All questions

Litigation

i Forum

In Argentina, judicial proceedings are overseen by judges. The forum for consumer claims based on civil product liability is civil or commercial, and the court will consist of a judge who must make a ruling regarding the liability of the defendants. It usually takes four or five years to get a lower court judgment.

In Buenos Aires, and in some provinces, trials are started by simply filing the suit after a mandatory mediation proceeding. However, a new system for consumer-related disputes was enacted in September 2014. This system provides for alternative resolution methods such as mediation, administrative proceedings before the Secretary of Commerce, as well as new courts specialised in consumer matters and summary proceedings. If the parties reach an agreement during the administrative mediation process, the agreement must be approved by the Secretary of Commerce.

Settlements between adult parties in individual proceedings must be approved by the court, but as long as the settlement does not infringe the public policy and is not subject to other rules there are no reasons to reject the approval. Settlements in claims on behalf of infants must be approved by the court, having previously been heard by the Official Defender of Minors.

Besides the above, the CPA provides for arbitration for consumer claims and administrative dispute resolution proceeding.

The legal system provides for an appeal to a court of appeals against a final judgment from a lower court. Extraordinary appeals can be admitted to the Supreme Court if the federal matter is involved or if a judgment is deemed arbitrary. When the nation is involved, an ordinary appeal to the Supreme Court can be an option too.

As mentioned above, the administrative authority can impose penalties. Those penalties can be reviewed by the court.

The 'loser pays' rule applies in Argentina, but courts have the power to depart from that rule in certain cases. However, the losing party can be released from bearing litigation costs by proving its lack of economic resources. Under the CPA, consumers and other accepted plaintiffs are automatically granted the right to litigate without bearing costs, but there is no consensus as to whether that right only releases from the duty to pay the litigation tax or also from the duty to bear other costs. Recently, the Supreme Court has ruled in the latter way; however, if the plaintiff is a consumer association, this must have been previously registered.

ii Burden of proof

Under the CCCN generic system, the claimant has the burden of proof of the damage, as well as the extension of damages. Also, the claimant has to prove the defect and the causal link between the defect and the damage.

The defendant must prove the lack of damage or the absence of link with the defect. In the latter, the defendant must prove that the damage stems from a fault of the victim, a third party's fault or from force majeure. Therefore, the defendant has the burden of proof that the causal link was interrupted by another event, alien from them.

Under the CPA system, the consumer need only prove the damage and its relation to the product.

The CCCN has introduced a new aspect to the law: the court can impose the burden of proof onto the party who is in a better position to prove it. In this case, the court must communicate this decision to both parties. It is not clear when the court must do this: at the beginning of the lawsuit or during the trial.

Additionally, in disputes ruled by the CPA, the provider must cooperate with the claimant, disclosing any useful information.

The key issue in any dispute is to prove the causal link between the damage and the product. In this regard, courts apply the standard of 'adequate cause', which is based on the ordinary course of events.

Additionally, a new claimant can take advantage of issues that have arisen in a previous proceeding filed by another claimant.

iii Defences

There are two classes of defence: procedural defences and substantial defences.

The main procedural defences under the Federal Rules of Procedure are:

  1. statute of limitation (which may also be considered as a substantial defence);
  2. lack of jurisdiction of the courts before which the suit was filed;
  3. lack of standing to sue;
  4. litispendence, because the same cause of action is pending in another court; and
  5. res judicata.

The main substantial defences in strict liability cases are:

  1. lack of causal link between the damage and the product;
  2. force majeure or similar situations;
  3. victim's negligence; or
  4. damage caused by third persons for whom the defendant has no liability.

In (c) and (d), the defences will have force majeure characteristics.

The 'state of the art' or 'development risk' defence is not regulated in Argentina's legislation, and there is no consensus as to whether such a defence will be applicable or not, as the general liability and CPA systems are strict. In general, this is not a valid defence.

Fulfilling regulatory and statutory requirements relating to the development, manufacture, licensing, marketing and supply of a product is not enough to reject the liability in all the cases. However, it can show indirectly that the damage was produced by another event and was alien to the product. The defendant can seek contribution by asking the courts to summon the third party to join the existing litigation or by suing the third party after the existing litigation ends. However, in the latter case, the third party can motion for the dismissal of the subsequent proceeding, alleging that the defendant failed to defend itself properly in the previous proceeding.

The CPA specifically allows members of the supply chain held liable to seek reimbursement from the other members, to contribute or indemnify them, as the case may be.

The statute of limitation for torts and civil liability action is three years, and for breach of contract claims is five years. However, the statute of limitations for hidden defects is one year. The statute of limitations for administrative penalties under the CPA is three years.

Some circumstances might affect the calculation (e.g., pre-judicial claims or continuing damages). Additionally, the courts are allowed to supply extra time when the suit was not filed on time owing to the existence of factual obstacles, provided that the claim is filed within six months of such obstacles disappearing. A similar solution is applicable if the plaintiff failed to file the suit because of fraud of the defendant.

iv Personal jurisdiction

A person not domiciled in Argentina can be brought within the jurisdiction of our courts, as a claimant as well as a defendant.

A person can be a claimant if he or she has a claim against a person domiciled in Argentina, or if the claim arises from breach of a contract that should have been fulfilled in Argentina. The person can also be claimant due to a tort, when the damage occurred in Argentina. In certain cases a caution might be required for the foreign claimant, although this requirement can be waived.

A person might be a defendant if a claim arises from breach of a contract that should have been fulfilled in Argentina; or if the defendant has a branch or representative office in Argentina and it has taken part in the contract; or if there is a tort claim and the damage occurred in Argentina; or if the case involves consumer rights and Argentina is where the contract should have been fulfilled, where the consumer is domiciled or where the consumer has entered into the contract.

Although forum selection clauses are admitted in Argentina, they are not in consumer contracts.

v Expert witnesses

The courts can appoint expert witnesses. Each party is allowed to appoint private experts to evaluate the conclusions of the experts appointed by the courts.

Evidence must be related to the facts under discussion and must be relevant to the case. There is no obligation to present expert witnesses or to exchange witnesses' statements or experts' reports prior to trial. In certain cases, parties can seek conservatory measures to guarantee the availability of certain evidence, such as elder witnesses' statements.

vi Discovery

In principle, each party has the duty to present the evidence that it deems necessary or convenient. Therefore, there is no obligation to disclose documentary evidence.

However, a party can ask its counterparty to submit relevant documents in its possession. A party's reluctance to submit that documentation might be considered by the court as a negative inference against it.

Additionally, according to the CPA, defendants should cooperate and produce all the evidence that they have.

vii Apportionment

According to the CPA, the manufacturer, importer, dealer, provider, retailer and anyone who puts its brand or trademark on a product or service are jointly, strictly and severally liable for any damages caused to a consumer by the risk or defect of the product or service. That is, all the members of the supply chain may be considered liable under the CPA and all of them will have a shared obligation with the victim. Each one of them can be released from liability by proving that the cause of the harm is alien to them. Also, the carrier shall be liable for damages arising from transportation.

The CPA specifically allows members of the supply chain held liable to seek reimbursement from the other members, to contribute or indemnify them, as the case may be. According to the CCCN, the solution is the same, taking into account the rules of the shareholder obligations.

However, in these kinds of cases, the real cause of the damage prevails. A person who was held liable because of his or her fault and ended up paying the total compensation can seek proportional reimbursement from another who was considered guilty as well. Likewise, one who was held liable because of his or her strict liability and ended up paying compensation can seek reimbursement of the total payment from the one who was condemned because of his or her fault. This kind of obligation is known as 'concurrent obligations', because each liability has a different cause.

viii Mass tort actions

Collective actions are allowed based on Section 43 of the National Constitution and certain provisions of the CPA.

Many aspects of collective actions are still being developed by courts and scholars, as there is no comprehensive regulation on this matter. However, under the CPA, consumers are entitled to opt out.

In Argentina, collective actions are common in connection with claims such as mis-selling of financial services and abusive fees, but not in product liability cases.

However, a putative class action of 300 women has been filed against a laboratory, an insurance company and a certification body, all of them foreign companies, in connection with allegedly defective silicone implants.

There are also certain actions requesting environmental remediation as well as damages arising out of allegedly toxic products such as pesticides.

Finally, in September 2014, the National Supreme Court enacted a decree creating a Public Registry of Collective Actions.

In principle, claims can be brought by the government, the public attorney, the ombudsperson and consumer associations. There is no consensus as to the possibility of an individual to bring a collective action.

Under the CPA, settlements in collective actions must be approved by the court with the prior consent of the public attorney. These settlements should also allow consumers to exclude themselves from the binding effect of the settlement.

ix Damages

In principle, all damage that is not remote shall be fully compensated. This includes:

  1. damage to the product itself;
  2. bodily injury;
  3. mental damage;
  4. moral damage;
  5. loss of profits; and
  6. loss of chance.

The CCCN also provides for compensation for interference to the victim's life.

The same expenses for damage can be recovered (e.g., the cost of medical monitoring, cost of investigations or tests) in circumstances where the product has not yet malfunctioned and caused injury, but may do so in the future.

Future damage shall only be compensated if its occurrence is certain or if it is an inevitable consequence of current damage.