Litigation Arbitration & Dispute Resolution EU Directive Actions Guide |
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Latvia |
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(Europe)
Firm
Ellex Klavins
Contributors
Katrina Eimane |
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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? | Until now, there have been no representative (collective) action mechanisms in Latvia. The Consumer Rights Protection Law (henceforth – "CRPL") provides certain rights to the Consumer Rights Protection Center and to the associations for consumer rights protection to represent the consumers’ interests, but they do not work as collective action mechanisms. Also, an actio popularis is provided in the Environmental Protection Law, whereby any member of the public, including associations, is entitled to contest acts of state or local government institutions in administrative proceedings if such acts do not meet the requirements of environmental laws or create threats of damage or environmental damage, but these are not considered collective actions as well. The Directive 2020/1828 is implemented as a separate mechanism via amendments to the CRPL and via amendments to the Civil Procedure Law (henceforth – "CPL"), which entered force on 15 October 2023. The amendments provide the competence of the court of general jurisdiction to review consumers’ collective claims brought by a qualified institution. |
| Claims which can be brought in a Representative Action: Which claims can be brought? Which redress measures are available other than compensation? | Collective actions can be brought for compensation for damages done to the consumers or for establishing and stopping violation of their rights, together with the compensation for damages. Violation of the collective interests of consumers may be established by the court, the Consumer Rights Protection Center or another relevant supervisory and control institution. |
| 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? | Standard rules of CPL apply to the costs of the proceedings in the collective consumer actions. The obligation of the unsuccessful party to fully pay the court expenses is established in Article 41 (1) of the CPL. In case the claim is partially satisfied, then the court expenses are paid by both parties proportionally to the amount of the satisfied and rejected claims. The principle for reimbursement of the attorney’s fees is the same, but the rules are more detailed, for example, there are caps depending on the amount of the claim (Article 44(1) of CPL). Additionally, the qualified entity during litigation may request the court to recover from the respondent expenses related to the collective action, meaning expenses on informing consumers regarding the action. The Cabinet of Ministers has adopted a regulation, providing that the maximum amount of expenses that may be recovered is EUR 10,000. |
| Transitional Law: Are there any peculiarities regarding national transitional provisions in relation to Article 22? | There are no national transitional provisions relating to collective actions. |
| 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)? | Claims are permitted on an opt-in basis. The consumer shall submit an application to the qualified institution, indicating certain information, such as the basis for the claim for compensation, and consent to the qualified institution to represent the consumer and others (Article 26 of CRPL). According to Articles 26 (4) and (5) of CRPL, if a registration fee is determined for participation in the collective action, then the consumer shall have to pay this fee within the term set by the institution. Otherwise, his participation will be refused. Article 26 of the CRPL defines the consumer's right to withdraw from the collective action if he does not agree to the settlement. If the consumer withdraws, the registration fee is not refunded. |
| 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? | Article 23 of the CRPL determines that if the association representing consumer interests wants to obtain the status of a qualified institution permanently or for a specific claim (ad hoc), the association will have to submit a request to the Consumer Rights Protection Center. The request must certify that the association complies with the criteria established in Article 4 (3) of the Directive 2020/1828. After that, the Consumer Rights Protection Center decides on the granting of status in accordance with the Administrative Procedure Law. |
| 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... | Article 26 (1) of the CRPL stipulates that the qualified institution can file a collective action in court, if 1) at least five consumers have been approved in the consumer collective action; 2) consumer claims are against the same defendant or defendants; 3) consumer claims are based on the same or similar factual and legal circumstances. Requirements of Article 7 (7) of the Directive 2020/1828 regarding dismissing of manifestly unfounded cases are implemented through Article 23 (3) of the CRPL in case of administrative proceedings. With regard to courts, Article 132 of the CPL already provides ten situations when the court has the right to refuse to accept the claim in case of some obvious faults. |
| 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... | Article 26 of the CRPL provides that the expenses of the qualified institutions related to the consumer collective action can be covered from the state budget funds, which are allocated to the Consumer Rights Protection Center. The conditions for granting funding, including for legal proceedings, will be determined in separate regulations of the Cabinet of Ministers. There is no requirement to disclose the funding agreement to the defendant or any other party. However, Article 26 of the CRPL determines that the qualified institution must disclose to the court and the Consumer Rights Protection Center a financial report, that lists the sources of funds used to support the consumer collective action if the court or the Consumer Rights Protection Center has doubts about the conflict of interest of the financier of the institution. |
| 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... | The requirements of Article 11 (4) of the Directive 2020/1828, first implemented in Article 26 (1) of the CRPL, provide that if the consumer does not agree to the settlement reached, he is able to withdraw from the consumer class action and will not be included in the settlement. On the other hand, the fact that the settlement will be binding on the plaintiff, the defendant and the consumers involved in the case will be determined by Article 250 (2) of the CPL. |
| 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... | Article 26 of the CRPL provides that the qualified institution shall publish information on inviting consumers to apply for a collective action. The institution must also notify the Consumer Rights Protection Center, which in turn will publish the information on its website and social networks. Article 26 of the CRPL stipulates that the qualified institution shall inform those consumers, who are participating in the collective action, about the court judgment, offered settlements and other aspects of the proceedings. Other types of databases are not envisaged in the CRPL or CPL amendments. |
| 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... | In the context of Article 18 of the Directive 2020/1828, there is already a general procedural regulation on the request for evidence in Articles 93 (2), 112 and 116 of the CPL, which provide for the right of a party who does not have specific evidence relevant to the case to ask the court to request this evidence from state or municipal institutions and other natural or legal persons. The party requesting the evidence shall describe such evidence and provide reasons for presuming that the evidence is in the possession of the respective person. In the case of written evidence, if a party refuses to submit the evidence requested by the court, without denying that the party possesses such evidence, the court may find as proved facts that the opposite party sought to prove by referring to such evidence. |
| Cross-Border Actions: Are there any procedural mechanisms and other requirements for cross-border representative actions? | Article 23 of CRPL stipulates that the list of permanently qualified institutions published by the European Commission will be considered sufficient evidence to confirm the right of the relevant institution to bring a collective consumer action in court. It does not prevent the court from verifying that the aim established in the articles of association of the qualified institution justifies bringing the collective action. |
| Cy près Awards: Are there any rules “on the destination of any outstanding redress funds that were not recovered within the established time limits”? | As can be seen from the annotation of the amendments to the CRPL, the CRPL will not provide provisions on the destination of any outstanding redress funds that are not recovered within the established time limits. |
| Other: Please provide any further comment that you deem worthy of note. | None at this time. |
Litigation Arbitration & Dispute Resolution EU Directive Actions Guide
Until now, there have been no representative (collective) action mechanisms in Latvia. The Consumer Rights Protection Law (henceforth – "CRPL") provides certain rights to the Consumer Rights Protection Center and to the associations for consumer rights protection to represent the consumers’ interests, but they do not work as collective action mechanisms. Also, an actio popularis is provided in the Environmental Protection Law, whereby any member of the public, including associations, is entitled to contest acts of state or local government institutions in administrative proceedings if such acts do not meet the requirements of environmental laws or create threats of damage or environmental damage, but these are not considered collective actions as well.
The Directive 2020/1828 is implemented as a separate mechanism via amendments to the CRPL and via amendments to the Civil Procedure Law (henceforth – "CPL"), which entered force on 15 October 2023. The amendments provide the competence of the court of general jurisdiction to review consumers’ collective claims brought by a qualified institution.
Collective actions can be brought for compensation for damages done to the consumers or for establishing and stopping violation of their rights, together with the compensation for damages. Violation of the collective interests of consumers may be established by the court, the Consumer Rights Protection Center or another relevant supervisory and control institution.
Standard rules of CPL apply to the costs of the proceedings in the collective consumer actions. The obligation of the unsuccessful party to fully pay the court expenses is established in Article 41 (1) of the CPL. In case the claim is partially satisfied, then the court expenses are paid by both parties proportionally to the amount of the satisfied and rejected claims. The principle for reimbursement of the attorney’s fees is the same, but the rules are more detailed, for example, there are caps depending on the amount of the claim (Article 44(1) of CPL).
Additionally, the qualified entity during litigation may request the court to recover from the respondent expenses related to the collective action, meaning expenses on informing consumers regarding the action. The Cabinet of Ministers has adopted a regulation, providing that the maximum amount of expenses that may be recovered is EUR 10,000.
There are no national transitional provisions relating to collective actions.
Claims are permitted on an opt-in basis. The consumer shall submit an application to the qualified institution, indicating certain information, such as the basis for the claim for compensation, and consent to the qualified institution to represent the consumer and others (Article 26 of CRPL).
According to Articles 26 (4) and (5) of CRPL, if a registration fee is determined for participation in the collective action, then the consumer shall have to pay this fee within the term set by the institution. Otherwise, his participation will be refused.
Article 26 of the CRPL defines the consumer's right to withdraw from the collective action if he does not agree to the settlement. If the consumer withdraws, the registration fee is not refunded.
Article 23 of the CRPL determines that if the association representing consumer interests wants to obtain the status of a qualified institution permanently or for a specific claim (ad hoc), the association will have to submit a request to the Consumer Rights Protection Center. The request must certify that the association complies with the criteria established in Article 4 (3) of the Directive 2020/1828. After that, the Consumer Rights Protection Center decides on the granting of status in accordance with the Administrative Procedure Law.
Article 26 (1) of the CRPL stipulates that the qualified institution can file a collective action in court, if 1) at least five consumers have been approved in the consumer collective action; 2) consumer claims are against the same defendant or defendants; 3) consumer claims are based on the same or similar factual and legal circumstances.
Requirements of Article 7 (7) of the Directive 2020/1828 regarding dismissing of manifestly unfounded cases are implemented through Article 23 (3) of the CRPL in case of administrative proceedings. With regard to courts, Article 132 of the CPL already provides ten situations when the court has the right to refuse to accept the claim in case of some obvious faults.
Article 26 of the CRPL provides that the expenses of the qualified institutions related to the consumer collective action can be covered from the state budget funds, which are allocated to the Consumer Rights Protection Center. The conditions for granting funding, including for legal proceedings, will be determined in separate regulations of the Cabinet of Ministers.
There is no requirement to disclose the funding agreement to the defendant or any other party. However, Article 26 of the CRPL determines that the qualified institution must disclose to the court and the Consumer Rights Protection Center a financial report, that lists the sources of funds used to support the consumer collective action if the court or the Consumer Rights Protection Center has doubts about the conflict of interest of the financier of the institution.
The requirements of Article 11 (4) of the Directive 2020/1828, first implemented in Article 26 (1) of the CRPL, provide that if the consumer does not agree to the settlement reached, he is able to withdraw from the consumer class action and will not be included in the settlement. On the other hand, the fact that the settlement will be binding on the plaintiff, the defendant and the consumers involved in the case will be determined by Article 250 (2) of the CPL.
Article 26 of the CRPL provides that the qualified institution shall publish information on inviting consumers to apply for a collective action. The institution must also notify the Consumer Rights Protection Center, which in turn will publish the information on its website and social networks.
Article 26 of the CRPL stipulates that the qualified institution shall inform those consumers, who are participating in the collective action, about the court judgment, offered settlements and other aspects of the proceedings.
Other types of databases are not envisaged in the CRPL or CPL amendments.
In the context of Article 18 of the Directive 2020/1828, there is already a general procedural regulation on the request for evidence in Articles 93 (2), 112 and 116 of the CPL, which provide for the right of a party who does not have specific evidence relevant to the case to ask the court to request this evidence from state or municipal institutions and other natural or legal persons. The party requesting the evidence shall describe such evidence and provide reasons for presuming that the evidence is in the possession of the respective person. In the case of written evidence, if a party refuses to submit the evidence requested by the court, without denying that the party possesses such evidence, the court may find as proved facts that the opposite party sought to prove by referring to such evidence.
Article 23 of CRPL stipulates that the list of permanently qualified institutions published by the European Commission will be considered sufficient evidence to confirm the right of the relevant institution to bring a collective consumer action in court. It does not prevent the court from verifying that the aim established in the articles of association of the qualified institution justifies bringing the collective action.
As can be seen from the annotation of the amendments to the CRPL, the CRPL will not provide provisions on the destination of any outstanding redress funds that are not recovered within the established time limits.
None at this time.