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Denmark

Author: Anders Schäfer

II. Overview

There is a general collective redress mechanism in the Danish legal system. The Danish Administration of Justice Act made class actions possible as an in-court procedure. This mechanism may be used for both compensatory and injunctive relief.

The class action scheme is primarily based on the opt-in model. An opt-out class action is possible but the class representative must be a public body authorised by law to assume this role. At present, only the consumer ombudsman has been authorised to act, but in specific areas of law.

In addition to the class action mechanism, a test case procedure exists. The test case procedure requires that an organisation (such as a trade union) acts as a representative ("mandatar") in a test case on behalf of one or more of its members. The Danish legal system also contains traditional rules on multi-party litigation such as joinder. Joinder of persons has been used in a competition damages cases brought against different undertakings accused of participating in a cartel. Both compensatory and injunctive relief are available through these mechanisms.

Under the class actions mechanism, it is possible to seek an injunction and compensation within one single class action. It is also possible to rely on an injunction in a separate follow-on individual or collective damages action if the parties are the same in both cases. The same would be the case if the injunction is based on public enforcement (e.g. a decision from the Danish Competition authorities) and the decision is final (no access to appeal). If the injunction case and the follow-on damages include different private plaintiffs, it is not possible to rely on the injunction (it would not be binding) in any separate follow-on damages case. However, it may have precedent.

As to costs, Denmark follows the 'loser pays' principle. The court decides how much the losing party has to pay based on, inter alia, time used and the legal nature of the issues. It is not possible to enter into a contingency fee or risk agreements. Third-party funding is not forbidden but does not seem widespread in practice.

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