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Lithuania

Author: Vytautas Mizaras

IV. Sectoral Collective Redress Mechanisms

A. Competition sector

1. Scope/ Type

The Law on Competition establishes two instruments:

- Injunctive actions in the field of unfair competition (Article 16 of the Law on Competition). This mechanism shall be regarded as an action for the protection of public interest.

- Compensatory and injunctive claims for infringement of competition law was introduced into Lithuanian legal system by transposition of the Damages Directive (infringement of competition law is described as in the Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union Text with EEA relevance (hereinafter -the Damages Directive)) (Articles 43-53 of the Law on Competition). The new regulation came into force from 1 February, 2017. According to the specific rules of the Law on Competition, the court is encouraged to apply the joining of cases mechanism. It does not mean that group action and joinder of claims mechanisms could not be apply. These instruments would be applied according to the rules indicated in the CPC.

2. Procedural Framework

a. Competent Court

For the injunctive actions -a district court would have the jurisdiction to hear the case.

For the compensatory and injunctive actions claims in infringement of competition law -special jurisdiction rule is established in the Law on Competition: Vilnius regional court has jurisdiction to hear the case.

b. Standing

For the injunctive actions -the actions can be brought by organizations representing the interests of undertakings or consumer.

For the compensatory and injunctive actions claims in infringement of competition law -no specific rules on locus standi (with exception of the rules indicated in the Damages Directive concerning indirect purchasers)

c. Availability of Cross Border collective redress

No specific rules are established (with exception of the rules related to the decisions adopted in another Member States).

d. Opt In/ Opt Out

General rules are applied.

e. Main procedural rules

The general rules indicated in the CPC are applied. Several peculiarities are indicated in the Law on Competition. Firstly, follow -on rule is established as required by the Damage Directive (Article 9 of the Damage Directive). Secondly, the court obligation to announce about the initiation of the case is indicated in the law. The announcement should be made after acceptance of the claim on the internet site of the court. The aim of the announcement is to create the conditions for the persons join the case. Thirdly, there is indicated the obligation of the court to join the cases if it has been emerged that more claims are submitted to the court for the same defendant.

3. Available Remedies

As it was mentioned compensatory claims and injunctive claims are allowed. In the field of unfair competition three types of remedies are allowed. Firstly, termination of the illegal actions, secondly, imposition of an obligation to make one or several statements of specific content and form, refuting the previously submitted incorrect information or providing explanations as to the identity of the undertaking or its goods and thirdly, seizure or destruction of the goods, their packaging or other means directly related to unfair competition, unless the infringements can be eliminated otherwise. In case of infringement of competition law, termination of illegal actions and claim for damages are possible.

No specific rules indicated concerning allocation of damages between claimants for compensatory claims and there is no necessity for such rules.

As established by the Damage Directive, there is no availability of punitive or extra-compensatory damages. The same idea is established in Lithuania law.

The rules on calculation and proving of damages, limitation period correspond to the provisions of the Damage Directive. As mentioned above, follow-on rule is established in relation to compensatory claim as required by the Damage Directive.

4. Costs

General rules are applied.

5. Lawyers' Fees

General rules are applied.

6. Funding

General rules are applied.

7. Enforcement of collective actions/settlements

General rules are applied.

8. Number and types of cases brought/pending

The injunction mechanism has not been used in practice (where locus standi belongs to associations). Due to novelty of the regulation no cases existed in the field of compensatory claims.

B. Consumer protection sector

1. Scope/ Type

Lithuanian law providesfor two consumer collective redress mechanisms:

- the general protection of public interest of consumers may be applied when seeking certain remedies -recognition or change of legal relationship, prohibition (termination) of certain actions, omissions of a seller or service provider whereby legitimate common interests of consumers are being infringed upon and which are unfair from the consumers' viewpoint, activities not in compliance with fair business practices, or are in conflict with the provisions of the Lithuanian Civil Code, infringements of the Law on Consumer Protection or any other legislative acts (Chapter 7 of the Law on Consumer Protection);

- the State Consumer Rights Protection Authority controls standard terms and conditions contracts law and therefore may contest unfair terms and conditions of consumer contracts.

It should be noted that these mechanisms cannot be considered a group action, instead it may be regarded as an action for the protection of public interest. The group action, as it was mentioned, is available pursuant to general rules of the CPC.

Only injunctive claims can be submitted to the court within the framework of mentioned mechanisms.

2. Procedural Framework

a. Competent Court

General rules are applied.

b. Standing

Locus standi belongs to consumer associations and the State Consumer Rights Protection Authority. The law establishes certain requirements for the consumer associations. Pursuant the Article 31 of the Law on Consumer Protection consumer associations shall have the right to protect public interests of consumers, provided such associations meet the following conditions: 1) are registered in the Register of Legal Entities; 2) the purpose of operations, indicated in the founding documents, is representation and protection of consumer rights and lawful interests; 3) at least 20 members comprise an association. In the event that the members of an association are other consumer associations, the total number of the members of these associations shall be no less than 20; 4) are independent of business interests and other interests which are related to the protection of consumer rights. When filing a claim or a complaint for the protection of public interests of consumers, a consumer association shall present to the court the evidences that it corresponds to the mentioned conditions.

c. Availability of Cross Border collective redress

Foreign plaintiffs are able to defend the public interest of consumers using this mechanism. Given that natural persons are altogether prohibited from bringing this action, only certain foreign legal persons are allowed. The institutions or organizations of the member states of the European Union which are included by the European Commission in the list provided for by Directive 98/27/EC of the European Parliament and of the Council on injunctions for the protection of consumers' interests and published in the Official Journal of the European Communities, have the right to bring an action in the courts of the Republic of Lithuania for an injunction to cease activities of the sellers (suppliers) of goods or services which infringe public interests. It must be noted that these foreign plaintiffs have to meet certain criteria. Firstly, they may act only when the activities of the sellers (suppliers) of goods and services, functioning in Lithuania, infringe the legal acts of the European Union, the list of which shall be approved by the Minister of Justice of the Republic of Lithuania. Secondly, they have an obligation to consult in writing with the State Consumer Rights Protection Authority. Furthermore, foreign plaintiffs likewise have to apply to the seller or service provider before bringing the claim before the court.

d. Opt In/ Opt Out

General rules are applied.

e. Main procedural rules

Two stages may be identified. Firstly, obligatory out-of-court dispute resolution. Potential plaintiffs must conduct obligatory out-of-court negotiations. Upon having established that the public interests of consumers were infringed, plaintiffs must apply to the seller or service supplier and propose that the seller or service supplier cease the infringement of the public interests of consumers within 14 days from the receipt of the proposal. If the infringement of the public interests of consumers does not stop, plaintiffs have a right to file a claim or complaint to the court in order to defend the mentioned interests.

The Law on Consumer Protection states that the plaintiff has an obligation to apply to the seller or service provider before bringing the claim before the court. Additionally, consumer associations and other state and municipal institutions and legal entities defending the public interests of consumers have an obligation, not later than within 5 working days from acceptance of a claim or petition (complaint), to notify the State Consumer Rights Protection Authority about this.

The Law on Consumer Protection does not provide any additional rules regarding evidence or discovery. Consequently, general rules of procedure apply.

3. Available Remedies

As it was mentioned, pursuant to the Law on Consumer Protection this mechanism is designed only for injunctive claims. There are no specific rule concerning follow -on actions and limitation periods in these claims. Several types of remedies are available: (i) plaintiffs may seek recognition or change of legal relationship, prohibition (termination) of certain actions, or omissions of a seller or service provider; (ii) as to the unfair terms and conditions of consumer contracts, the State Consumer Rights Protection Authority may seek invalidation or amendment of unfair terms and condition.

There is no clear rule on res judicata effect. The doctrine expressed the position that if the court satisfies the claim, the res judicata effect of the judgement applies to all the consumers having clauses in their contracts that have been declared void.

Pursuant to the general rules of the CPC the facts settled in the judgement become prejudicial facts and cannot be contested -therefore persons with the same or very similar factual circumstances may benefit from the decision of the court. As to the unfair terms and conditions of consumer contracts, though the court declares the terms and conditions of the standard consumer contract unfair, due to the contractual nature of the standard consumer contract, it has to be amended individually. For example, a consumer may demand an amendment of the contract with reference to the judgement of the court declaring the particular terms and conditions unfair.

4. Costs

General rules are applied.

5. Lawyers' Fees

General rules are applied.

6. Funding

There are no specific rules on this matter.

7. Enforcement of collective actions/settlements

There are no specific rules on this matter.

8. Number and types of cases brought/pending

Since 2004-04-30, when the amendment of Law on Consumer Protection introducing the protection of public interest of consumers came into effect, several actions were brought to court. According to the publicly available information only 12 cases are accounted. However, it should be noted that the State Consumer Rights Protection Authority in its reports on its activity from 2007 till 2016 indicates 37 cases initiated by the State Consumer Rights Protection Authority. Such difference in number of cases might be due to the reason that the decisions of district courts are not publicly available. Moreover, it should be noted, that the State Consumer Rights Protection Authority does not indicate information about the cases initiated by consumer associations.

However, it should be noted that regarding the unfair terms and conditions of consumer contracts, the State Consumer Rights Protection Authority has competence to control the unfair terms in administrative way. Therefore, it actively issues decisions that certain consumer contracts have unfair terms and conditions.

The court practice shows that the issues existed by interpreting the public interests in the consumer area and what the status of the consumers in such case should be. Moreover, it is obvious that there is no clear understanding on the delineation between the abstract control of unfair terms and individual control.

9. Impact of the Recommendation/Problems and Critiques

Please see comments to General part.

Legal scholars rarely address issues of this mechanism. Even so, this institute lacks legal clarity, which would allow potential plaintiffs to take advantage of it. As it is appeared from the court practice there is no clear understanding how "public interests" should be interpreted, what is the abstract control of unfair contract terms and whether all consumers in the status of third party should be involved in the case. It could be additionally noticed that the consumer associations are not sufficiently encouraged to initiate actions for the protection of consumer interests.

C. Environmental sector

1. Scope/ Type

This mechanism may be used only for the protection of public interest in the field of the environment and environmental protection as well as utilization of natural resources (Article 7 of the Law on Environmental Protection).

2. Procedural Framework

a. Competent Court

Regional Administrative Courts would be competent to hear the case (Article 18 of the Law on Administrative Proceedings). If the requirements in the case involve both requirements of administrative and civil nature and the civil nature prevail, the case might be examined in the general competence courts pursuant the rules established in the CPC. In that case the claim is filed according to Article 49 of the CPC.

b. Standing

Proceedings may only be brought by the public concerned. Associations and other public legal persons (with the exception of the legal persons established by the State or a municipality or institutions thereof) established in accordance with the procedure laid down by law and promoting environmental protection shall in any case be held as the public concerned. Additionally, according to the practice of Lithuanian administrative courts, associations or other public legal persons must have been established before the adoption of decisions, acts or omissions that are being contested.

c. Availability of Cross Border collective redress

d. Opt In/ Opt Out

The law does not specify whether this mechanism is based on the opt-in or opt-out procedure, however general rules of administrative proceedings apply. It should be noted, that the fact that the court decides on the persons that did not participate in the proceedings, would be grounds for the revision of the judgement. Furthermore, due to the nature of the remedies that can be sought, there are no major problems regarding res judicata.

e. Main procedural rules

The Law on Environmental Protection does not provide for any additional procedural rules, consequently general rules of administrative proceedings apply.

Given that there is no specific regulation, the general three-stage administrative proceedings procedure is applied. Firstly, there is the opening of proceedings, during which the court inter alia checks the general content requirements of procedural documents. Secondly, the preparation of proceedings, during which the court inter alia sends the copy of the claim to the other parties and sets the term for the statement of defence. Thirdly, the proceedings on the merits, during which the court examines the evidence and issues a judgment.

Given that there is no specific regulation, general evidence or discovery rules of the Law on Administrative Proceedings apply.

3. Available Remedies

There are several remedies that the public concerned may seek. Firstly, it may contest the substantive or procedural lawfulness of decisions, acts or omissions in the field of the environment, environmental protection and utilization of natural resources. Secondly, the public concerned may seek an injunction of harmful effects on the environment of the economic operators. Thirdly, to file, in accordance with the procedure laid down by law, a complaint demanding to take appropriate action to prevent or minimize environmental damage or restore the environment to its baseline condition and demanding to punish the persons guilty of causing a harmful effect to the environment and the officials whose decisions or acts (including omissions) has violated the rights of citizens, the public concerned, other legal and natural persons or the interests protected under the law. Lastly, to appeal to the court where it believes that its application, filed in the accordance with the procedure laid down by the legal acts regulating the right to obtain information on the environment has been; unlawfully dismissed, provided with a partially or completely inappropriate response, or has not been given proper regard in compliance with the legal acts regulating the right to obtain information on the environment.

4. Costs

General rules of costs are applied. The Law on Administrative Proceedings states that litigation expenses consist of the official fee, other expenses related with hearing of the case and representation expenses. It should be noted, that reimbursement of representation expenses is settled in accordance with the CPC. Moreover, regarding remuneration of litigation costs, the party for which the judgement has been rendered is entitled to the payment by the other party of the costs incurred by it. Attention should be drawn to the fact that the sum awarded would be proportionate to the claims met. Furthermore, neither the Law on Administrative Proceedings nor the CPC supplies any provisions regarding the funding of this action.

5. Lawyers' Fees

General rules are applied.

6. Funding

General rules are applied.

7. Enforcement of collective actions/settlements

General rules are applied.

8. Number and types of cases brought/pending

Only 11 claims were filed to the courts. The main issues were considered in the court practice were (i) whether the association has a locus standi. The courts maintains a narrow interpretation of public interests taking into account that associations has a right to submit the claim only inthe area of environmental protection and was not inclined to expand this area. The court has a notion that the area of public interests are described by the law, the competence stemmed from the law, therefore the competence area of the subject should be interpreted in the narrow way; (ii) how the term for the submission of complaint for the protection of public interests should be calculated. The interpretation that the calculation of term for submission of the complaint for the protection of public interests should be calculated from a date either when the claimant received sufficient data/information about the breach of public interests or when the data/information about the breach of public interests ought to be or might be collected, has prevailed. However, the court practice where the court decided that the term should be calculated taking into account the knowledge of the persons who is protected but not the knowledge of the person who submits the claim, existed as well.

9. Impact of the Recommendation/Problems and Critiques

Please see General Part.

1. http://www.vvtat.lt/index.php?2267040817

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