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Author: Valentina Bineva

II. Overview

Bulgarian legislation provides for a horizontal collective redress mechanism applicable to any area of the law. Relevant provisions are to be found in Chapter 33 ("Collective Actions") of the Code of Civil Procedure (hereafter CCP). Any harmed persons, or organizations established with a purpose to defend the interests allegedly infringed, can make a claim. The action can lead to both injunctive and compensatory relief (punitive damages are not permitted). It is possible to rely on an injunction decision in the follow-on actions for damages, and injunction and compensation can be combined in one single action.

Both the opt-in and opt-out systems are applicable. The court hearing the case shall accept as participants in the process other injured parties, organisations for protection of the injured persons, organisations for 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 who have not declared that they will bring individual claim for damages (Opt-Out). This raises some concerns about the courts' ability to respond to higher and more complex requirements as to their role in the collective actions proceedings.

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

At the request of the claimant, the court hearing the case may rule on adequate interim measures for the protection of the harmed interests. If the defendant fails to comply with the judgment, fines are applicable.

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, and thus not regulated.

As to costs, the "loser pays" principle applies under Bulgarian law; however, the court may lower the costs if they are excessive, considering the actual length and factual complexity of the case. 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.

Regarding specific sectors, Bulgarian consumer legislation provides for a comprehensive legal protection of consumers' interests with both public law and private law enforcement mechanisms. One of those mechanisms is the collective action for consumer protection, brought in civil court proceedings. In Bulgarian consumer legislation, collective actions for injunctive relief as well as for damages were for the first time regulated in the already abrogated Consumer Protection and Trade Rules Act 1999. At present, collective actions in consumer law are provided for in Articles 186, 186a, 188, and 189 of the Consumer Protection Act (hereafter CPA) 2006.

In legal doctrine, collective redress in the CPA is considered a special law as opposed to the general provisions in CCP. In case of contradiction, the rules of CPA will have priority over the CCP ones.

The efficient application in practice of the legal framework on collective redress represents, to a certain extent, a challenge for the state authorities in charge of consumer protection, for consumer associations, and for consumers.


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