An extract from The Class Actions Law Review, 4th Edition
Introduction to the class actions framework
The only collective action procedure available in Portugal that is similar to common law's class action is the 'popular action'.
In accordance with Article 52 of the Portuguese Constitution, every citizen has the right to individually, or jointly with others, submit petitions, representations, claims or complaints to defend: their rights; the Constitution; the laws or the general interest of sovereign entities; self-government bodies of the autonomous regions; or any authority. They also have the right to be informed of the outcome of any petition, representation, claim or complaint within a reasonable time frame.
All citizens with political and civil rights have the right to popular action, independently or through associations or foundations incorporated to defend relevant diffuse interests.
The general procedure and framework for bringing popular actions is set out in Law 83/95 of 31 August 1995 (Law 83/95). Law 83/95 establishes for all interested parties the right to opt out of a popular action. This is explained in more detail below.
While the rules concerning popular actions apply to all areas and sectors of the law, there are several provisions in addition to Law 83/95 that expressly prescribe the right to popular action. These provisions relate to specific areas of the law, such as the Environmental Policy Law, the Consumer Protection Law, the Cultural Heritage Law, the Securities Code and the rules governing actions for damages for infringements of competition law.
Comparable to class actions are the collective actions heard together when multiple claimants join separate claims on a similar or related subject in one action (joinder of parties). This type of group claim is provided for in Portugal in both the Civil Procedure Code and the Administrative Procedure Code. Moreover, when two or more proceedings are already pending before the court, it is possible to request that both cases be joined where there is a connection between the claims (joinder of actions).
The main difference between a joinder of parties or actions and popular actions is the opt-out rule. Also, whereas claimants generally only represent themselves and their interests (even when they join an action), popular actions' claimants represent all parties with an interest or a right in the proceedings. In contrast to a mere joinder of parties, claimants may not have a direct interest in the claim submitted in a popular action. Furthermore, it is not mandatory that the claimants involved in a popular action have suffered any ongoing or impending injuries or damage. Claimants represent their class at their own discretion, without needing a proxy or express authorisation from the other class members.
Since these types of claims are not common, no specific court or judge has jurisdiction to hear popular actions. The administrative and the civil courts have general jurisdiction.
The year in review
As mentioned before, class actions (popular actions) are not very common in Portugal. According to statistical reports on the exercise of civil popular actions before first instance courts, only 209 cases were finalised from 2007 to 2018, and in 2018 alone, only nine civil popular actions were closed. The average number of cases heard before first instance courts in Portugal is 18 per year.
Nonetheless, the number of popular actions filed by retail investors, or associations on behalf of retail investors, for the protection of the investors' homogeneous individual or collective interests in financial instruments, and popular actions filed by the Association for the Defence of Consumers (DECO) with the purpose of ensuring consumer safety and protection, has increased significantly.
In March 2016, 100 investors, from the Association of Aggrieved Investors of Banif (Alboa), filed a popular action before the administrative courts to annul the resolution measure taken against Banif.
In September 2016, more than a 1,000 investors filed a popular action before the Lisbon Administrative Court against the Bank of Portugal, its governor and the Portuguese state. They claimed compensation for damage caused by serious shortcomings in the prudential and market conduct supervision with regard to the defendants' involvement in the Banco Espírito Santo case.
Also, in April 2017, Alboa filed a new claim before the Lisbon Administrative Court against the Bank of Portugal to annul a new resolution that clarified and amended the resolution measure taken against Banif. This claim was also filed against the public prosecutor, in representation of the Portuguese state, the Resolution Fund, the Directorate General for Competition of the European Commission, the European Commission, Banif and Banco Santander Totta, among others.
In September 2017, the Alfama Heritage and Residents Association filed for a protective measure to prevent the construction of the Jewish Museum in Largo de São Miguel, arguing that the area designated for the building should be used for housing purposes.
In November 2017, it was reported that Association of Investors and Technical Analysts and the association representing the aggrieved investors of PT/Oi (Alope) intended to file a popular action against Haitong (formerly known as Banco Espírito Santo de Investimento). The claim should take into account the sale of structured finance products of the former Portugal Telecom.
In January 2018, the president of the Municipality of Sintra announced that a popular action was being drafted against the Portuguese Postal Service owing to the unilateral decision to close one of the post offices in the area.
In March 2018, a popular action was filed by DECO for the reimbursement of €60 million, allegedly charged unlawfully by the telecommunications operators Altice/MEO, NOS and NOWO to its clients in late 2016 and August 2017, through unilateral amendments to prices without prior written notice.
In April 2018, the Algarve Surf and Marine Activities Association filed a popular action before the Loulé Administrative and Tax Court to stop oil prospection and exploitation in Aljezur, Algarve. The proceedings were brought against the Portuguese state, the Ministries of Economy, of the Sea and of the Environment, the Directorate-General for Marine Natural Resources, Security and Services, the Fuel Market National Institution, the Portuguese Energy Regulatory Body, the Directorate-General for Energy and Geology, the Portuguese Environment Agency, and the energy corporations GALP and ENI.
In November 2018, DECO filed a popular action against Facebook, regarding the misuse of users' personal data without their prior consent and the breach of their privacy, through apps operating in the social network. DECO is claiming a minimum amount of compensation of €200 for each Facebook user, for each year of registration on Facebook.
In September 2019, the Portuguese Competition Authority fined 14 of the leading banks in Portugal a total of €225 million in connection with the concerted practice of exchanging sensitive commercial data on their credit products in retail banking, namely mortgages, and consumer and small and medium-sized enterprise credit products, for more than 10 years. Following this ruling and the defendants' appeals, DECO announced the possibility of commencing a popular action against all 14 banks for damages arising from infringements of competition law.
Additionally, in November 2019, the Vila Franca de Xira Legionella Victim Support Association filed a popular action with the Administrative Court of Lisbon. This action to claim damages was filed against the Portuguese state on behalf of all 330 victims of legionnaires' disease who were not identified as carrying the strain of the legionella bacteria that reportedly caused the epidemic in Vila Franca in March 2017. The victims have requested minimum compensation of €8,050 each.
