Ready for class actions?

Will the collective claim be able to win the enthusiasm of the citizens?

On 5 June 2013 two law propositions have been submitted concerning the procedures on collective claims. The first proposition aims at the implementation of a procedure on collective claims as such in the Belgian legal system. The second proposition provides for the necessary modifications to the judicial Code in order to apply the procedures properly.

On 5 July an identical law project has been approved by the council of Ministers.

These propositions introduce a type of class action in Belgium and will give a large group of individual persons, who have suffered damages as a result of the same facts, access to a judge, trough a representative. In other words, the propositions strive for a simplified way to obtain compensation for mass damages.

In the explanatory memorandum of the propositions, reference is made tot damages suffered in domains such as health (cancer by asbestos) or accidents (gas explosions or train accidents). With these propositions, Belgium follows in the footsteps of other European countries, which have already taken measures in class action procedures.

The propositions provide two procedures. The first procedure concerns the settlement of collective claims. The settlement has as its object the recovery of the mass damages and is entered into between the debtor(s) of the recovery and the representative of the group. The second procedure concerns the claim in collective damages. This means the judicial procedure, which extends to the recovery and is subject to an admissibility decision of the judge. It should be noted that only the commercial court and the court of first instance are competent to hear the case.

The settlement of collective claims aims at an amicable settlement outside the courtrooms. Afterwards the court will declare the settlement to be binding for all members of the group trough homologation of the agreement. Subsequently, the settlement will be published, trough announcements via different media channels in order to allow the victims to express their consent whether or not they want to be part of the group.

On the other hand, it is possible to start the judicial procedure immediately. The claim in collective damages knows two stages. At first, the court needs to rule on the admissibility of the claim. This implies that the court will examine whether the case meets the legal requirements. Later on, debates will be held with regard to the grounds of the claim. However, after the admissibility decision, parties have the possibility to negotiate. If they are successful and an agreement is reached, the claim will be reverted to the procedure concerning the settlement on collective damages. If not, the claim will be continued.

Both in case of a settlement as in case of a judgment, the court will remain active until the recovery of the damages, due to the members of the group, has been carried out entirely. Hence, the court will monitor that every victim will be compensated.

In order for the victim to be part of the group, the legislator has provided two systems, namely opt-in and opt-out. Opt-in means that everyone who expresses its consent to be part of the group will be part of the group. Opt-out on the other hand implies that everyone who suffered damages is part of the group, unless those who expressed their will otherwise. In the procedures, which are now ahead, opt-out is applied on the victims who have their normal residence in Belgium, while opt-in is used for the victims who have their normal residence outside of Belgium.

Furthermore, the representative of the group deserves special attention. The law propositions provide that the group will be represented by one representative. Every association or non-profit, who’s activities relate to collective damages, can undertake the role as representative of the group. It is not required that the representative itself has suffered mass damages.

Consumer organizations are immediately considered to act as a representative. However, the legislator has kept the door open for associations as well. In other words, from the moment two persons form a union, an association is considered to be established, which is capable to represent the group. The capacity of the representative needs to be confirmed by the court. In this regard, the court will examine whether the representative is suited to look after the interests of the group.

Finally, the propositions regulate the individual claims of the victims. More specifically, an individual claim started by a member of the group with the same cause, for the same damages, will not be accepted. Moreover, the victim, who started the individual claim, will be deemed to have opted-out unless he does not renounce his claim.

It is too soon to tell whether these procedures will be applied frequently. In every respect, it simplifies the possibility to obtain recovery in situations where one event cause damages to a large number of people. Fortunately these situations do not occur on a daily basis. The explanatory memorandum refers explicitly to the “DES” case in order to justify the need of these procedures .

From the moment these propositions will be approved, our judicial system will know two new procedures, which might seem practical to use. Nonetheless, the future will show if they will often be used in practice.