This headline summarizes the main features of the preliminary draft bill extending the access to collective claims under Belgian law to SMEs.
Please note that this headline is provided for general information purposes and cannot be considered as legal advice. Should you have any questions or wish for legal advice in this respect, please feel free to contact us at any time.
1. BACKGROUND AND STATUS
The collective action was introduced into Belgian law by an Act of 28 March 2014, following the EU Recommendation on collective redress mechanisms dated 11 June 2013. To date, only groups of consumers (represented by a group representative) are allowed to bring collective claims for damages before the Belgian courts in case of collective damage.
Following the evaluation of the Act on the one hand and the recent Fipronil crisis in the EU on the other hand, the Belgian government decided to extend the scope of the collective action under Belgian law.
Accordingly, on September 1st, 2017 the Belgian Council of Ministers approved a preliminary draft bill extending the access to collective actions to small and medium-sized enterprises (SMEs). The draft bill is currently submitted to the Council of State to obtain its advice on the draft.
2. WHO CAN ACT?
A group of (Belgian or foreign) SMEs represented by a group representative acting on behalf of the group.
Within this context, SMEs are defined – in accordance with the EU Recommendation on SMEs - as enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, or an annual balance sheet total not exceeding EUR 43 million.
The following entities can act as group representative:
1. an inter-professional organisation having legal personality and defending the interests of SMEs, that is either represented in the High Council for the Self-employed and the SME, or authorized by the Minister of Economy;
2. an association that is authorized by the Minister of Economy, which does not pursue a long-term economic purpose, and which has existed for more than 3 years; or
3. a representative entity designated for this purpose by a Member State of the EU or EEA, that meets the requirements set out in paragraph 4 of the Commission Recommendation 2013/396/EU on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under EU law. Commercial companies, trade unions and law firms are therefore excluded as they do not meet these criteria.
3. FOR WHICH MATTERS?
As was previously the case, collective actions can only be brought for damages based on alleged violations by an enterprise of its contractual obligations or of specifically enumerated Belgian and European Rules.
This list includes provisions included in:
- the sections of the Belgian Code of Economic Law relating to competition law, price developments, market practices, consumer protection, payment and credit services, safety of products and services, intellectual property and electronic economy; or
- special legislations regarding privacy protection, electronic signatures, insurance, health, professional liability, banking and finance, tour operators, passenger transport, energy, product liability, among others.
- It is important to note that on 6 June 2017, the scope of the class action regime was extended to include infringements of EU competition law (articles 101 and 102 TFEU including the ban on cartels and abuses of dominant positions).
It can be expected that most collective actions brought by SMEs will be based on violations of (Belgian/EU) competition law or unfair market practices.
4. OPT-IN OR OPT-OUT
The group of SMEs will be composed pursuant to the same rules applicable to consumers.
The court will decide between the opt-in procedure, whereby SMEs specifically opting into the action can benefit from it, or the opt-out procedure, whereby all SMEs affected by the breach benefit from the action unless they specifically opt out of the group. That said, the opt-in procedure is compulsory for SMEs who do not have their principal offices in Belgium.
5. ENTRY INTO FORCE
The date of the entry into force of the extension is set on the date of the publication of the act in the Belgian Official Gazette, which is scheduled on 1 January 2018. The extension will be immediately applicable to all cases introduced after the date of the entry into force, irrespective of whether the alleged breach occurred before or after that date.