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?
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)
The procedure
- It should be filed on one of the procedure forms of our judicial code (a less
formal version of the general regime)
- It begins with the presentation of the initial petition in courts and should
conform to the general formal requirements imposed by the law.
- Consumers/citizens are called to exclude themselves (in an advertisement
published by the media).
- Judges are not confined to the evidence presented in court by the parties.
- The “Ministério Público” also monitors the procedure in order to guarantee
the procedure.
- The process will follow the general process in terms of appeal.
Actions Taken by DECO
(Material Damages and Compensation)
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.
Collective Redress Mechanisms
in Portugal / Ação Inibitória
“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.
Actions Taken by DECO
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.
In the Future?
Judicial Collective Redress
vs.
Alternative Dispute Resolution
Mechanisms
Which will win?
Thank you!
Paulo Fonseca
pfonseca@deco.pt