for protection against infringements of collective interests.
In Bulgarian legal literature, it has been pointed out that the uncertainty about identification of individuals affected (only identifiability of their class/group) is a characteristic of the subject of the procedural relationship, including in cases where the action is brought by organisations designated to protect the collective interests. This is because the subject of a procedural relationship is always the class (the group) and the organisation-plaintiff has the role of a special kind of a representative who performs all procedural actions in the name of and on behalf of all persons who constitute the class (the group). This is a feature of collective actions which distinguishes them from joint claims brought by relatively large groups of individually defined persons under the conditions of the subjective joinder of claims. Whether a person belongs to the class (the group) or not, is determined based on specific criteria related to the particular features of the committed infringement over a given period of time and within certain territorial limits, for instance, all customers of a certain telecommunication company XYZ for the year 2016. Therefore, legal authors assume that the composition of the class (the group), though not individually defined, is rather stable and unchangeable. Furthermore, the legal authors stress out that despite meeting the class-defining characteristics, the persons who have explicitly requested to be excluded from the collective action (performed the right on Opt-Out), are no longer an element of the circle of persons whose interests are protected in the collective proceedings (the class/group).
c.Availability of Cross Border collective redress
The horizontal collective redress mechanism can be applied also to cross-border disputes. The general procedural rules on parties located abroad will be relevant, namely rules on summonses (Articles 40, 48 of CCP), rules on territorial judicial competence for a defendant without a permanent address in Bulgaria (Article 107 of CCP), establishment of facts which have occurred abroad (Article 548 of CCP) as well as the Part VII of CCP "Special rules regarding proceedings in civil cases subject to operation of Community law".
Bulgarian legal practice however does not seem to have experienced so far any such cross-border collective redress proceedings.
d.Opt In/ Opt Out
Principal availability of both options
Bulgarian legislation allows both options, namely the court hearing the case shall:
-accept for participation in the process other injured parties, organisations for protection of the injured persons, organisations for protection of the injured collective interest, or organisation for protection against such infringements that have requested a participation in the process within the stipulated term (Opt In), and
-exclude injured parties who have stated within the timeframe set that they will pursue their defence independently in a separate process (Opt Out) - Article 383 of CCP.
The legal provisions prescribe some general requirements the parties should meet, namely they need to belong to any of the following categories "injured parties, organisations for protection of the injured persons, organisations for protection of the injured collective interest, or organisation for protection against such infringements" (Article 383 (1) of CCP). It is up to the judge discretion to decide if a certain person or organisation is meeting these criteria, which raises some concerns in the legal literature about court capability to respond to the even higher and more complex requirements for the role of the court in the collective actions proceedings. 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.
Opt-out justified by the sound administration of justice
The dispositive principle is one of the fundamental principles of Bulgarian Civil Procedure Law - Article 6 of CCP. Persons can freely decide whether to commence a court proceeding for protection of their civil law rights, define the scope of protection of their rights, or even terminate the civil court case (or their participation in it) at any time. Therefore, the provision of Article 383 (1) p. 2 of CCP (Opt Out option) can be considered compliant with the main principles of Civil Procedural Law.
Specific measures related to the fact that affected persons are not identifiable
The class of affected persons needs to be defined in the legal claim without identifying each and every individual. For this purpose, the law requires that the court hear in an open session (with summoning of the plaintiff and the defendant) all parties' observations on the circumstances determining the class of the persons affected and the manner of communication of the collective action to the public - Article 382 (2) of CCP. The Court states an appropriate way of communicating the claim (how many messages, by what media, and for how long they should be made) as well as an appropriate term after publishing in which injured parties can declare whether they are willing to participate in the proceeding (Opt In) or will pursue protection of their rights in a separate proceeding (Opt Out) - Article 382 (2) of CCP.
e.Main procedural rules
Admissibility and certification criteria
Article 381 of CCP requires that the court hearing the case verifies the admissibility of the claim and the regularity of the claim ; the court shall additionally ex officio verify the ability of the person or persons who have brought the action to seriously and in good faith protect the injured parties and bear the costs of the proceedings, including expenses. The court may hear in an open session the person or persons who filed the claim. The court will only allow the hearing of the case should any of the plaintiffs meet the above-mentioned conditions - Article 381 (3) of CCP.
Single or Multi-stage process
It is a multi-stage process. Initially, in a closed session the court verifies the admissibility and regulatory of the claim as well as the certification of the plaintiff - Article 381 (1) of CCP.
Afterwards, in an open session with summoning of the parties, the court hears the parties' observations on the circumstances determining the class of the injured parties and the manner of communication of the collective action to the public - Article 382 (1) of CPP.
The whole collective action can in general go through three instances - first, appeal and cassation. The cassation is admissible only for civil claims for damages over 5,000 BGN .
Case-management and deadlines
Apart from the general procedural deadlines , the Code of Civil Procedure contains special provisions on deadlines specific to the collective actions, for instance the deadline for Opt Out/Opt In - Article 382 (2) of CCP. The duration is defined by the court and is announced to the public so that the interested parties can request to be excluded from, respectively included in the proceeding.
Expediency (particularly in injunctive cases)
Article 310 of CCP provides a summary procedure only for cases of ascertainment and cessation of infringement of rights under the Consumer Protection Act (injunction).
General procedural rules are applicable - Chapter 14 "Evidence" of CCP.
The main principle is that each party bears the burden of proof for the facts their claims and objections derive from - Article 154 (1) of CCP. Exceptions are facts based on presumptions (Article 154 (2) of CCP) as well as any facts of common knowledge and any facts known to the court ex officio, of which the court is obligated to inform the parties (Article 155 of CCP).
Acceptable are the following evidences - testimony, explanations by parties, written evidences, expert witnesses, and inspection and certification.
According to Article 385 (2) (3) of CCP, the court hearing the case, acting on a request by the plaintiff, may rule on adequate interim measures for protection of the harmed interests. The ruling may be modified or vacated by the same court in case of any change of circumstances, errors or omissions. The ruling is subject to appeal and cassation review, which do not prevent the enforcement of the ruling, unless the court competent to examine the appeal orders otherwise.
The interim measures requested by the plaintiff are not binding for the court hearing the case, which can rule measures deferring from the suggested ones.
Court directed settlement option during the procedure
The court which the action has been brought before is obliged to direct the parties to a settlement and explain thereto the advantages of considering any options for reaching a voluntary resolution of the dispute (Article 384 (1) of CCP).
Additionally, a special provision in the summary procedure (Article 315 (1) of CCP) requires that the court, during the hearing for examination of the case, re-invite the parties to reach a settlement.
Bringing a collective action is not considered an obstacle for out-of-court settlement. For this purpose, the parties may attend hearing before reconciliation commission or mediator. If the parties reach agreement on commencement of mediation or another procedure for voluntary resolution of the dispute, the court proceeding shall be stayed. In case a settlement has been reached, it then needs to be approved by the reconciliation commission as well as the court hearing the collective action case. The court checks whether the settlement agreement conflicts with the law or with good morals as well as if the measures it provides are suitable and sufficient for the protection of the collective interest at stake. The settlement agreement only takes effect after the court's approval - Article 384 (3) of CCP.
In case of out of court settlements: judicial control
According to Article 384 (2) (3) of CCP, the court approves the settlement, agreement, conciliation or another accommodation reached on a partial or complete resolution of the dispute only if the accommodation does not conflict with the law or good morals and if the harmed interest can be protected in a sufficient degree through the measures included in the said accommodation. The accommodation on the resolution of the dispute takes effect only after it has been approved by the court.
a.Type of damages
The law provisions do not specify the type of damages that can be claimed in the collective compensatory action proceedings.
Bulgarian case law seems to accept the view that both pecuniary and non-pecuniary damage can be sought in such proceedings, depending on the specific facts and circumstances of each case.
b.Allocation of damages between claimants for compensatory claims/ distribution methods
The court may decree that the compensation be credited to an account of one of the plaintiffs, to a special account jointly disposable by the plaintiffs, or to a special account jointly disposable by the injured parties - Article 387 (1) of CCP. The court may obligate the plaintiffs to transfer the compensation to a special account jointly disposable by the injured parties, taking adequate measures to secure the execution of this obligation Article 387 (2) of CCP.
-Availability of punitive or extra-compensatory damages and their conditions - N/A
-Skimming-off/ restitution of profits - N/A
The court hearing the collective action case may order the defendant to perform a specific act, to refrain from performing a specific act, or to pay a specific amount - Article 385 (1) of CCP.
Moreover, the court is not bound to accept the measures for protection requested by the plaintiff. Considering the specifics of the case and after considering the stand of the defendant, the court may as well order other measures which ensure adequate protection of the harmed interest, i.e. to act ex officio - Article 385 (4) of CCP. However as per the legal literature the court cannot grant damages in an amount higher than requested by the plaintiff.
c.Possibility to seek an injunction and compensation within one single action
It is possible for the plaintiff to bring several actions against the same defendant by a single statement of action if the said actions fall within the competence of the same court and are subject to examination in the procedure of the one and same type - Article 210 (1) of CCP. When the actions brought are not subject to examination in the one and same type of procedure or the court determines that the joint examination of the said actions will be considerably impeded, the court can decree a dis-joinder of the actions - Article 201 (2) of CCP.
d.Possibility to rely on an injunction in separate follow-on individual or collective damages actions
It is possible to rely on an injunction decision in the follow-on actions for damages.
According to Article 386 of CCP, the judgment of the court has legal effect for the infringer, the person or persons who have brought the action, as well as those persons who: 1. Claim they are harmed by the established infringement, and 2. Have not declared they wish to pursue a remedy independently in a separate procedure (did not Opt Out).
The persons who opted out may avail themselves of the decision by which the collective action has been granted, however they are not bound by the decision for dismissing the collective action. That is why a list of the excluded persons must be attached to the decision of the court - Article 386 (2) of CCP.
General rules are applicable - limitation period is 5 years.
a.Basic rules governing costs and scope of the rules
Some legal authors express regrets that the Bulgarian legislator has failed to lay down special rules on fees due on collective actions. In the Bulgarian legal system, the court fees in civil cases are particularly high (in the majority of cases they are determined as a percentage of the material interest to be protected). In the absence of special rules to determine the fees, the courts must look for the volume of material interest, which will usually be measured in thousands or even in millions of Bulgarian leva (BGN) for the compensatory collective actions. The fees set by the general rule will be impossibly high, and in practice, the applicability of the compensatory collective redress will be frustrated . There are suggestions that a special charging system for the collective action be introduced which takes into consideration the important role of the collective redress institute for the protection of minor individual interests for which no adequate legal remedies would otherwise be available.
Costs consist of:
-Court fees - the injunction action can be considered as a claim for unappraisable interest (without a certain material interest), therefore the court defines the amount of the due fee and it can vary between 30 BGN and 80 BGN per claim - Article 71 (1) of CCP in connection with Article 3 and 4 of the Tariff for state fees collected by the courts under the Civil Procedure Code from 2008. Court fees for a claim with a certain material interest is 4% of the amount of the claim, but not less than 50 BGN.
-Expertise remuneration - depending on complexity and scope of the tasks - between 500 and 1000 BGN, or even higher;
-Advocate fees - for claims for unappraisable interest the minimum fee is 300 BGN , in practice however it varies and could be much higher than that and can reach up to a few thousands BGN. For claims with a certain material interest the exact amount of advocate fee depends on the amount of the claim - the higher the latter is, the higher advocate fee is.
-Costs for publishing - they depend on the media and the size of the publication, and may vary between 10 and 30 BGN.
b.Loser Pays Principle (and exceptions from it)
Loser Pays principle is applicable to civil proceedings, including collective action ones, as per the Bulgarian law in force.
According to Article 78 of CCP, the fees paid by the plaintiff, the costs of the proceeding, and the fees for one lawyer, if any, are paid by the defendant commensurate to the portion of the action granted. The defendant, too, has the right of payment of the costs incurred commensurate to the portion of the action dismissed. If the defendant has not provided an occasion for the institution of the case or if the defendant admits the claim, the costs shall be awarded against the plaintiff.
The legal provision allows a decrease of lawyers' fees, namely if the fees paid by the party are excessive considering the actual legal and factual complexity of the case. In such case the court, acting on a motion by the opposing party, may award a lower amount of the costs in this part, but not less than the minimum amount set per Article 36 of the Bar Act.
Parties in financial hardship are entitled to Legal Aid. If the claim of a recipient of legal aid is granted, the lawyers' fees paid shall be awarded in favour of the National Legal Aid Office commensurate to the portion of the action granted. In the cases of a judgment adverse to the recipient of legal aid, the said recipient shall owe costs commensurate to the portion of the action dismissed.
Availability (or not) of contingency fees and their conditions
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) - Article 36 (4) of the Bar Act.
However, according to the established Bulgarian case law, conditional fees are not recoverable as they depend on the outcome of the case and, hence, have not been paid up by the end of the trial, e.g. by the end of the final court hearing before the court decision.
a.Availability of funding
Based on the information collected for the purposes of the current study, it can be summarized that collective actions for protection of collective interest are funded by various sources, namely by the state budget (collective actions brought by the Commission for Consumer Protection), private donations , own financial resources of plaintiffs, or state funding for qualified consumer organisations.
b.Origins of funding (public, private, third party)
As mentioned above, there are various sources of funding - state budget, private donations, own financial resources of plaintiffs or state funding.
c.Conditions and frequency of resort to third party funding
No relevant information on third party funding has been found.
d.Control of funders (Courts/Legislators/Self-regulation)
No relevant information on control over third party funding has been found.
The system for control of spending the budget funding received by consumer organisations is regulated in the Chapter 5 of the Ordinance #RD-16-1117/01.10.2010.
No relevant information on the relationship between claimants and third party-funders has been found.
7.Enforcement of collective actions/settlements
a.Framework for enforcement
The general provisions of the Code of Civil Procedure (Part V of CCP) are applicable, namely:
-Title 2 "Enforcement of Pecuniary Receivables" - for compensatory redress;
-Title 2 "Enforcement of Non-Pecuniary Receivables", Chapter 45 "Performance of Specific Act" - for injunctive redress. According to Article 527 of CCP, where the act cannot be performed by another person but depends exclusively on the will of the execution debtor, the enforcement agent, acting on a motion by the execution creditor, shall compel the said debtor to perform the act, imposing thereon a fine not exceeding BGN 200. If even after that the execution debtor fails to perform the act, the enforcement agent shall impose thereon successive new fines up to the same amount.
b.Efficient enforcement of compensatory/ injunctive order
The level of efficiency of enforcement of orders for the protection of collective interests seems to be the same as the one of the other orders.
c.Cross border enforcement
Legal Framework is in the Code of Civil Procedure:
-Chapter 57 "Recognition of and Admission to Enforcement of Judgments and Judicial Acts Subject to Operation of Community Law;
-Chapter 58 "Enforcement Pursuant To Regulation (EC) No 1896/2006 of The European Parliament and of The Council creating a European Order for Payment Procedure.
8.Number and types of cases brought/pending
During this study no information on a National Register of Collective Actions existing has been found .
Since 2016 the Annual Statistical Reports prepared and published by the Supreme Judicial Council contain data also on collective actions. For instance, the Annual Report for 2016 states the district courts in Bulgaria heard in 2016 altogether 31 collective actions, out of which in 2 cases the claims were fully granted, in 10 cases - partially granted, and in 2 cases the claims were dismissed, however, in the report, it is not specified for which type of rights protection was sought, namely consumer interests, labour rights, or other.
9.Impact of the Recommendation/Problems and Critiques, including
a.Impact of the collective mechanism (or lack of) on behaviour/ policy of stakeholders (direct/ indirect, economic/social impact)
The impact is visible and positive. For the last few years since the collective redress mechanism was introduced in Bulgarian legislation, quite a few collective actions have been brought and the public awareness of this redress mechanism seems to be raised. The collective actions proceedings are mainly for the protection of collective consumers' interests and only few proceedings are for the protection of collective interest in areas other than consumer protection.
When it comes to consumer collective redress, it is noticeable that the number of actions brought by consumers' organisations is significantly lower than the number of those initiated by the Commission for Consumer Protection, mainly due to hindering effect of bearing costs of proceedings as well as the lack of resources for organising and successfully managing such complex proceedings.
The collective redress mechanism also has an impact on businesses, although a more indirect one. The requirement for a public announcement of the collective action brought, along with a corrective statement, encourages the infringers to voluntarily stop the unlawful behaviour (for instance, to cease the unfair practice or remove the unfair term) in order to prevent a harm to their good reputation in the business world. Although not many yet, such situations of proactive rectification can be found in Bulgarian practice, and they are revealing the impact which collective redress mechanisms have on the behaviour of businesses.
b.Incompatibilities with the Recommendation's principles
Based on the information collected for the purposes of the current report, a conclusion can be drawn that Bulgarian legislation in force is to a great extent compliant with the principles of Recommendation from 2013 with few exceptions:
-There does not seem to exist a National Register of Collective Actions;
-There is a room for improvement in regards of the requirement for the collective redress procedures not to be prohibitively expensive. 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.
-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.
c.Problems relating to access to justice/fairness of proceedings including
Restrictions on access to justice negatively affecting collective redress
Only the organisations for which the court has ex officio verified the ability to seriously and in good faith protect the injured party and bear the costs of the proceedings, including expenses, can bring collective actions. The decision is left to the court's discretion and may create undesirable procedural obstacles for some organisation to prove their capacity and resource to bring such actions and successfully manage the cases.
Time and burden of collective actions on courts and parties compared to non-collective litigation
The collective redress procedure has specifics which require more time for preparing and managing the case both on the side of the parties involved and the judge hearing the case.
Risks of and examples for abusive litigation
Such risks exist in Bulgarian practice, however currently only theoretically. No information on abusive litigations has been found.
Effective right to obtain compensation.
The right on compensation for damage on collective interest is acknowledged by general rules on collective redress mechanism. Due to a lack of sufficient case law on collective compensatory redress however it is difficult to assess the effectiveness of this right.
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