An extract from The Class Actions Law Review, 4th Edition
Introduction to the class actions framework
The Norwegian system of civil justice was overhauled at the beginning of this century, and a new Civil Procedure Act was adopted in 17 June 2005 and entered into force 1 January 2008. The overall aim of the reform was to ensure justice with greater efficiency (faster and cheaper).
As part of the reform, class actions were introduced in the Civil Procedure Act. The introduction was made with a particular view to promoting access to justice in cases involving small claims and to obtain more efficient and effective justice in such cases. The US and in particular the Swedish rules served as inspiration for the specific chapter in the Civil Procedure Act devoted to class actions (Chapter 35). In addition to specific rules applicable to class actions, the Civil Procedure Act also allows, to a rather large extent, joinder of parties in ordinary proceedings, provided that certain conditions are fulfilled. Such joinder of cases has a long tradition in Norway.
The enactment of the class action rules was preceded by considerable debate in Norway. Simply put, advocates for consumer interest saw the class action as a vital and important instrument to ensure justice, while advocates for business interest warned against adopting class action rules and feared 'ill-founded blackmailing' lawsuits. However, the rules were adopted unanimously by the Norwegian parliament.
The Civil Procedure Act includes the possibility for both opt-in and opt-out class actions. According to the preparatory works, opt-in class actions are deemed to be the general rule. Which of the two procedures is most suitable for a specific class action is ultimately left to the court to decide.
Class actions may be brought either by a claimant who meets the conditions for becoming a group member, provided that the action is approved, or representative or public bodies, provided that the action falls within their purpose and natural sphere of activity (e.g., the Consumer Council).
Class actions are heard before the ordinary courts (i.e., there are no specialised courts for class actions). Norway has a court system with three tiers. In civil cases, the courts are composed of one legal judge in the court of first instance, three legal judges in the court of appeal and five legal judges in the Supreme Court. In the court of first instance and in the court of appeal, the court may, in an individual case, be strengthened by two technical expert judges. There is no jury in civil cases in Norway.
Class actions have been brought in different areas involving different areas of law (pension law, tax law, consumer law, etc.). However, class actions typically involve some kind of monetary claim (i.e., the class is seeking to obtain damages, repayment or similar compensation from the defendant).
The year in review
In the early years following the entry into force of the class action rules, there was some uncertainty whether class actions would play any significant role in Norway. Furthermore, for some cases that were brought as class actions in this early phase, there seemed to have been no point in applying the class action rules (e.g., the number of claimants was very small and all the (potential) claimants were known at the time the class action was instigated).
Developments over the past few years, however, seem to suggest that the legal environment has matured. In some more recent cases, the courts have also taken a somewhat more sceptical approach to the class action institution and have emphasised that class actions should be reserved for typical class action situations and not cases where there may be a simple joinder of cases. At the same time, a number of class actions have been brought, or discussed, in cases where it was possible that there would be a real benefit from applying the class action rules (see below).
In 2013, three unions brought a class action against several oil and offshore companies alleging that a certain night-time tariff paid to employees should also be included when calculating the basis for employees' pension arrangements. The class action was challenged by the oil and offshore companies but was approved as an opt-out action and had approximately 7,000 members. The class, however, did not succeed in its action, which ultimately was heard before the Supreme Court.
In 2016, the Home Owners Association instigated a class action against the municipality of Oslo alleging that property tax, which was introduced following the municipal election in 2015, was invalid, and that illegally recovered property taxes should be repaid. Approximately 2,000 citizens in Oslo joined the class action, which was handled as an opt-in class action. The right to hear the action as a class action was not challenged by the municipality. The Supreme Court handed down its decision on the merits of the case in 25 June 2019. The Supreme Court concluded that the municipality had a legal basis for the property tax as such, but that the municipality had failed to comply with a specific deadline, which rendered this taxation null and void. Consequently, the group's action was successful and resulted in a partial refund. As a consequence of the ruling, the municipality decided also to make a refund to those citizens that were not part of the class action.
In 2016, the Norwegian Consumer Council instigated a class action against DNB, the largest Norwegian bank, alleging that some 180,000 customers had lost a total of approximately 700 million Norwegian kroner by paying excessive fees for management of their savings. The class action was brought as an opt-out action. The action was approved as a class action by the district court in January 2017, but DNB appealed the case to the court of appeal and argued that the action should not be approved as a class action. The court of appeal dismissed the appeal from DNB and found that the requirements for an opt-out action were met. DNB further appealed the case to the Supreme Court, which dismissed the appeal. Furthermore, all three instances heard the case on the merits and it was concluded with the Supreme Court handing down its decision 27 February 2020. The group was successful and the Supreme Court ruled that the members of the group were entitled to a 'price reduction'. The case is illustrative of the potential benefits of a class action. The average price reduction for each member was about 1,590 kroner, but the total amount refunded was in the region of 350 million kroner. In addition, the costs involved in the litigation, including those for experts, were rather significant.
In 2016, a class action was brought against a private school on the basis that its tuition fees were too high. In January 2017, the action was approved as a class action with close to 500 members (former students of the school); the action was not challenged as a class action. In September 2017, the district court handed down its decision and ordered the school to repay an amount to the members of the class action. The case has not been appealed.