The scope of the Belgian class action is extended to SMEs
Background – a procedure initially limited to consumer disputes
A class action procedure (action en réparation collective/rechtsvordering tot collectief herstel) was introduced into Belgian law by the Act of 28 March 2014 (the “Class Action Act”). Its scope was initially limited to the reparation of collective prejudices suffered by consumers as a result of the breach by an undertaking of either its contractual obligations or the provisions of exhaustively enumerated legislations. In order to avoid excessive litigation, the right to start and to conduct the proceedings was exclusively granted to certain consumer organisations. Six proceedings have been launched to date, all of them by Test-Achats/Test-Aankoop.
Our experts have conducted thorough analyses of the Belgian class action regime in several publications, available here (Revue de Droit Commercial Belge/Tijdschrift voor Belgisch Handelsrecht), here (Treaty ‘L’action en Reparation Collective/Rechtsvordering tot Collectief Herstel’) and here (ICLG Class and Group Actions 2018).
Extension to SMEs – what’s new?
Following a first evaluation of the Class Action Act, and in light of the recent Fipronil-crisis, the Belgian Government has decided to extend the scope of the procedure to SMEs. They are defined as Belgian or foreign enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.
The fundamentals of the Class Action Act are not modified by the New Act:
- the SMEs victim of an alleged collective prejudice cannot conduct class action proceedings on their own motion. They must be represented by a Belgian or foreign SMEs’ organisation, such as the Union des Classes Moyennes (UCM) or the Unie van Zelfstandige Ondernemers (UNIZO);
- the SMEs’ collective prejudice must result from the alleged breach by an undertaking of either a contractual provision or one of the many legislations enumerated by the Act (amongst others, on product liability, consumer protection, insurance, banking and finance, energy, payment and credit services, intellectual property, privacy protection or professional liability). These legislations include the prohibition of anticompetitive and unfair market practices, which are likely to be the gist of the future claims launched by SMEs organisations;
- the court can choose either an opt-in procedure (whereby SMEs specifically opting in can benefit from the action) or an opt-out procedure (whereby all SMEs affected by the breach benefit from the action unless they opt-out), unless for SMEs which do not have their principal offices in Belgium for which the opt-in procedure is mandatory.
Entry into force
The New Act is going to enter into force upon its publication in the Belgian Gazette, which is likely to take place in a couple of weeks. Its provisions will be immediately applicable, which means that it will be possible to lodge proceedings for alleged breaches occurred before the New Act’s publication (but after 1 September 2014, the date of entry into force of the Class Action Act).