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Consumer Redress actions taken by Consumer Organizations and Public Authorities Actions taken by DECO - Portuguese Association for Consumer Protection. Collective Redress Mechanisms in Portugal/Ação Popular. “ Ação Popular ” (Popular Action). What is?
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Consumer Redress actions taken by Consumer Organizations and Public Authorities Actions taken by DECO - Portuguese Association for Consumer Protection
“Ação Popular” (Popular Action) What is? It´s an opt-out mechanism of general application, amounting to a representative collective action that will proceed through the court system. Legal Basis Portuguese Constitution and National Laws Who can initiate the procedure? Individual citizens, organizations and the “Ministério Público” (Public Prosecutor)
“Ação Popular” (Popular Action) Types of Disputes/Main Areas Public Health, Quality of Life, Preservation of the cultural and environmental heritage and consumer rights. Remedies Material and non material damages and compensation. It does not cover punitive and exemplary damages. Costs Consumers are exempted from the cost of preliminary preparations in bringing the case. Claimants are obliged to pay 10-50% of the court fees (as determined by the judge) if the case is lost. If the case is won, the court fees will be waived in full. The defendant will always be obliged to pay court fees regardless of whether or not it wins.
“Ação Popular” (Popular Action) Theprocedure - Itshouldbefiledononeoftheprocedureformsofour judicial code(a less formal versionofthe general regime) - Itbeginswiththepresentationoftheinitialpetition in courts andshouldconform to the general formal requirementsimposedbythelaw. - Consumers/citizens are called to excludethemselves (in anadvertisementpublishedbythe media). - Judges are notconfined to theevidencepresented in court bytheparties. - The “Ministério Público” alsomonitorstheprocedure in order to guaranteetheprocedure. - Theprocesswillfollowthe general process in termsofappeal.
The Portugal Telecom case In 1999 Portugal Telecom (Portuguese Telecommunications operator) introduced an activation fee which contravened our Telecommunication services law. DECO brought-up a group action against PT, who was ordered to refund the activation fee to all consumers concerned. This amounted to € 120 million. Due to practical difficulty of financially compensating each of the consumers affected (almost 2 million), DECO and PT agreed that the last one would guarantee all consumers free weekend phone calls for a stipulated time period.
The Carmen case In 1999, just before a high-demand concert performance of Operama Carmen in Lisbon, the media announced that the famous lead singer would not appear. Most consumers wanted full reimbursement of their tickets (the average price was € 163). DECO brought-up a group action representing all affected consumers. Simultaneously DECO and the companies involved entered in negotiations in order to compensate consumers. However, given the duration of this procedure, these companies used this time to disappear and avoid reimbursement to the affected consumers.
The English Opening-School case An English school - “Opening-School” - systematically required payment in advance of classes. More than 50% of consumers used to pay these classes through a credit provider (BBVA). When the school closed abruptly and went bankrupt, consumers were asked by the credit provider to continue their payments in its entirety. DECO brought-up a group action representing all affected consumers aiming to rescind the credit contracts due to the school´s shutdown. The court´s decision fully recognized the complaints and ordered the refund of the payments made after the shutdown.
The “Águas do Planalto” case The water service company Águas do Planalto, in face of a very cold winter that damaged some water meters, charged € 107 for each replacing service, which contravened the utilities sector´s law. 1800 consumers were affected by this company. DECO brought-up a group action representing all affected consumers. All were fully reimbursed by the company.
The “Afinsa” case In 2006, the Spanish company Afinsa (one of the largest collectibles company) went bankrupt, and in Portugal, more than 3.000 consumers lost their private investments. DECO, through its congener OCU, brought-up a group action representing, in Spain, all the portuguese affected consumers in an insolvency procedure, so that all consumers could recover, at least, part of their own private investments. Though this procedure has begun in 2006, consumers have yet to be reimbursed.
“Ação Inibitória” (Injunction action) What is? It´s an opt-out mechanism of general application, allowing injunctions against persons/companies that use or recommend unfair clauses. Legal Basis Portuguese Constitution and National Laws Who can initiate the procedure? Organizations and the “Ministério Público” (Public Prosecutor)
“Ação Inibitória” (Injunction action) Types of Disputes/Main Areas Unfair Contract Terms and Unfair Commercial Practices. Remedies Ensure that the business ceases the infringement and does not engage in similar conduct in the future. Costs Consumers are exempted from the cost of preliminary preparations in bringing the case. Claimants are obliged to pay 10-50% of the court fees (as determined by the judge) if the case is lost. If the case is won, the court fees will be waived in full. The defendant will always be obliged to pay court fees regardless of whether or not it wins.
Banco Comercial Português, Banco Totta & Açores, Banco Espirito Santo and others – Injunction regarding the use of abusive clauses on payment cards ‘contract clauses. Nikomagnetic, Biocasa, Pink Dream and Otorrosio – Injunction regarding the use of aggressive practices regarding the sales of mattresses. Key Club and Jogol – Injunction regarding the use of abusive clauses on timeshare contracts. TAP and Easyjet – Injunction regarding the use of abusive clauses on air transport´s contracts. Apple – Injunction regarding the use of misleading practices on sales contracts.
Judicial Collective Redress vs.Alternative Dispute Resolution Mechanisms Which will win?
Thank you! Paulo Fonsecapfonseca@deco.pt