The latest session of the Pérez-Llorca/IE Chair on Commercial Law sought to provide a glimpse of how the Spanish legislator will implement the obligations imposed by the European Union on collective representation in defence of the rights of consumers and users through the transposition of Directive 2020/1828 of 25 November 2020.
The seminar, moderated by Silvia de Paz, senior associate at Pérez-Llorca, was attended by Julio Banacloche, lecturer in Procedural Law at the Universidad Complutense de Madrid; José María Campos, Legal Director of the Spanish Business Organisation Confederation (CEOE); and Ignacio Santabaya, Litigation and Arbitration partner at Pérez-Llorca.
Silvia de Paz opened the conference by discussing the difficulties of the current system for collective actions in Spain and explaining that “the main objective of Directive 2020/1828 is that all Member States of the European Union have a minimally harmonised procedural system of collective representation actions, in defence of consumers’ and users’ rights. In Spain, the legislator has a transposition deadline of 25 December 2022”.
The first block of discussion revolved around the way in which the Directive should be transposed into our procedural system. At this point, Julio Banacloche, member of a working group of the General Codification Commission and who produced a report, alongside a group of experts, on the transposition of the Directive in Spain, pointed out that “the Directive leaves Member States with freedom of choice over many controversial issues, in order not to hinder the model of collective actions that many countries of the European Union have already implemented”. Thus, the Directive has preferred to ensure common points of consumer protection between Member States and to allow cross-border actions, without necessarily seeking the adoption of a single model for all Member States. For Spain, Banacloche indicated that, in his opinion, it would be best to introduce a special process in the Civil Procedure Act, given the difficulties that would arise from trying to transpose the Directive by means of specific amendments to the Act.
The two alternative models of intervention and involvement of consumers in collective actions were then discussed, with Member States having to choose between the opt-in model, according to which consumers must expressly or tacitly express their willingness to be bound by the collective action; and the opt-out model, which will mean that consumers affected by the same facts will be bound by the collective proceedings, unless they expressly decide to opt out of them. In this respect, José María Campos, who participated, through the employers’ organisation BusinessEurope, in the negotiation of the Directive in the European Parliament and, after explaining how the US class action process works, observed that “both models have their advantages and disadvantages. In actions for damages, the opt-in system is reasonable for large claims or where it is easy to identify the consumers concerned; the opt-out system, on the other hand, is appropriate for small claims or where it is not so easy to identify the consumers concerned”. What is important, in his view, is that the system chosen is consistent with our civil law and that it correctly combines the chosen model with procedural tools that facilitate the verification of the consumers concerned.
The speakers then introduced the perspectives on the forthcoming collective action system for Spain. To this end, Ignacio Santabaya explained how, in his opinion, “the effective functioning in Spain of the forthcoming collective action system will depend on the incentives offered to litigants”. The Pérez-Llorca partner considered that it is essential to provide incentives to entities qualified to litigate, with a well-articulated process and with courts properly prepared to handle complex issues.
In conclusion, Silvia de Paz opened the floor to a debate between the three speakers in relation to certain procedural tools (control of the qualified entities’ standing, limits on the financing of actions by third parties and the possibilities of producing documentary evidence), followed by a discussion in which more specific questions were raised, such as the consideration of consumers for the purposes of the Directive; the judicial competence of the courts to deal with this matter; the intervention in the market of litigation funds; and the models of collective litigation in other European Union countries, which can, due to their regulations, attract cross-border actions.