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.
