In 2014 Belgium introduced a limited form of class action into its legal system and will now have to adjust it further to meet EU requirements. Meanwhile the number of entities empowered to introduce such a type of action has been steadily increasing. The rights that these entities safeguard and may base their claims on might confront your business with a class action.
The Belgian class action
A class action seeks to enable consumers and SMEs the right to introduce a collective claim in reparation of their individual loss that results from a common cause.
The three admissibility conditions for introducing a class action
The Brussels courts admit a collective claim provided that three conditions are met:
- The loss results from a contractual violation or a breach of specific legislation.The procedural law contains a limited list of legal bases for a collective claim, which include: Belgian and EU material laws regarding the protection of competition, consumer protection and market practices, payment and credit services, intellectual property rights, the EU data protection regulation (GDPR), safety of products (e.g. medical devices) and services.
- The collective action is more effective than standard (individual) legal proceedings.The courts may, for instance, consider: the size of the consumer group, the individual identifiable losses, the extent of the damages (i.e. the smaller the individual loss, the bigger the chances are that the collective action is more effective than standard proceedings).
- A legally-recognised entity must file the claim on behalf of the group of claimants.
Group representative entities require recognition
An entity may be recognised as a group representative for filing a collective claim if:
- it is an association with legal personality representing consumers’ rights and is represented in the Special Advisory Committee on Consumption or is recognised by the competent Minister; or
- it is a governmentally-recognised non-profit organisation whose corporate purpose is directly-linked to the collective loss suffered by the group of consumers or SMEs. Such an organisation should have had legal personality for at least three years when filing the collective claim; or
- it is an autonomous public service representing consumers; or
- it is a group representative of consumers or SMEs recognised by a Member State of the European Union or the European Economic Area; or
- it is an interprofessional organisation and a member of the High Council for independent workers and SMEs or an entity with legal personality recognised by the competent Minister.
Who is recognised?
To date, the following entities have, amongst others, been recognised as group representatives that are allowed to file a class action:
- Test-Achats/Test-Aankoop is an organisation focusing on consumer protection. It filed class actions against Volkswagen concerning the consequences of the Dieselgate matter in Belgium as well as against Ryanair following important flight delays and cancellations.
- NOYB (“None Of Your Business”) is an Austrian nonprofit organisation active in the protection of consumers against violations of the GDPR. It has filed proceedings in other countries against WhatsApp and Facebook.
- VBO/FEB (“Association of Belgian businesses”) is the federation of Belgian enterprises. It is recognised to represent SMEs in collective claims.
- FVF (“Federation for insurance and financial intermediaries”) represents SMEs.
- BZB-Fedafin is an association of self-employed financial intermediaries (SMEs).
- Agoria is an association representing SMEs active in the technology industry.
- Federal mediation services (“Consumentenombudsdienst”/“Service de Médiation pour le consommateur”) may also introduce a collective claim as an autonomous public service. Following a request by the mediation services for energy, the federal mediation service has introduced a collective claim against important energy suppliers who have continued to charge consumers after the termination of their contract.
EU harmonisation requires adjustments
The European parliament recently endorsed the proposal for a Directive on representative actions for the protection of consumers’ collective interests. The new Directive will require Member States to (i) adopt class action legislation and (ii) harmonise their legislation to meet identical requirements. Belgium will now have to adjust its legislation, for example, where the Directive requires a regular assessment of qualified entities and where it addresses third party funding.