New Civil and Commercial Code
The Argentine Congress has rewritten the country’s civil and commercial law. Argentina is a Civil Law jurisdiction with almost all law established by code. The Civil and Commercial Codes of Argentina, which initially were implemented in the late 19th century with subsequent amendments over time, have now been scrapped for a new unified Code that passed on October 1, 2014. It will take effect on January 1, 2016.
Some of the provisions included in the Code are completely new, others codify existing jurisprudence. Key features include:
- Liability without fault for certain types of products and activities;
- Potential shifting of the burden of proof;
- Allowances for courts to assume damages without proof “where evident from the facts”;
- Enterprise liability; and
- Retroactive application.
The new Code will take full effect in 2016. It will be some time before the interpretation and application of these provisions by courts will be better understood.
New Procedures for Consumer Claims
In September 2014, the Argentine Congress passed a bill creating new administrative agen- cies and tribunals with exclusive jurisdiction over consumer claims. New processes under the law include:
- Mandatory pre-suit mediation of all consumer law claims seeking compensatory damages not exceeding 55 minimum monthly salaries (approximately US$28,600; the current minimum monthly salary equates to 4,400 Argentine pesos, which is approximately US$520). A Mandatory Conciliation Service in Consumer Relations (referred to as COPREC) will be created within the Ministry of Economy and Public Finance to oversee such mediations.
- Summary administrative proceedings for claims seeking compensatory damages up to 15 minimum salaries (approximately US$7,800). These will be adjudicated by an Auditor of Consumer Relations. Claims will be resolved in a single oral hearing, with no written briefing, within 13 days of filing.
- Truncated judicial proceedings for claims seeking compensatory damages between 15 and 55 minimum salaries. These claims will be adjudicated by a new Federal Court for Consumer Relations, which will consist of both trial and appellate courts. Closing argu- ments will not be permitted; judgments will be given in the same hearing where the evidence is produced; there are no interlocutory appeals; and a court may order execution of a judgment, pending final appeal.
- Punitive damages may be granted by any of these new tribunals, allowing total awards well over the established jurisdictional cap established for filing in that court.
The new law must be implemented by the Executive through a Regulatory Decree, which has not yet been issued. Therefore, it is yet to be seen how these agencies and tribunals will operate in practice, and whether the goal of expediting consumer claims will truly be achieved. The government is currently advertising on television and radio that the new procedures will always resolve disputes in favor of the consumer.
New Class Action Procedures
On October 1, 2014, the Argentine Supreme Court issued an Agreement – a document signed by all of the Court’s members agreeing to enact a procedural rule – for the creation of a national Registry of Class Actions to be maintained by the Secretary of the Supreme Court. The information to be provided to the Registry by the trial court presiding over a class action must include:
- A copy of the court’s ruling on class certification, which must identify the collective assets implicated in the case; state whether there is adequate class representation; and determine the best method to notify all potential interested persons of the outcome of the litigation.
- information on the parties to the case as well as their attorneys.
- A class definition.
- A description of the subject matter of the case.
The Registry will be maintained electronically and will be accessible by the public, free of charge. Initially, it will include class actions pending in federal courts throughout the country. The goal is to eventually include class action proceedings from provincial courts as well.
The stated purpose of the Registry is to avoid multiple class action proceedings in different courts involving the same questions of fact and issues of law. The Agreement creating the Registry does not address the process for consolidating such cases; however, the rules of procedure provide a mechanism that can be followed for doing so. How effective that procedure will be and how courts will interpret the similarity between separate class actions remains to be seen.
For now, companies with potential risk of litigation in Argentina should prepare for these significant changes in the substantive and procedural laws.