Collective redress is obtainable in Spain under two distinct procedures: a collective action, which may be brought where individual claimants are identified or easily identifiable; and a second, representative action, which may be brought to protect the common interests of consumers whose identity is unknown or difficult to determine. In both cases, the action may only be commenced by an authorised entity and they are both limited to consumer claims.
Public awareness of the availability of collective redress would appear to be increasing and it is likely that an increasing number of such actions will be brought in the future, although whether their ambit will be extended beyond consumer actions remains to be seen.
What forms of collective actions are permitted in this jurisdiction and under what authority?
Class actions are permitted by the Spanish legal system, although they are slightly different from the ones that exist in the US and certainly have a more limited scope, being limited to consumers. The introduction of the Spanish Law of Civil Procedure (“CPL”) in 2001 provided mechanisms whereby groups and certain legal entities may bring actions on behalf of consumers, where a number of individuals have all suffered loss or damage due to the same event.
There are two types of group action permitted under Spanish law: claims to defend the “collective interest” under Article 11.2 of the CPL and actions to protect the “widespread or diffuse interest” of individuals under Article 11.3 of the CPL.
- Actions to protect the collective interest (“collective actions”)
These may be brought by a consumer association or other authorised legal entity when the individual claimants affected are identified or are easily identifiable, such as victims in a rail accident. The action is brought on behalf of the individual claimants by the association or legal body, or even by the group itself if its members represent a majority of the potential claimants.
- Actions for the protection of “widespread or diffuse interests” of consumers (acción para la protección de intereses difusos) (“representative actions”)
These actions may be brought by a sufficiently representative consumer association for the protection of the common interests of consumers whose identity is unknown or difficult to determine. It is not necessary to identify the individual claimants.
Who may bring them?
A group of prospective claimants can bring a collective action whenever the members of the prospective group are identified or are easily identifiable, provided that its members represent a majority of the pool of affected consumers. Consumer associations and certain authorised legal entities can also bring collective actions in these cases.
If the members of the group are unknown or difficult to identify, only representative actions are possible. They must be commenced by sufficiently representative consumer associations. Only the members of the Spanish Council of Consumers are considered sufficiently representative for these purposes. Workers’ unions and competent public bodies also have legal standing in certain cases.
In addition, public prosecutors can bring any collective action allowed under Spanish law and certain qualified bodies from any EU member state are allowed to seek injunctions for the protection of consumers’ interests in Spain. This special regime of representative actions was introduced in Spain in order to implement the EU Injunctions Directive 98/27/EC.
Opt in or opt out?
In Spain, individual consumers do not need to agree to participate in collective actions brought by groups, associations or legal entities. They are free to opt in but not to opt out of the proceedings, since they will be bound by the final decision no matter what they do. If they opt in, they will be able to claim their damages in the same proceedings within a certain time, depending on the kind of collective action. If they stay out of the proceedings, they will nonetheless be bound by the decision and able to benefit from it by filing their claim for damages with the court enforcing the judgment.
Precisely for this reason, Spanish law tries to guarantee that individual consumers are aware of the proceedings and have the opportunity to join them, support the position of the claimant and seek their individual damages. This is done by (i) publicising the grant of permission for the claim to proceed in the media (usually newspapers) of the territory in which the damage occurred and (ii) in cases where the members of the group are identifiable, by obliging the claimant to send a letter to all of them prior to the filing of the claim.
Once proceedings have been commenced, individual claimants can join the proceedings. In cases where the members of the group are identifiable, they can do so at any time. If they are not, the proceedings will be stayed for two months while the claim is publicised. Potential claimants will only be able to come forward and join the claim during that period.
In any case, the group or legal entity that brings the collective action can also claim damages on behalf of the individual consumers whenever it is feasible. Once these damages are awarded, the representative can even seek enforcement on behalf of the beneficiaries of the award.
If the court upholds the claim, it must decide which individuals are entitled to benefit from the award regardless of whether they joined the proceedings or stayed out of them. Therefore, the court will need to rule on the individual claims filed by affected consumers who joined the proceedings and also state whether other members of the group of affected consumers can benefit from the relief obtained by the claimant. If it is not possible to identify the beneficiaries of the award with sufficient certainty, the court will need to establish the requirements that individuals must fulfil in order to be entitled to be included among those benefiting from the award. If the collective action is rejected by the court, all affected consumers will be bound by that decision no matter whether they joined the proceedings or not, and they will not be able to bring new actions (e.g. for damages) against the defendant arising from the same facts.
Apart from the limitations stated above, it must be noted that class actions are not allowed whenever the potential claimants are mere bystanders, e.g. in environmental law cases. In such cases, group litigation is still possible because individuals can join forces and file their individual claims together, provided that they arise from the same facts (e.g. asbestos contamination by a particular factory). However, the court will judge each of these claims individually and each decision will not be binding on third parties.
Collective actions are permitted in all areas of the law in which the interests or rights of consumers are involved, such as consumer fraud, misleading advertisements, antitrust and competition law, consumer credit, product liability, unfair or abusive contract terms, package travel, distance selling contracts, sale of consumer goods and guarantees, mass torts and so on.
Judge or jury?
What relief may be obtained?
Damages may be obtained and are awarded on a compensation basis. Punitive damages are not available in Spain.
Other kinds of relief, such as publication of the judgment in the media or an injunction, are also possible in certain cases.
How are such actions funded?
Usually, the unsuccessful party will be ordered to pay the costs of the successful party. Legal expenses of up to a third of the amount in dispute may be awarded to the successful party.
The consumer associations bringing collective actions in Spain are financed to a large extent by government subsidies and there is little risk for the individual claimant consumers.
Although contingency fees are prohibited under the General Statute of Legal Practice, such agreements may still be enforceable between client and lawyer where they have also agreed a minimum fee in advance.
Is pre-trial disclosure available?
The general rule is that the parties only disclose the documents on which they rely. Pre-trial discovery is therefore not usually permitted. However, there are two procedural instruments that allow a party to request disclosure of certain documents:
- a preliminary application that can be started by the future claimant prior to filing the claim, the specific purpose of which is to obtain disclosure of documents from the future defendant (diligencias preliminares). The scope of this application is rather limited because only certain documents can be requested. However, it is frequently used in collective actions because it allows the claimant to ascertain who the members of the group of consumers are that should be invited to opt in (e.g. buyers of a certain automobile, a financial product, a condominium, etc.);
- an application for documentary disclosure (exhibición documental) which allows any party to request from the other the disclosure of documents that are not at its disposal. In order to exercise this right, the petitioner must do so during the first hearing of the application (typically during the preliminary hearing) and identify clearly the contents of the documents that it requests from the other party.
Likely future scope and development?
The introduction of these two group actions is still relatively recent in Spain. However, consumer awareness of this type of litigation would appear to be increasing and the new laws have been applied in several recent cases in, for example, the telecommunications and financial services sectors. Given the recent extension in the powers of the public prosecutor to bring collective actions, it is likely that an increasing number of such actions will be brought in the future. The Spanish government has so far failed to indicate any intention to extend the principle beyond the realm of consumer protection, but this cannot be completely ruled out.