1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

3.3 The representative proceedings and collective actions The ACP legislation provides both the tools of representative and of collective actions. Representative actions are typically initiated by subjects different from the injured customers – typically by NGO´s focused on consumers´ protection and in some other jurisdictions also by specialized organs of state. Collective actions on the other hand are launched by the consumers themselves. In line with the DRA principles, the special role of the consumers’ protection is granted to NGOs. In addition to that, the Czech legislation provides for the possibility of collective claims launched by individual customers independently. The Czech approach does not adopt the concept of the qualified entities being public bodies, such as an ombudsman or specialised governmental institutions, since the ACP places emphasis on the predominant private law character of the collective enforcement of consumer claims. The ACP provides for a wide scope of specific powers granted to the consumer NGOs listed by the European Commission (hereinafter referred to as the “Consumer NGOs” (European Commission, 2020). The Consumer NGOs are exempt from the various duties of the certification process, such as proof of financial capacity or proof of the good standing, and they are also subject to a favourable scheme of court fees. The consumer NGOs are also exempt from the duty to prove the requested minimum quorum for filing the petition that allows for initiation of opt-in procedures without the otherwise required minimum of 10 participating group members and in opt-out proceeding without the otherwise required 100 participating group members. NGOs are also granted the exclusive right to request the disclosure of documents from the defendant and third parties in opt-in proceedings in contrast to other plaintiffs. The correction of the wide-spread idealistic paradigm of NGOs being automatically perceived as totally dedicated, altruistic and independent subjects (Mullenix, 2014) is provided by the safeguarding principles of the ACP. In order to prevent infiltration of ad-hoc NGOs created for the purpose of financing third parties, lawyers or other subjects, a minimum two-year history, good standing and consumer protection activity is required with the above-mentioned exception granted to Consumers NGOs. The scrutiny also importantly includes the conflict-of-interest factors and financial resources control. 3.4 Opt-in and Opt-out dilemma One of the main reasons for the recent panic concerning the ACP legislation was the original implementation of the opt-out system in the initial wide applicability of the ACP bill to, for example, labour cases or business-to-business cases. Even if the risk of mass abuse of opt-out was largely eliminated by limiting the scope of the ACP to consumer protection cases only, the legislative discussions in this matter are still present. The latest draft ACP includes the opt-out mechanism limited to consumer protection litigation restricted by the claim limits of CZK 3,000 (approx. €120) both for representative and collective actions. The initial opt-out motion has to be supported by a minimum of 100 identified members with the above exception concerning the cases launched by Consumers NGOs. The group members of opt-out proceedings are identified by the common issues of facts or law (Spencer, 2012) – in automotive cases

93