The Spanish Path to a new collective actions’ regime: The Draft Law, proposed amendments and the late suppression of collective actions’ legal framework from the Draft Law

Spain is one of those Member States that hasn’t transposed the Representative Action Directive (RAD) yet and it looks further than a couple of days ago. Nonetheless, we hope the wait will be worth it.

The first step towards a new collective action regime was taken on the 20th of December 2022, when the “Preliminary Draft on Representative Actions for the Protection of Consumers’ Collective Interests” was approved. The following step was taken on the 12th of March 2024, when the “Draft Law on Efficiency Measures of the Public Service of Justice and Collective Actions for the Protection and Defense of Consumers’ and Users’ Rights and Interests” was approved and substituted the previous one with some ‘subtle’ changes. These modifications mainly affected time limits, amplifying them. Since the approval of the Draft Law, the proposed collective actions system has overcome a motion for its rejection, but it hasn’t survived the parliamentary debate on the amendments proposed up to this summer, which took place on the 4th of November 2024. The Spanish Congress (the lower chamber of the Spanish Parliament) has erased the block of collective actions from the Draft law, arguing that the RAD’s transposition and measures on efficiency must be ruled and approved in different legal texts. Thus, currently, we are ‘orphans’ of any draft regarding collective actions.

The block erased from the Draft Law aimed to introduce a new title in Book IV of the Civil Procedural Law (articles 828 to 885 Civil Procedure Law or CPL) and some changes in the Consumer Protection Act, among others. We hope the implementation of the RAD to be based on this deleted text and its proposed amendments.

In the following lines, we will present some of the main characteristics the Draft aimed to establish:

• The system was aimed to be limited to the protection of consumers’ and users’ rights and interests. Nonetheless, with a scope not restricted to the RAD’s Annex. The new regime was supposed to be applied to ‘every misconduct which harms or could harm consumers and users’ (proposed article 828 CPL).

• This model recognized legal standing to the Public Prosecutor (Spanish Ministerio Fiscal); enabled consumers’ and users’ associations; the General Directorate for Consumer Affairs, the bodies or entities of the autonomous communities and local corporations responsible for consumer and user protection; and, qualified entities enabled in other Member States (proposed article 835 CPL and proposed article 54 Consumer Protection Act).

• It introduced an access to evidence mechanism, similar to the one created by the transposition of Directive 2014/104/EU on competition law (proposed article 838 CPL).

• It was foreseen a certification phase for redress collective actions (proposed articles 846 and 847 CPL). The Court would order a certification audience where it would decide the alleged procedural issues (lack of jurisdiction, lack of legal standing requirements…), assess the homogeneity or commonality of the claims and that the action is not manifestly baseless. The fulfilment of these requirements would lead to the certification of the action. In this audience, it was foreseen also to discuss the objective and subjective scope of the action and the adequacy of the funding used. The judicial decision ordering or rejecting the certification could be directly appealed (proposed article 855 CPL).

• The representation model to be implemented was hybrid or mixed. In a nutshell, the general rule was an opt-out mechanism. Nonetheless, there were foreseen two exceptions to this rule, one optional and the other mandatory. An opt-in mechanism could be implemented, ‘exceptionally’, by the court, if attending to the circumstances of the case, it considered this mechanism necessary for a better administration of justice, and only if the quantity sought for each consumer was higher than 3.000 euros (the preliminary draft established 5.000 euros minimum). An opt-in mechanism would also be applied to consumers and users represented by the action but residing habitually outside Spain (proposed article 848 CPL, sections 2, 3 and 4).

However, in this regard, several amendments were presented by the Spanish Congress’ parliamentary groups. There was a proposal that aimed to leave to the plaintiff the decision of which representative model to use (Sumar Parliamentary Group); a proposal to modify the first exception and instead of requiring ‘a better administration of justice’ and a minimum quantity cumulatively, to require it alternatively (Socialist Parliamentary Group);  a proposal to decrease the minimum to 1.500 euros and to erase the requirement of ‘better administration of justice’ (Basque Parliamentary Group)  and a proposal to abolish the opt-out mechanism and to establish an opt-in system (Vox Parliamentary Group and Popular Parliamentary Group in Congress).

• Third-party funding was expressly admitted and subject to judicial control (proposed article 850 CPL). However, the Draft law did not regulate TPF. In the erased proposal the plaintiff must have submitted a ‘complete exposition’ of the funding resources used to fund the action with the plaint. The plaintiff would just have to disclose the full third-party funding agreement if the court required it in an audience in which the confidential information would be protected. If the court decided that the terms of the agreement were disproportionate to the detriment of consumers and users, the court would require the plaintiff and the third funder to modify the agreement.

• The Draft Law’s text did not limit the funders’ success fee to a specific percentage of the eventual total recovery. Nonetheless, there was an amendment proposing to limit the recoverable amount to 30% of the total amount recovered or to 200% of the funding provided to the plaintiff (Socialist Parliamentary Group).  

• Settlements were, for the first time, expressly foreseen and regulated for redress representative actions. The regime distinguished the regulation of settlement achieved before and after the certification of the action (proposed articles 864-872 Code of Civil Procedure).

• Regarding distribution and execution, the draft distinguished, among collective redress actions seeking monetary relief, the ones in which all the members of the groups were identified and cases in which not. In the first scenario, it was foreseen a direct payment by the defendant but, subsidiarily, members could request execution of their right (proposed articles 873-874 CCP). In the second scenario, the draft foresaw the constitution of a fund (total amount debt). The court would appoint an independent liquidator to administer the payments. After the distribution phase, the liquidator would present the accountability of the distribution to the judge, which was required to be approved. If some unclaimed amounts remained, it was established that these would be returned to the defendant (proposed articles 875-881 Code of Civil Procedure).

All in all, despite some elements of the proposed transposition could be discussed, it was, with no doubt, a step forward in the Spanish legal system to enforce collective actions, since the current framework is quite fragmented and confusing, essentially, when talking about collective redress.  We hope this setback not to be a step back, and soon, to have a collective action system mainly based on the text erased.

The Draft Law is available here.

The proposed amendments to the Draft Law are gathered here.

The session record of the parliamentary debate celebrated on the 4th of November 2024, where the block regarding collective actions was erased, can be found here.