The Council of Ministers of the Spanish Government has approved the Preliminary Draft Law
16 January 2023
16 January 2023
On 20 December 2022 the Council of Ministers approved the Preliminary Draft Law for the Collective Protection of Consumers (the "Draft Law"), which focuses on the defence of consumers' rights, in order for actions brought collectively against a trader whose actions are considered unlawful to be more effective. The Draft Law will be subject to a public hearing up until 18 January 2023, in accordance with the provisions of article 26.6 of Law 50/1997, of 27 November, of the Government.
The Draft Law transposes the Directive 2020/1828 of the European Parliament and the Council of Europe of 25 November (the "Directive") on representative actions for the protection of the collective interests of consumers which aims to improve the regulation of representative actions.
The main new features introduced by the Draft Law are the following:
The Draft Law not only transposes the Directive, but also regulates, in a systematic, unitary and coherent manner, the judicial proceedings in which representative actions will have to be brought, thus overcoming the current dispersion across the Spanish Civil Procedural Act. To this end, the Spanish Civil Procedural Act, the Consolidated Text of the Law for the Defence of Consumers and Users –in relation to the regulation of the qualified entities that would bring actions for the protection of the collective interests of consumers– and other sectoral regulations are amended.
The main issues introduced or modified by the Draft Law are addressed below.
In terms of standing to sue, the Draft Law amends the Consolidated Text of the General Law for the Defence of Consumers and Users. In this regard, the Draft Law specifies that representative actions must be brought by qualified entities, meaning those entities that are registered in the State Register of Consumer and User Associations or in the registers of the autonomous regions and the autonomous cities of Ceuta and Melilla of consumer associations, provided that they meet the appropriate requirements. The intervention of individual consumers and users in collective proceedings is expressly excluded, in order to make these proceedings more effective.
On the other hand, the Draft Law suggests a broad scope of application, covering representative actions brought against any type of infringement by the trader. Among these representative actions, two modalities are distinguished: (i) cease and desist actions –aimed at obtaining the condemnation of the trader to cease his unlawful conduct– and, (ii) actions for damages –through which compensation is requested for the damage suffered by the consumer as a consequence of an unlawful action by the trader–.
A key element of the new regulation is the creation of a Public Register for Representative Actions, the aim of which is to promote transparency and awareness of the representative actions which have been brought, both in general and by their possible beneficiaries. The design of this Register will be developed appropriately by regulation and is considered crucial for the protection of consumer and user rights.
Furthermore, the establishment of a mechanism to access information and sources of evidence in the possession of the opposing party or third parties, which will be subject to the appropriate judicial control, is particularly relevant. Its purpose is to avoid situations of asymmetry of information and evidence.
With regard to the specific provisions that will affect each of the representative actions regulated in the Draft Law, the following should be highlighted due to their novelty and speciality:
In short, with the approval of the Draft Law, it seems that the Spanish Government has complied with the obligation to transpose the Directive on time, respecting and being faithful to its text, introducing, however, an express regulation of the judicial procedure relating to representative actions brought by qualified entities, seeking to establish agile and effective proceedings focused on the defence of the collective interests of consumers.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.