Members of the Group
Decision and Payment
Although class actions were included in the national Constitution adopted in 1991, they are more specifically regulated by Law 472/98. The first decisions on class actions are only just being issued by the courts. As expected, financial institutions, government entities and multinational companies are the key targets. Given the problems and inconsistencies in the text of the legislation, the development of the jurisprudence will be essential to create a coordinated body of law.
'Class actions' are defined by Article 46 of Law 472/98 as those actions initiated by a group of persons (individuals or entities) who have experienced uniform conditions with respect to the same matter, which has subsequently generated individual damage for each individual/entity. The uniform conditions must also be present with respect to the elements that create liability.
Class actions are exclusively designed to obtain recognition and payment for damage caused. Therefore, they cannot be initiated to prevent the occurrence of damage or to avoid contingencies.
The civil courts have jurisdiction for class actions. This is with the exception of claims originating from the activities of public entities or private individuals performing public functions, which shall be heard by the administrative courts.
The law provides for a relatively fast process for hearing claims. It seems advisable that those large companies that provide products or services, and that may be exposed to these types of claim, be prepared. This is especially given the limited amount of time that the defendant is given to reply, propose defences and submit evidence. Preparation should include having a set of documents and a list of potential witnesses (including experts) prepared for the defence of potential claims.
The claim must meet the procedural requirements that apply to any claim. The plaintiffs must also provide (i) the names of the individuals that form the group (or describe the criteria used to identify such a group), and (ii) an estimate of the amount of damages claimed.
The form of service of process, when the defendant is an entity as opposed to an individual, may generate practical difficulties for the defendant. The general rule of procedure in Colombia is that defendants must be personally served process. If personal service of process is not possible, the law provides for a series of publications to be made. After a period of between 30 and 45 working days, the defendant is considered to have been legally served process. However, in the case of class actions, if the manager or legal representative of the defendant entity is not personally served process, the court official can validly serve process by delivering a copy of the claim to any employee present at the address of the defendant.
The defendant is allowed to put forward all procedural and merit-based defences that are available under any ordinary proceeding. Likewise, as in any other proceeding, the court must call the parties for a mandatory settlement hearing, during which the judge will ask the parties to attempt to settle the matter.
If settlement is not reached, the evidence requested by the parties will be gathered over a period of 20 days. This term may be extended for a further 20 days. At the expiration of this term, the parties will be given five days to present their final allegations and the judge will then have 20 days to issue a decsion. The decision of the court may be appealed.
Law 472/98 requires that a group must be made up of at least 20 persons. The law does not expressly indicate whether this minimum number is (i) the number of persons necessary to file the claim and participate in the proceedings, or (ii) the number of persons that have suffered damage, regardless of how many act as plaintiff. In the first instance, if the number of plaintiffs is less than 20 or falls below 20 during the course of the proceedings, the class action would be terminated and individual actions would have to follow. In the second case, it would be necessary to prove that at least 20 persons have suffered damage (regardless of the number of plaintiffs). It is felt that the second interpretation more closely follows the spirit and intent of the law.
The court will serve process to all potential members of a group by way of mass communication. At any time before the judge orders the gathering of evidence, any individual who is in the same situation as the plaintiffs may become a party to the proceedings by submitting a request to the court. Those who are in the same situation but who do not become party to the proceedings may benefit from the final decision of the court by filing a request within 20 days of the date of the decision's publication.
A member of the group will not benefit from the effects of the court decision if the member (i) expressly asks to be excluded from the group, or (ii) proves to the court that his or her interests are not being adequately represented or that there were errors in the service of process. The individual may then attempt an individual claim for damages.
In the final decision the judge will fix the amount of damages, taking into consideration the potential number of group members. The judge may create categories and sub-categories of beneficiaries for the purposes of payment. The judge will also indicate the requirements that members of the group who are not present at the proceedings must meet to collect payment.
The indemnity funds will be delivered to and held by the Fund for the Defence of Collective Rights and Interests. The fund will make the payments to those beneficiaries that (i) submit a request for payment within the term provided for by law, and (ii) meet the requirements of the court decision.
The losing party will pay expenses and attorneys costs. If the plaintiffs succeed in their claim, the attorney representing the plaintiffs will be entitled to a payment by the defendant of an amount equal to 10% of the indemnity payable to those members of the group who were not a party to the proceedings.
For further information on this topic please contact Eduardo Zuleta at Zuleta, Garrido, Araque & Jaramillo Abogados by telephone (+571 310 6614) or by fax (+571 310 6286) or by e-mail ([email protected]).
The materials contained on this web site are for general information purposes only and are subject to the disclaimer.