On January 1st, 2003, the Group Proceedings Act 2002 (GRL, the Act) came into force in Sweden, making it the first country outside the Anglo-American legal sphere to introduce legislation in the field of collective redress. Introduced spontaneously, the legislation was not in response to a need that had crystallized in special court cases. Further, there are other types of collective redress mechanisms in Swedish domestic law. Beyond the GRL, which is an in-court procedure, there is also the possibility of initiating group proceedings at the National Board for Consumer Disputes (Allmänna Reklamationsnämnden (ARN)). This is a public body for out-of-court dispute settlement specialized in business on consumer matters. The legal basis of such a group action is § 3 of the Standing Instruction for this Board (Regulation 2007:1041 with instructions for the Board for Consumer Complaints). Such group actions can be filed by the Swedish Consumer Ombudsman, by associations of consumers in the second instance or by wage-earners before the ARN. There is also a possibility for the Swedish Consumer Ombudsman to act as a representative of individual consumers in certain disputes before ordinary courts in proceedings between a consumer and a business. The legal basis for this is Act (2001:1211).
Focusing on the GRL, it provides the possibility of binding together a plurality of claims against the same defendant into one group action, which are based on the same or similar circumstances (commonality) and when the claims cannot be equally well pursued through other procedural forms (superiority). It provides three ways in which group actions can be instituted: 1.) an individual member of a group who is a natural person or a legal entity (private group action); 2.) by an association of consumers or wage-earners (organisational group action), or; 3.) by a designated public authority (public group action). With regard to consumer disputes, the Government has designated the Consumer Ombudsman (KO) as the appropriate public authority.
Regarding its scope of application, it is important to highlight that this Act is not confined to infringements of consumer and environmental law but applies to all kinds of disputes where a group action appears appropriate.
In terms of legal standing, and as mentioned above, group actions can be instituted by: 1) an individual member of a group who is a natural person or a legal entity (private group action); 2) by an association of consumers or wage-earners (organisational group action), or; 3) by a designated public authority (public group action). With regard to consumer disputes, the Government has designated the Consumer Ombudsman (KO) as the appropriate public authority. A group action can only be initiated by a claimant on behalf of a group of members, so a claimant who directs his or her action against a group of defendants cannot pursue a group action. In this sense, it is only the group representative who is the claimant and therefore a party to the proceeding. The group members are not parties to the trial and need not be actively involved. A ruling in the process however, is binding both for and against all members of the group (known as the 'opt-in system'). It is not possible for any member of the group to open for example a governmental class action after a private class action. It does not matter that the members are not parties to the trial.
A group action is subject to the general rules of the Code of Judicial Procedure (RB) concerning civil disputes, unless otherwise provided in Section 2 of the Act. Accordingly, the same general procedural conditions apply as they do in ordinary cases, i.e. under Chap. 34, Section 1 of RB, the court is required ex officio to examine its competence or the group action must be referred to a claim admissible by a common court. In addition to this general procedural requirements the following special conditions must be met for lodging a group action (Section 8 of the GRL): 1) the action is based on factual circumstances that are common or similar to the group, and 2) a group action does not seen inappropriate due to considerable divergences in the claims, and 3) the majority of the claims cannot be equally well conducted in separate proceedings of the group members, and 4) the group is well defined in terms of the value of the claims, delimitation, etc., and 5) the plaintiff is well-suited to represent the group.
Further, all civil claims amenable to out-of-court settlement can be brought in group proceedings provided that the other prerequisites of the GRL are met.
The GRL does not establish any limitation as to the nationality of the group members, so there are no restrictions as to the participation of foreign plaintiffs.
Regarding the set of remedies available, the GRL does not set any limitation on the civil law remedies that can be obtained. Typically the main remedy that would be relevant in group actions would be compensation for damages, on the basis of contractual or non-contractual liability. A group action can also be employed for getting a court order obliging the defendant to perform an act (eg terminate a contract).
For group actions, the ordinary rules on litigation costs (namely the losing party pays) apply in principle. The claimant in a group action bears the litigation costs (including those of the defendant) if he or she loses the case. Members of the group are in principle not liable for the litigation costs. According to section 38- 42 GRL, it is possible to enter into a risk agreement. This is an agreement between the claimant in a group action and the attorney, whereby they agree that the attorney´s remuneration depends if the case is lost or won. This agreement is valid if it is inter alia deemed fair.
In addition, reform proposals were discussed recently. In 2007, the Ministry of Justice appointed a special investigator to evaluate the Act (Justitiedepartementets PM 2007-06-14. Utvärdering av lagen om grupprättegång, Ju 2007/5800/P). The investigator was to consider whether the Act had achieved its basic purposes, such as strengthening the collective redress available to individuals, and with that in mind, to consider whether the provisions enacted for the specific purpose of safeguarding the interests of the respondent could be considered as being appropriate. The remit further included investigating the effects of the introduction of group actions on small firms and other undertakings, eg regarding the risk of abuse which had been feared at the time of the passing of the Act. The report revealed, inter alia, that the fears expressed on behalf of business undertakings had been overstated because no information had emerged from events that suggested otherwise. The Act had not been abused neither as a means of extorting oppressive settlements out of court nor was there anything to suggest that the Act had impacted adversely on the willingness to invest in Sweden. Instead, the Act could be taken to have augmented the accessibility of justice to the individual, in that if a number of actions were pending, it would have been unlikely that the individual would have pressed ahead with his or her action alone.
Regarding the European discussion on consumer collective redress, it can be said that the Swedish Government has generally been in favour of measures at the European level aimed at inspiring consumer confidence and activity in the internal market. With regard to the more specific standpoint concerning the proposals on collective redress for consumers from the European Commission, the Swedish government has not been prepared to advocate further rules on the matter. The Swedish view is that the question of collective redress, at all events for the time being, is best regulated at a national level.
1. See Lindblom, P H, Grupptalan i Sverige, 2008, p 129-130.
BIICL has recently worked with the German public body, the Gesellschaft fur internationale Zusammenarbeit (GIZ) on a collective redress project....