“Aiming to improve consumers’ access to justice” by providing them with several safeguards, Law no. 414/2023 on the conduct of representative actions for the protection of consumers’ collective interests (”the Law”) has been published recently in the Official Gazette no. 1158, Part I.
Irina Valeanu and Iunia Radu authored a clear-cut overview of the novelties introduced in the Romanian legislation buy this new legal act.
The Law transposes Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC and introduces a number of notable new elements.
As per the legal provisions of Article 1 of the Law, the normative act "establishes the legal framework for the conduct of representative actions for the protection of the collective interests of consumers in order to ensure a high level of their protection and the proper functioning of the internal market of the European Union".
In essence, the new Law ensures the regulatory framework regarding representative actions brought against domestic and cross-border infringements by professionals in the fields regulated by national and European normative acts included in Annex 1 to the Law ("the List"), infringements that harm or may harm consumers' interests.
The new Law also covers illegal practices of traders who have ceased their activity before the representative action has been brought or when those infringements have ceased before a final judgment has been issued in the case.
Legal standing
Qualified entities designated for this purpose by national authorities or Member States of the European Union, as the case may be, have standing to bring representative actions.
As a rule, according to the legal provisions of the new normative act, in order for an entity to acquire the status of "qualified entity" and, as a result, to be able to stand in such actions, it is necessary to submit a request in this regard and meet the following cumulative conditions:
By way of exception to the need to meet the cumulative criteria listed above, the legal provisions establish that the authorities and bodies providing public services with responsibilities in applying the List are, in turn, each of them, in the field in which it has duties, qualified entities for the purpose of bringing domestic and/or cross-border representative actions.
In turn, these public authorities responsible for the application of the List designate, each of them within their respective areas of competence, qualified entities for the purpose of bringing cross-border representative actions and transmit this information to the Ministry of Economy, Entrepreneurship and Tourism, which is then communicated to the European Commission for public record-keeping purposes.
The authorities and bodies responsible for the application of the List shall assess at least every five years whether the qualified entities they have previously designated for the purpose of bringing representative actions continue to comply with the cumulative criteria imposed by the Law, otherwise, they shall withdraw the status of qualified entity.
The legal provisions expressly state that the legality of such a measure may be challenged by the entity concerned under the provisions of Law no. 554/2004 of administrative disputes.
Legal standing may be challenged, by way of exception, by bringing to the court's attention the circumstance of failure to meet the cumulative conditions imposed by Law in this regard.
Although, usually, the finding of such an irregularity by the court leads to a solution of rejecting the action as being brought by a person without standing, however, in this matter, the express legal provisions establish that the representative action will be rejected as inadmissible, and the decision is subject only to the appeal.
Object of representative actions
By submitting representative actions, qualified entities may request to the court, on behalf of consumers, to be applied several injunctive relief or redress measures either individually, in separate actions or in a single representative action.
Measures to cease a practice or, as the case may be, to prohibit a practice may be obtained, depending on the applicant’s interests, either by means of an application for a preliminary injunction or by an ordinary action based on the provisions of the Code of Civil Procedure.
Unlike injunctive measures, redress measures could be obtained only by the ordinary judicial proceedings which aim for the defendant to be obliged to provide remedies, such as compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid.
Aspects regarding the judicial proceedings
Court stamp duty and trial proceedings. Representative actions for the protection of the collective interests of consumers are exempt from court stamp duty and are judged, unless they are brought by way of a preliminary injunction, according to common law. As regards the injunctive measures sought by such actions, the legal provisions under consideration establish that these judicial proceedings are conducted expeditiously.
Remedies. The decision of the first court of instance is subject to appeal, according to the Law. The second appeal may be formulated and, as a result of such action, the enforcement will be suspended.
Consumer consent. Another particularity introduced by the Law concerns the need to obtain consumers' consent to be represented only in relation to actions having as object the granting of remedies and for the result of those actions to be opposable to them. In this case, such consent is to be requested by the qualified entity within 30 days from the date of the application. The consumers concerned by such actions shall be allowed a time limit for reply of the same duration, but no later than the closing of the hearing on merits of the case.
This consent means that consumers will not be able to bring another legal action against the same professional with the same object, either collectively or individually.
Legal expenses. The Law establishes also the legal regime for the costs incurred by submitting a representative action for remedies. According to the legal provisions, the individual consumers concerned by such action will not be required to pay the legal costs of the proceedings, unless it is proved that the costs were incurred as a result of the individual consumer’s intentional or negligent conduct.
Burden of proof. By way of exception to the rule according to which the burden of proof is on the applicant, the legal provisions establish that, in the case of actions for injunctive measures, the qualified entity, in this case the applicant, is not obliged to prove the actual loss or the real damage suffered by the consumers affected by the infringement, at an individual level, nor intent or negligence on the part of the professional.
Amicable settlement of the dispute. The law establishes the possibility of settling the dispute by concluding a settlement agreement. By way of derogation from the legal provisions of Articles 438-441 of the Code of Civil Procedure, the Law provides that settlements concluded in this matter are subject to review by the court. Thus, taking into account, in particular, the rights and interests of the consumers concerned, the court is to assess whether the parties' agreement is unfair, contrary to mandatory provisions of law or if it includes conditions that cannot be enforced. In such case, the court will order the rejection of the settlement and further settlement of the representative action.
Particularities concerning the limitation of the right to seek injunctive relief
Submitting a representative action for injunctive measures will suspend the statute of limitation periods applicable to the consumers concerned by such action, so that they are not prevented from subsequently bringing an action for redress measures for the alleged infringement.
New aspects regarding the failure to comply with the measures ordered under the Law
The law set out rules on penalties for failure or refusal to comply with the measures ordered by the court decisions. According to the legal provisions the administrative offences and fines established by the Law have a maximum amount of RON 100,000 and shall be determined by the national court by judicial decision which is also subject to appeal.
Application in time of the Law
The legal provisions mentioned above apply to all representative actions submitted starting with the date of entry into force of this Law, namely starting with 23.12.2023.
Therefore, the new regulation supports consumers by providing them with several safeguards for ending the illegal practices increasingly common among professionals and for obtaining compensation for the damages they have suffered. In this way, our hope is that the Law will effectively ensure consumers' access to justice and and effectively serve the protection of the collective interests of consumers, thus the aim pursued by the legislator being achieved.
