Portugal already has a procedural mechanism for representative actions, provided for in Law no. 83/95, of 31 August (the “Class Action Law”), which aims to protect interests relating to the consumption of goods and services, among others. Nevertheless, the Decree-Law no. 114-A/2023, of 5 December, that transposed the Directive (EU) 2020/1828 of the European Parliament and of the Council, of 25 November, on representative actions for the protection of the collective interests of consumers (“Directive 2020/1828”), established a new specific national representative action regime, which will now be the ruling regime whenever there are infringements, committed by professionals, of the provisions of national and European Union (EU) law referred to in Annex I of the Directive 2020/1828, that harm or is likely to harm the collective interests of consumers, with the Class Action Law becoming applicable only on a subsidiary basis. Also, there are several other laws and provisions that explicitly prescribe the right to representative action such as the Portuguese Securities Code, regarding class actions seeking to protect the interests of non-qualified investors in financial instruments (Decree-Law no. 486/99 of 13 November) or the Private Enforcement Law regarding infringements of competition law (Law no. 23/2018 of 5 June).

Both redress measures and injunctive measures may be requested in a representative action.

The available redress measures, apart from compensation, are the reimbursement of the amount paid, price reduction, repair of the goods or termination of the contract, according to the specific case. 

The injunctive measures might be provisional or definitive measures, intended to put an end, or, if that’s the case, to identify or prohibit an unlawful practice by a professional, including the declaration that the practice is unlawful, the obligation to publish the judicial decision (in whole or in part), in the manner determined by the court or by the administrative authority, or the obligation to publish a corrective statement, as well as the obligation by the professional to provide information owed to the consumers.

The judicial costs are only due by the claimant after the final judgment (being the claimant is released from paying initial fees). The claimant is actually exempted from any court costs if the claim is totally or partially upheld. Even if the claim is entirely dismissed, according to the Class Action Act, the claimant will only be sentenced to pay between 10% and 50% of the amount that would normally be due – except where the claims are deemed manifestly unlikely to proceed at an early stage of the proceedings in which case general rules apply - such amount being already quite low because court fees are determined by the value of the proceedings and class actions are typically attributed the value of 60,000 €, irrespectively of the amount that is actually being claimed.

Pursuant to article 24, Decree-Law no. 114-A/2023 is only applicable to future proceedings started after the entry into force of this regime (6 December 2023).

In both domestic and cross-border actions, regarding orders for injunctive measures, the Decree-Law no. 114-A/2023 establishes the opt-out regime, referring to the rules of the Class Action Law, which state that the consumers will have to expressly opt out until the end of the evidential stage of proceedings, which is typically the end of the trial.

However, in orders seeking redress measures, and in compliance with the Directive 2020/1828, the opt-in regime has been expressly established for consumers who do not have their habitual residence in Portugal.

A national entity wishing to be designated as a qualified entity for the purposes of bringing cross-border class actions in other Member States must comply with the following requirements:

1. the exercise by the claimant of an effective public activity to promote the interests of consumers at least in the 12 months prior to the application for designation as a qualified entity;
2. its corporate purpose demonstrates the existence of a legitimate interest in the protection of consumer interests, as provided for in the provisions of the EU legislation referred to in Annex I of the Directive 2020/1828;
3. Non-profit making;
4. The absence of an insolvency process or declaration;
5. The independence and the absence of influence by anyone other than consumers, in particular professionals, who have an economic interest in bringing a representative action, in particular in the case of third-party funding, and adopt procedures to prevent their influence, as well as to prevent conflicts of interest between itself, its funders and the interests of consumers;
6. The public availability of information on compliance with legal requirements, on the sources of funding, the organizational, management and participation structure, the corporate purpose and the activities.

Also, the submission to the competent authority of an application for designation as a qualified entity is instructed with a set of elements, namely:

1. statutes and proof of registration as a legal person of the entity in question;
2. the activity report for the previous two years;
3. declaration on oath of absence of insolvency process or declaration;
4. copies of agreements signed with funding entities;
5. identification of the website (or similar) where the information will be available.

Decree-Law no. 114-A/2023 does not foresee the designation of QEs for the purpose of bringing domestic representative actions but it attributes legal standing to bring domestic representative actions to:

1. associations and foundations, regardless of whether or not they have a direct interest in the action, provided that they meet the requirements set out in Article 6, which are the requirements provided for in the Popular Action Law – the association or foundation must have legal personality, the relevant interest to be protected must be covered by the corporate purpose as set out in its articles of association, the association or foundation cannot carry out an activity that could, in any way, be deemed as competing with an activity carried out by a corporate entity or a liberal professional - adding the independence of the plaintiff and the absence of influence from third parties, in particular professionals, who have an economic interest in bringing a representative action, namely in the case of third-party funding, and the adoption of procedures to prevent their influence, as well as to prevent conflicts of interest between themselves, their funders and the interests of consumers; and
2. the local authorities.

Contrary to other jurisdictions, Portugal does not provide for a class certification process. The court may dismiss the proceedings at an early stage if it considers that the claims are manifestly unlikely to proceed (because it does not aim to protect diffuse interests and/or homogenous individual interests because it is evident that there is no proper class because the claims are notoriously groundless), but such prerogative or power must not be confused with a proper certification phase. Please note that, in recent years, early dismissals have been sporadic, with the courts tending to leave all substantial matters to the final judgment.

It is up to the claimant to identify the class of individuals represented and covered by the claim, and when the interested parties cannot be specifically identified, the summons should refer to the relevant scope of individuals, this scope is determined based on the specific circumstances and features that the individuals have in common – the potential members of the class covered by the claim may be referred to as holders of the relevant interests –, the geographic area where they live or the group or community that they are part of.

Third-party funding has not been regulated in Portugal in any way until the entry into force of Decree-Law no. 114-A/2023 (only applicable to future proceedings) and there has been absolutely no consensus on whether national law allows for the financing of class actions by third parties.

Only the funding of representative actions for redress measures has been regulated, and it has been established that the claimants must make the funding agreement available to the court and that it must guarantee the independence of the claimant and the absence of conflicts of interest. The agreement will have to include a financial summary listing the sources of funding used to support the collective action, and a list of the various costs and expenses that will be borne by the third-party funder.

There is no specific mention of the defendant also receiving a copy, but according to general principles, it should be disclosed to the counterparty. Also, the initial draft foresaw the possibility of the Claimant omitting information, if need be, to safeguard the parties’ equality, which was eliminated from the final version.

For the purpose of allocating the unclaimed damages to the payment of all costs, fees and other expenses incurred by the plaintiff, the remuneration of a third party shall be considered an expense incurred by the claimant as a result of the action.

No specific rules were set out in the Decree-Law no. 114-A/2023 concerning this matter, just as previously there were no special provisions applicable to the settlement of claims/proceedings in class actions, other than the ones providing the possibility of the public prosecutor replacing the claimant in case of settlement as in any case that he considers that interests being represented in the class actions are being harmed (Class Action Act). Other than that, the general requirements set out in the Civil Procedure Code apply. Cases can be settled out of court by the parties and then submitted to the court for approval. The members of a class that have expressly opted out will not be bound by the settlement and the right to opt-out may be exercised until the end of the evidence production stage of the proceedings by submitting a statement to the court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

The disclosure of relevant information on representative actions shall be ensured by the claimants through publishing, on their website relevant information, such as the identification of the representative action at stake, identifying the parties, the claim, the case number and the court, the procedural stage of the representative action, as well as the outcome of the action (overall compensation and method of distribution of the compensation to the represented parties, when applicable), and the decision of the court.

In addition, the Consumers Directorate General (Direção Geral do Consumidor), designated as the competent authority, will also disclose, through its website and the Single Portal for Services (Portal Único de Serviços), information on qualified entities that have been previously designated for the purpose of bringing cross-border representative actions, and on representative actions before the courts, both ongoing and already concluded.

Although the Portuguese civil procedural law does not put forward a discovery regime along the lines of common law countries, the Portuguese Civil Procedure Code foresees that parties shall disclose the documents on which they rely and also sets forth a general duty for all individuals – whether they are parties in the legal action or not – to cooperate in the discovery of the truth. During an ongoing legal action, a party may therefore request the court to order the other party or third parties to submit evidence documents in their possession and although such a request should only be attended when the party asking for it is able to identify the relevant documents and specify the facts it seeks to prove with such documents, this rule has been stretched recently and wider-ranging document requests are becoming more commonplace. Pursuant to the Class Action Law, class action judges are even more independent than in civil procedure actions and are not dependent on the evidence submitted by the parties. Rules governing actions for damages for infringements of competition law may be considered even more permissive allowing for requests of categories of documents.

Regarding the filing of cross-border representative actions by qualified entities from other Member States, the court accepts the lists of qualified entities communicated by the member states to the European Commission as proof of legal standing.

The qualified entities shall provide the court with sufficient information on the consumers represented, identified individually, or, where individualization is not feasible, by category.

They may choose, in each specific case, the procedural means best suited for protecting the interests of consumers from among those available under EU law and Portuguese law, and may apply for injunctive or redress measures, in particular through the same representative action.

In the event of an infringement of EU law that may affect consumers in different Member States, a cross-border class action may be brought before the national courts by several entities.

Unclaimed redress funds, within the reasonable period of time set by the judge, may be used to pay all the costs, fees, and other expenses incurred by the plaintiff in the action.

If, after these costs, fees and expenses of the claimant have been met, there is still compensation remaining, its amount will revert 60% to the Fund for the Promotion of Consumer Rights (Fundo para a Promoção dos Direitos dos Consumidores) and 40% to the Institute for Financial Management and Equipment of Justice (Instituto de Gestão Financeira e Equipamentos da Justiça, I. P.).

None at this time.