On 9 October 2014, the Belgian Minister of Economic Affairs appointed a non-profit association, Collectif Solidarité contre l’Exclusion: Emplois et Revenus pour tous, to act as a representative for consumer groups in collective actions in the energy sector.
This is the first time an association has been authorised to represent household energy consumers in collective actions and could indicate that an action will be brought in the near future.
If you would like to know more about this new type of action (which was introduced on 1 September 2014), please see our below March 2014 newsflash for a brief description of the proceedings.
1. Subject matter of the act
The legislation introduces the possibility to file a class action (action en reparation collective/ rechtsvordering tot collectief herstel) and allows groups of consumers harmed by a common cause to obtain damages, through the intervention of a group representative (représentant du groupe/groepsvertegenwoordiger).
2. Potential claimants
One of the most important features of the new act is that a class action can only be introduced, in the name of the group, by a group representative. Only the following organisations can serve as a group representative:
- a consumer rights organisation with legal personality, represented on the Conseil de la Consommation/ Raad voor het Verbruik
- an organisation with legal personality recognised by the competent minister; the organisation must fulfil several conditions (e.g. 3 years of existence, non-profit goal, etc.)
- an ombudsman (to be created) with the Ministry of Economic Affairs, albeit exclusively during the negotiations stage of the proceedings (see below)
3. Material scope of the act
It is important to note that a class action (reparation collective/collectief herstel) may only be used to repair collective harm suffered by consumers as a result of a violation by a business of its contractual or statutory obligations under certain specific national or EU legislation.
Indeed, the new act contains two important limitations and does not introduce a general class action.
First, the legislation under which a class action may be brought is exhaustively listed in the bill (in essence it covers fields such as consumer safety, competition, pharmaceuticals, insurance, transport, financial services and products, market practices and consumer protection, energy, intellectual property, data protection, etc.).
Second, only consumers can benefit from the new act. A consumer is any natural person who is acting for purposes unrelated to his or her trade, business, craft or profession. In other words, only consumer-to-business (C2B) class actions are possible, not business-to-business (B2B) or consumers/businesses against public authorities (C2G and B2G).
4. Stages of the proceedings
The proceedings - which will have to be conducted exclusively before the Brussels courts - consist of three stages.
- Admissibility stage: The judge will check if the action is admissible, e.g. whether the group representative meets the statutory requirements and is best situated to lead the proceedings, whether a class action would be more effective than individual actions, etc. The judge will also decide whether the proceedings are opt-out or opt-in. Opt-in means that a consumer will be included in and profit from the action only if he or she expressly takes steps to join. In the case of opt-out proceedings, everyone who falls within the scope of the class is included, unless the consumer expressly opts out and e.g. decides to bring an individual action. This is a very important stage as it will determine whether the proceedings can continue.
- Negotiations, ratification and proceedings on the merits: If the action is found to be admissible, the group representative and the defendant business will be granted a cooling-off period of 3 to 6 months in order to conclude a settlement. If the agreement is subsequently submitted to the court for ratification, the members of the group will be bound by it. In the absence of agreement or approval of the settlement, the judge will rule on the merits of the action and the claim for damages.
- Execution stage (schadeafwikkeling/répartition des indemnités): A liquidator will be appointed to implement the approved settlement agreement or the judicial decision on the merits, prepare a preliminary list of consumers comprising the group, based on the mechanism chosen (opt-in or opt-out),and oversee compensation of the consumers concerned.
The losing party shall bear the costs of the proceedings (i.e. including the usual fixed contribution to the other party's legal fees), as well as the costs of any publications required by law and the liquidator's fees. If the class action is successful, the group representative's expenses can also be recovered.
6. Temporal scope
Under the new legislation, a class action may be brought only for collective damage with a common cause which arose after the entry into force of the act. In other words, a class action may not be brought on the basis of collective damage caused before the entry into force of the act, such as the examples from recent years which gave rise to the new legislation.
7. Entry into force
The government will determine the date of entry into force of the various provisions of the act by means of royal decrees.
To the best of our knowledge, the new act is expected to enter into force on 1 September 2014.