Collective actions are permitted under a number of different procedures. Under the ação popular, actions may be brought by individuals and associations to prevent infringements of public law matters, such as health, environment, quality of life, consumer protection and cultural heritage. In addition, joint and group actions are permitted, under which the claims of individuals with common or related issues may be heard together. Collective actions are gradually becoming more common in the civil jurisdiction.
What forms of collective actions are permitted in this jurisdiction and under what authority?
In Portugal, class actions and representative actions are permitted under article 31 of the Code of Civil Procedure (which is itself based on article 52, paragraph 3 of the Constitution of the Portuguese Republic and Law no. 83/95, of 31 August). This procedure is known as the ação popular but it is, as yet, not very common.
Under the provision, an action may be brought by any person, association or foundation (but not companies or professionals) to prevent infringements of the following: public health, environment, quality of life, goods and services consumer protection, cultural heritage and public interests. This statutory mechanism also encompasses the right for the potential plaintiff to obtain compensation for loss suffered. In addition, specific statutory provisions provide for collective actions in particular areas (e.g. under the Securities Code).
Group actions are possible under Portuguese law. In this case, court proceedings are brought by a number of individual claimants concerning related or common issues, which are heard together.
Joint actions are possible under Portuguese law. Article 267 of the Code of Civil Procedure allows the judge to join different cases when the involvement of all the interested parties is necessary to retain the useful effect of the decision or when different claims have the same grounds or are interrelated. This is the case even when the cases are pending before different courts. However, each plaintiff must have initially commenced his own separate proceedings.
Who may bring them?
An ação popular may be brought by individual claimants or by an interested organisation, such as an association, foundation or city council, as outlined above. However, in order to be eligible to bring such proceedings, Portuguese law requires that the association or foundation has certain compulsory features:
- it must have legal personality;
- it must expressly include in its articles of association objectives for the defence of relevant interests in these types of actions; and
- it must not carry out any kind of professional activity competing with companies or independent professions.
Opt in or opt out?
The general rule is that a judgment made in an ação popular will bind all potential claimants, except for those who have formally “opted out”, unless the circumstances of a particular case dictate otherwise.
A collective action may be brought in any of the types of actions foreseen in the Portuguese Code of Civil Procedure. Individuals, as well as associations and foundations which are defenders of the interests protected in a specific law, may bring class or representative actions.
City councils may also bring representative actions in relation to the interests of the residents in their particular area.
Judge or jury?
What relief may be obtained?
Claimants may obtain redress according to the type of action brought, including an injunction and compensation for losses incurred and damage suffered. Punitive damages are not generally available in Portugal.
How are such actions funded?
The general rule is that the losing party is obliged to pay the court fees of the successful party, but not lawyers’ expenses or fees or other costs incurred in conducting the trial. (A small amount to compensate for these costs may be available.) However, with regard to class actions in which the claimant is unsuccessful, the judge may reduce the amount it could have had to pay in court fees by between 10% and 50% according to its economic situation and the reasons why the proceedings failed.
In Portugal, contingency fees are not permitted, although the outcome of the proceedings may be taken into account when establishing lawyers’ fees.
Government funding from the Ministry of Justice may be available to potential claimants in collective actions.
Is pre-trial disclosure available?
It is not possible to obtain an order for pre-trial disclosure of documents. Nonetheless, where there are grounds to believe that any documents in the possession of a future counterparty may be destroyed or become unavailable for any reason, it is possible to apply for an injunction to gain access to those documents with a view to initiating future judicial proceedings. Where such an injunction is granted, parties are obliged to provide the information and documents requested.
Pre-trial witness depositions may be obtained as in any civil action, that is, where there is justified concern that it may subsequently become impossible or very difficult to obtain a statement from the witness in question.
Likely future scope and development?
Cases of interest in this regard include a representative action brought in 1999 by the Portuguese Association for Consumer Protection (Associação Portuguesa para a Defesa do Consumidor) against Portugal Telecom regarding an “activation fee” which was levied every time the consumer tried to make a call. In 2003, Portugal Telecom was found to have breached its contract with its customers by charging this fee. By way of compensation, all potential claimants were permitted to make free calls for a certain period. Damages were calculated on a statistical basis; Portugal Telecom was obliged to deposit indemnity funds in court and each individual claimant then had to apply to court, proving its own loss. All claimants were identifiable.
Although collective actions are already recognised in public law matters, they are now also beginning to be developed in the civil jurisdiction. This is likely to be an area of growth for the defendant bar rather than for claimant litigators.