The class-action paradigm shift is here. The process of transposing the European Directive on representative actions gets underway

10 January 2023

A radical change in the dynamics and functioning of class actions – which will see them renamed “representative actions” – is on the horizon. Injunctive and redress actions will be able to be brought for any infringing conduct that harms the collective interests of consumers. A special process has been created for redress actions, which involves a prior certification phase that aims to verify whether the action is viable (the criteria analysed are homogeneity, standing, absence of procedural obstacles, and that it is not manifestly unfounded) and determine the conduct and consumers affected by the action’s outcome. The general rule is that representative actions will affect all consumers, unless they expressly opt out of the class action. If all the consumers affected cannot be determined, a lump sum will be ordered to be paid that, at the enforcement stage, a liquidator will distribute to consumers who can prove that they qualify as beneficiaries. Other important novelties include the redress settlements, which – after court approval – will be binding on consumers who do not express their wish to withdraw from the agreement. In short, this future regulation aims to foment the use of representative actions and ensure that consumers can benefit from them when they are upheld.