Litigation Arbitration & Dispute Resolution EU Directive Actions Guide |
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Denmark |
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(Europe)
Firm
Kromann Reumert
Contributors
Kathe Nielsen |
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| Representative Action Mechanisms: Does a collective action mechanism already exists in your jurisdiction, and if so, is the Directive implemented as a part of or as a separate mechanism? | A collective action scheme is already in force under the Danish Administration of Justice Act. To initiate a collective action under the rules set out in the Danish Administration of Justice Act, the claims must relate to a common legal or factual issue that arises out of similar circumstances for a group of people (more than one person), and Denmark must be the venue for such claims. In addition, the group must satisfy the requirements for legal actions, meaning that each individual or organization bringing the claim must have a legal interest in the outcome of the case. Also, potential group members must be identifiable. The group must appoint a representative who will act as the main point of contact for the court and other parties involved in the case. The court may only allow a collective action to proceed if it finds that the claims have a sufficient commonality and that collective action is the most appropriate way to handle the claims. The court may also limit the scope of the action, such as by specifying which claims or parties are included. If the group action is successful, any damages awarded are divided among the group members in proportion to their individual losses. The court may also award attorneys' fees and costs to the prevailing party. The Directive will be implemented in Denmark by the passing of a bill on representative actions for the protection of the collective interests of consumers (the "Act") which will apply parallelly to the current Danish system for collective actions. The bill was passed on April 20, 2023, and entered into force on 25 June 2023. Collective actions subject to the Act are also subject to the general rules of civil procedures and collective actions set out in the Danish Administration of Justice Act unless otherwise described. Both systems provide for judicial procedures with the Danish courts. Our following answers will, to the extent possible and relevant, contain a description of both the existing Danish rules under the Danish Administration of Justice Act and the new rules under the Act. Where the rules differ, this will be pointed out. |
| Claims which can be brought in a Representative Action: Which claims can be brought? Which redress measures are available other than compensation? | From a general point of view, Danish legislation contains no rules as to which claims can be brought to court or in collective action. However, the claim must be lawful and suitable for judicial adjudication. Also, the party bringing in the claim must have a current and real interest in the case (i.e., the case must be relevant to the party's legal position). The Act accommodates that the court, besides compensation, can order the trader to give consumers remedies of repair, replacement, price reduction, contract termination, or reimbursement of the price paid. Consumers who did not join the collective action can bring out other claims against the trader for disregarding the judgment following the collective action. |
| Costs: To what extent must the unsuccessful party pay the costs of the proceedings, must they pay all costs or only a part of them, and if so, which part? | In general, the losing party must, upon a decision from the court, pay the costs of the proceedings unless otherwise ordered by the court. The exact amount is decided by the court based on the value of the case (subject to official guidelines), however, the winning party is rarely fully reimbursed for its costs. In a collective action, the same general rules apply and the whole group or individual group members can be ordered by the court to pay the costs of the proceedings. Collective actions under the Act follow the general Danish rules on costs of proceedings. The Act only contains specific regulations on the costs of proceedings for actions for declaratory relief. Thus, consumers in a collective action for declaratory relief cannot be ordered to pay the costs of the proceedings, unless under exceptional circumstances where the court may order consumers to pay costs of the proceedings incurred due to their intentional or negligent behavior. |
| Transitional Law: Are there any peculiarities regarding national transitional provisions in relation to Article 22? | The Act entered into force on 25 June 2023 and applies to collective actions (if applicable) filed from that date. The existing Danish system of collective actions under the Danish Administration of Justice Act continues to be in force. |
| Opt-in vs opt-out: How are opt-in/opt-out mechanisms regulated (in particular, whether in the context of an order for redress – both domestic and cross-border – claims are permitted on an opt-in or an opt-out basis)? | Under the existing rules in the Danish Administration of Justice Act collective actions are opt-in actions, and group members must actively register for membership. There is a narrow exception, as it is possible to file an opt-out if the claim consists of a lot of small claims which obviously cannot be expected to be pursued by individual lawsuits. For actions on declaratory relief subject to the Act, only opt-in will be permissible. The Act does not differ between domestic and cross-border actions. For actions on injunctions, opt-out will also be permitted. |
| Qualified Entities (QEs): What criteria apply to the designation of QEs, with special regard to the designation of QEs for the purpose of bringing domestic representative actions? | Under the existing rules on collective actions set out in the Danish Act on Administration of Justice, group representatives are appointed on an ad hoc basis by the court or pre-approved (authorities and organizations) according to law. Under the Act authorities and organizations can request the Ministry of Industry, Business and Financial Affairs to be included on a list of pre-approved group representatives, and the group representative cannot be appointed on an ad hoc basis by the court. Pre-approval requires that certain standards are met, e.g., the organization must be independent and non-profit, and the purpose of the organization should have been consumer protection for the last 12 months. |
| Class Criteria/Certification: What is the class criteria/certification stage applicable to representative actions, including provisions, if any, that give substance to the requirement “to dismiss manifestly unfounded cases at the earliest possible... | The claims must relate to a common legal or factual issue that arises out of similar circumstances, and the claims need not be identical. The same criteria will apply to group actions under the Act. |
| Third-Party Litigation Funding: Please describe how third-party funding is regulated, with special regard to funding of representative actions for redress measures. Can the court order the representative organization to disclose the funding agreem... | Under the general Danish rules on legal proceedings, third parties can fund legal actions. If the counterparty requests the court to do so, the court can order a party to disclose the funding agreement subject to the general rules on disclosure (see our response to "Discovery/Disclosure"), and the counterparty party will in such case - from a starting point - receive a copy of the said agreement. Under the Act approved organizations may have proceedings on declaratory relief financed by a third party if no conflict of interests (or risk of such) appears. |
| Redress Settlements: How are settlements regulated, with special regard to “rules according to which individual consumers concerned by the action and by the subsequent settlement are given the possibility to accept or to refuse to be bound by sett... | Under the general Danish rules on collective actions settlements on the claims covered by a collective action must be approved by the court. However, it is not a requirement that the settlement is stated in the court's record. The settlement must not discriminate against group members or otherwise be obviously unreasonable. The parties and group members are bound by the settlement once it has been approved by the court. Group members are notified of the settlement by the court or in another manner as decided by the court. Independently of the court case, any group member can settle his own claim, or independently or together with more group members give the group representative power of attorney to enter into a settlement on their behalf regarding their specific claims. Such settlement entered by the group members in question and not the whole group shall not be approved by the court. Under the Act, the group representative and the trader may submit to the court a joint proposed settlement on redress in favor of the registered consumers. If the court approves the settlement, it becomes binding for the parties and the registered consumers. The Act contains no provisions on the possibility for the consumers to accept or refuse to be bound by such settlement. Remedies contained in an approved settlement on redress do not affect other remedies to which consumers have access and which were not subject to the settlement. |
| Public Information/Database of Representative Actions: How are the publication of information and database of representative actions regulated, with special regard to any requirement of judicial vetting (e.g. court-approved description of the acti... | Under the existing Danish rules on collective actions information on actions must be given in the manner decided by the court. The court may decide that information can be given by public announcement, and the court itself gives notice of the court's ruling. Under the Act approved authorities and organizations must publish information on the collective actions they have decided to file under the Act, the status of filed actions, and the result of said actions on its website. The Act itself contains no requirement as to timing, etc. but in the preparatory works, it is stated that information on actions not yet filed shall be published when relevant and appropriate and in a sufficient and comprehensible manner. Status on pending actions must be published continuously. |
| Discovery/Disclosure: Are there any special discovery/disclosure rules applicable to representative actions, or collective (non-unitary) actions in general? If there are no such rules either, please briefly refer to the general discovery/disclosur... | The Act contains no specific regulation on discovery/disclosure. Under the Administration of Justice Act, the court can (but shall not) order disclosure of documents from a party by request from another party. There are no formal requirements for such request to disclosure documents. A party cannot be forced to disclose documents under the rules on civil procedures, but it can have adverse inferences on the trial if the documents are not disclosed as ordered by the court. Disclosure is subject to the same limitation rules as for the duty to witness in court. i.e., limitations in regard to a person's "closest" and limitations for legal privilege. |
| Cross-Border Actions: Are there any procedural mechanisms and other requirements for cross-border representative actions? | The Act respects approvals by authorities and organizations made by other EU Member States. Cross-border collective actions can be filed with the Danish courts by authorities and organizations approved by other EU Member States and included on the European Commission's list of such approved authorities and organizations provided that the collective action is covered by the purpose of the approved organization or authority, and that Danish courts hold jurisdiction over the claims. |
| Cy près Awards: Are there any rules “on the destination of any outstanding redress funds that were not recovered within the established time limits”? | Neither the Act nor the Danish Administration of Justice Act contains rules on cy près. |
| Other: Please provide any further comment that you deem worthy of note. | None at this time. |
Litigation Arbitration & Dispute Resolution EU Directive Actions Guide
A collective action scheme is already in force under the Danish Administration of Justice Act.
To initiate a collective action under the rules set out in the Danish Administration of Justice Act, the claims must relate to a common legal or factual issue that arises out of similar circumstances for a group of people (more than one person), and Denmark must be the venue for such claims.
In addition, the group must satisfy the requirements for legal actions, meaning that each individual or organization bringing the claim must have a legal interest in the outcome of the case. Also, potential group members must be identifiable. The group must appoint a representative who will act as the main point of contact for the court and other parties involved in the case.
The court may only allow a collective action to proceed if it finds that the claims have a sufficient commonality and that collective action is the most appropriate way to handle the claims. The court may also limit the scope of the action, such as by specifying which claims or parties are included.
If the group action is successful, any damages awarded are divided among the group members in proportion to their individual losses. The court may also award attorneys' fees and costs to the prevailing party.
The Directive will be implemented in Denmark by the passing of a bill on representative actions for the protection of the collective interests of consumers (the "Act") which will apply parallelly to the current Danish system for collective actions. The bill was passed on April 20, 2023, and entered into force on 25 June 2023.
Collective actions subject to the Act are also subject to the general rules of civil procedures and collective actions set out in the Danish Administration of Justice Act unless otherwise described.
Both systems provide for judicial procedures with the Danish courts.
Our following answers will, to the extent possible and relevant, contain a description of both the existing Danish rules under the Danish Administration of Justice Act and the new rules under the Act. Where the rules differ, this will be pointed out.
From a general point of view, Danish legislation contains no rules as to which claims can be brought to court or in collective action. However, the claim must be lawful and suitable for judicial adjudication. Also, the party bringing in the claim must have a current and real interest in the case (i.e., the case must be relevant to the party's legal position).
The Act accommodates that the court, besides compensation, can order the trader to give consumers remedies of repair, replacement, price reduction, contract termination, or reimbursement of the price paid.
Consumers who did not join the collective action can bring out other claims against the trader for disregarding the judgment following the collective action.
In general, the losing party must, upon a decision from the court, pay the costs of the proceedings unless otherwise ordered by the court. The exact amount is decided by the court based on the value of the case (subject to official guidelines), however, the winning party is rarely fully reimbursed for its costs.
In a collective action, the same general rules apply and the whole group or individual group members can be ordered by the court to pay the costs of the proceedings.
Collective actions under the Act follow the general Danish rules on costs of proceedings. The Act only contains specific regulations on the costs of proceedings for actions for declaratory relief. Thus, consumers in a collective action for declaratory relief cannot be ordered to pay the costs of the proceedings, unless under exceptional circumstances where the court may order consumers to pay costs of the proceedings incurred due to their intentional or negligent behavior.
The Act entered into force on 25 June 2023 and applies to collective actions (if applicable) filed from that date. The existing Danish system of collective actions under the Danish Administration of Justice Act continues to be in force.
Under the existing rules in the Danish Administration of Justice Act collective actions are opt-in actions, and group members must actively register for membership. There is a narrow exception, as it is possible to file an opt-out if the claim consists of a lot of small claims which obviously cannot be expected to be pursued by individual lawsuits.
For actions on declaratory relief subject to the Act, only opt-in will be permissible. The Act does not differ between domestic and cross-border actions. For actions on injunctions, opt-out will also be permitted.
Under the existing rules on collective actions set out in the Danish Act on Administration of Justice, group representatives are appointed on an ad hoc basis by the court or pre-approved (authorities and organizations) according to law.
Under the Act authorities and organizations can request the Ministry of Industry, Business and Financial Affairs to be included on a list of pre-approved group representatives, and the group representative cannot be appointed on an ad hoc basis by the court. Pre-approval requires that certain standards are met, e.g., the organization must be independent and non-profit, and the purpose of the organization should have been consumer protection for the last 12 months.
The claims must relate to a common legal or factual issue that arises out of similar circumstances, and the claims need not be identical. The same criteria will apply to group actions under the Act.
Under the general Danish rules on legal proceedings, third parties can fund legal actions. If the counterparty requests the court to do so, the court can order a party to disclose the funding agreement subject to the general rules on disclosure (see our response to "Discovery/Disclosure"), and the counterparty party will in such case - from a starting point - receive a copy of the said agreement.
Under the Act approved organizations may have proceedings on declaratory relief financed by a third party if no conflict of interests (or risk of such) appears.
Under the general Danish rules on collective actions settlements on the claims covered by a collective action must be approved by the court. However, it is not a requirement that the settlement is stated in the court's record. The settlement must not discriminate against group members or otherwise be obviously unreasonable. The parties and group members are bound by the settlement once it has been approved by the court. Group members are notified of the settlement by the court or in another manner as decided by the court.
Independently of the court case, any group member can settle his own claim, or independently or together with more group members give the group representative power of attorney to enter into a settlement on their behalf regarding their specific claims. Such settlement entered by the group members in question and not the whole group shall not be approved by the court.
Under the Act, the group representative and the trader may submit to the court a joint proposed settlement on redress in favor of the registered consumers. If the court approves the settlement, it becomes binding for the parties and the registered consumers. The Act contains no provisions on the possibility for the consumers to accept or refuse to be bound by such settlement.
Remedies contained in an approved settlement on redress do not affect other remedies to which consumers have access and which were not subject to the settlement.
Under the existing Danish rules on collective actions information on actions must be given in the manner decided by the court. The court may decide that information can be given by public announcement, and the court itself gives notice of the court's ruling.
Under the Act approved authorities and organizations must publish information on the collective actions they have decided to file under the Act, the status of filed actions, and the result of said actions on its website.
The Act itself contains no requirement as to timing, etc. but in the preparatory works, it is stated that information on actions not yet filed shall be published when relevant and appropriate and in a sufficient and comprehensible manner. Status on pending actions must be published continuously.
The Act contains no specific regulation on discovery/disclosure.
Under the Administration of Justice Act, the court can (but shall not) order disclosure of documents from a party by request from another party. There are no formal requirements for such request to disclosure documents. A party cannot be forced to disclose documents under the rules on civil procedures, but it can have adverse inferences on the trial if the documents are not disclosed as ordered by the court.
Disclosure is subject to the same limitation rules as for the duty to witness in court. i.e., limitations in regard to a person's "closest" and limitations for legal privilege.
The Act respects approvals by authorities and organizations made by other EU Member States.
Cross-border collective actions can be filed with the Danish courts by authorities and organizations approved by other EU Member States and included on the European Commission's list of such approved authorities and organizations provided that the collective action is covered by the purpose of the approved organization or authority, and that Danish courts hold jurisdiction over the claims.
Neither the Act nor the Danish Administration of Justice Act contains rules on cy près.
None at this time.