​Romania implemented at the end of 2023 the Directive on Collective lawsuits. What the new Law 414/2023 brings regarding taking actions in the representative office to protect the collective interests of consumers ? Is this procedure adapted to the procedural appetites of Romanian consumers, or will it remain a form without content?

According to the Law 414/2023 on representation for the protection of collective interests of consumers (“Law 414/2023») are regulated actions in the imagination, with the help of which you can strive for i) termination of some practices or / and ii) compensate consumers for damages.

Practices that are regulated by the normative acts listed in the List attached to the law (66 national and European normative acts are listed) are considered. Among others, the following economic subjects are directed:

• Liability of manufacturers for product defects;
• Operators of air, sea and river transport;
• hospitals;
• Internet sellers;
• Financial services;
• Credit institutions / TIN / payment service providers;
• Insurers;
• Operators in the field of energy and gas supply;
• Tourist operators;
• Internet providers.

Actions should relate to a collective interest of consumers and should be avoided conflict of interest(and). Analyzing the types of lawsuits that can be initiated, we notice that the application of Law 414/2023 is cumbersome (ii) and we do not expect it to be very popular among consumers in Romania (iii).

1. Conflict of interest and qualified persons

As for the conflict of interest, it considers the use of such actions to influence competition or for the purpose of intimidation. The conflict may also concern sponsors of the initiator class actions (qualified organization). If there is a conflict of interest, the court may order, among other things, to dismiss the motion for lack of procedural merit.

The law defines a conflict of interest as “a conflict between the qualified entity’s own interests and the interests of consumers, when the qualified entity/its representative/financier, as a private person, has interests that may improperly influence the fulfillment of obligations and responsibilities undertaken as a consumer representative. , or due to the adoption of decisions contrary to the interests of consumers, or due to the quality of a qualified person/his representative/financier as a competitor of the professional defendant“.

Actions can be promoted not morewithqualified personswhich can be public or private;

a) Qualified public bodies have the status of a qualified organization under the law – the condition is to be an organization that has the authority to apply the laws listed in the Schedule attached to the law (eg ANPC);

b) Private individuals must apply and meet a number of conditions clearly established by law – the status of a qualified person is offered by state institutions from the previous point;

i. Conditions must be met during the entire period of activity subject;

ii. If a private individual does not meet the requirements and files a representative action, the application is dismissed as inadmissible. The court can verify the fulfillment of the conditions.

iii. A list of all qualified organizations will be compiled and posted on the websites of some government agencies;

iv. Qualified person status is granted with an indication of the type of claim they can bring – domestic, cross-border or both.

2. Types of actions that can be formulated

Claims may relate to domestic or cross-border violations and may be filed by qualified entities from Romania or another European Union member state.

Actions can have two goals: termination of practice or / and damage repair. The legal regime of these types of claims differs:

and. The main difference is that for action in the cessation of a particular practice consumer consent is not required;

ii. For damages should the written consent of each consumer represented is obtained. Consent can be given before the debate is closed and consumers must be informed from the moment the request is made;

iii. Professionals may be required to provide public information regarding lost lawsuits.

Actions are considered according to the general procedure, with the special feature that the appeal suspends execution.

Claims brought by qualified organizations are exempt from stamp duty and legal costs cannot usually be borne by the consumers they represent (unless they have incurred the costs as a result of their own willful or negligent conduct).

The parties to the dispute can enter into transactions that will be reviewed by the court.

It is also very important that the decision of any member state regarding the practice of a professional can be used as sample before a national court in a case concerning the same violation by the same professional.

3. Conclusions

Law 414/2023 transposes Directive (EU) 2020/1.828 and contains important rules on collective consumer representation. Reflecting a European perspective on this issue (one that differs from the well-known “class actions” in the United States of America), Law 414/2023 could significantly affect the relationship between companies and consumers.

However, there are several elements that lead us to conclude that it will not find a place in the Romanian procedural landscape in the near future:

1. a. Subjects must qualified by someone Who/when/against what amount will analyze whether the NGO is qualified to protect consumers?
2. b. Actions for damages require the consent of the consumer. It will be difficult for a qualified entity to attract a significant number of consumers.
3. The appeal postpones the execution. However, individual action will always be more attractive to the consumer, as he will be able to execute a possible favorable decision more quickly.

At the same time, Law 414/2023 provides mechanisms for limiting/preventing the commission of offensive/persecutive actions, which by nature affect the activity and reputation of companies. These mechanisms should prevent any attempts at unfair competition through Law 414/2023.

Even if it is possible that the consequences of this law in Romania will take effect with a delay, companies should take this into account in order to be able to prevent or manage possible future lawsuits, lawsuits that will require much more evidentiary efforts than individual ones.

The article was signed by Adrian Cristea (senior lawyer), Eduard Morario (lawyer)