ARTICLE
27 June 2008

Proposed Class Action Laws

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CMS Cameron McKenna Nabarro Olswang

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Draft legislation on pursuing claims in group actions has been produced by the Polish Civil Law Codification Commission.
Poland Litigation, Mediation & Arbitration

Draft legislation on pursuing claims in group actions has been produced by the Polish Civil Law Codification Commission

The bill's introduction into law may be months away and its contents subject to change in the meantime. However, the opportunity to pursue claims collectively would be a significant step for claimants and its emergence as a possibility is likely to elevate the importance of litigation risk management for major businesses in Poland.

The key proposals set out in the draft legislation are:

  • At least 10 claimants would be required all of whose claims must be based either on the same facts or on the same material factual circumstances and the same legal grounds.

  • All claims within a group action would have to be unified although, in some circumstances, they need only be unified in sub-groups.

  • Once a group action claim has been brought to court, the court would set a date before which other potential claimants have a right to opt in.

  • Details of every claim would be published in the official court journal (Monitor Sądowy i Gospodarczy) and, at the court's discretion, may also be announced in the press.

  • Claims are brought by a group representative who must be either a member of the group or the municipal consumer ombudsman. The group representative must be legally represented in court.

  • Legal fees may be a percentage of the award (there is no maximum percentage).

  • Cases would be heard by the Regional Court composed of three professional judges.

  • To protect potential defendants against unjustified claims, the court must first decide whether to certify the group action. Its decision can be appealed.

  • As well as having to pay the defendant's costs in unjustified claims, claimants can also be required to pay a deposit of up to 20% of the value of the claim as security for costs.

  • The defendant is given a set period within which it may object to individuals being members of the group (or sub-group).

  • The court may refer the parties to mediation at any stage in the proceedings.

  • As a general rule, the court will also need to approve the terms of any settlement reached. Settlements will not be approved if they don't comply with the law or good morals, constitute an attempt to circumvent the law or blatantly violate the interests of the claimant group.

  • Settlements, which violate the defendant's interests, are not protected, raising concerns that the court will allow 'blackmail settlements', where defendants find it necessary to settle even unjustified claims.

  • Court fees for bringing a group claim are 2% of the value of the claim up to a maximum fee of PLN 100,000.

  • The claimants are required to cover their own costs but it is not clear whether there is any role for third party funders who might agree to pay claimants' costs (and deposit) in return for a percentage of any award.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 23/06/2008.

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