Actualités juridiques
Draft bill on class action: To be revised!
The Chamber of Commerce and the Chamber of Skilled Trades and Crafts have just issued a joint opinion on the draft bill introducing a class action for consumers, a hitherto unknown mechanism in Luxembourg consumer law. While the professional chambers are not opposed to the aim of the draft bill, which is to defend consumers, they cannot approve it as it stands. Indeed, several provisions, including those defining the scope of application of the future law and the persons authorised to use it, as well as certain aspects of the way in which the procedure is foreseen to be carried out, are likely to place too great a risk on economic stakeholders or unnecessarily complicate future procedures arising from the implementation of the new law.
Draft bill no. 7650 on the introduction of class action in consumer law envisages the introduction of a class action mechanism available to consumers. This would consist of three phases: firstly, a judgment on the eligibility of the claim, then a possible out-of-court settlement of the collective dispute and, if the parties fail to reach an agreement at the end of this phase, a judgment on the liability of the professional. While the Chamber of Commerce and the Chamber of Skilled Trades and Crafts are not opposed to the objective of the draft bill, which is to protect consumers, they are strongly critical of several of its provisions.
A scope that needs to be limited
With regard to the scheme for class action envisaged by the draft bill, the professional chambers regret the extremely broad scope of application proposed, which consists in ultimately encompassing any dispute between a consumer and a professional. In the interests of legal certainty and predictability for all parties, they therefore recommend limiting the scope of the bill to breaches of the provisions of the Consumer Code - subject to the eventual transposition of Directive 2020/1828 - or at the very least adopting a restrictive list of the provisions for which a breach on the part of the professional may give rise to the introduction of a class action.
The professional chambers also regret that the bill does not limit claims to certain types of damage, but instead intends to cover all types of individual reparable damage, both material, moral and bodily. The introduction of moral and bodily injuries, which are inherently unsuitable for the class action mechanism because of their individual nature, does not meet with the approval of the professional chambers, in particular because of the lengthening and increasing complexity of the procedures that this would entail. They therefore insist that only material damages suffered by consumers should be compensated in the context of a class action.
Do not unfairly tarnish the reputation of professionals
In the context of the procedure introduced by the draft bill, the professional chambers also note that the judgment on the eligibility of the action, coming at the end of the first stage of the procedure, will be submitted for publication. They are strongly opposed to any publication of this judgment on the eligibility of the action and insist that no publication should be ordered before the very principle of the professional's liability has been established by a final court decision, in order to preserve the reputation of the professionals concerned by such an action.
Using good conscience and authorised representatives
The professional chambers are also opposed to the introduction of the ‘opt-out’ system for establishing the group of consumers concerned by the class action, as only the ‘opt-in’ system makes it possible, in their view, to guarantee that no individual is involved in a legal action against his or her will or without his or her knowledge, and to ensure respect for the rights of the defence by enabling the professional to know all of the complainants and thus to construct his or her defence accordingly.
Therefore, the professional chambers are of the view that only the ‘opt-in’ system should be used for establishing the group of consumers concerned by the class action within the framework of the draft bill.
The draft bill provides for allowing a consumer or ‘any duly constituted non-profit association whose statutory purpose includes the defence of interests that have been harmed’ to initiate the class action procedure and to be a representative of the group, without imposing strict criteria in terms of representativeness, resources and skills. This provision is of concern to the professional chambers because of the risks of abuse and untimely proceedings that they pose to companies subject to a complaint. The professional chambers therefore request that only an association approved within the meaning of Article L. 313-1, paragraph 1 of the Consumer Code or an established sector-based regulatory entity may file a class action.
There is no urgency
The professional chambers also recall the recent adoption of Directive (EU) 2020/1828 of the European Parliament and Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers, which will have to be transposed into national law by 25 December 2022. They therefore strongly insist that the adoption of draft bill no. 7650 and the transposition of Directive 2020/1828 should take place at the same time. Indeed, it would make no sense to adopt the draft bill urgently, knowing that it will have to be amended a few months after its entry into force in the context of the transposition of European Directive 2020/1828.
As a consequence of these numerous reservations, the professional chambers will follow with great attention the developments relating to this draft bill which could have a negative impact on a significant number of Luxembourg economic stakeholders in an already difficult economic context.
The full text of the opinion of the Chamber of Commerce and the Chamber of Skilled Trades and Crafts can be consulted here (in French)