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CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

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Page 1: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES

Actions taken by DECO - Portuguese Association for Consumer Protection

Page 2: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Collective Redress Mechanisms in Portugal/Ação Popular

Page 3: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

“Ação Popular” (Popular Action)

What is?It´s an opt-out mechanism of general application, amounting to a representative collective action that will proceed through the court system.

Legal BasisPortuguese Constitution and National Laws

Who can initiate the procedure?Individual citizens, organizations and the “Ministério Público” (Public Prosecutor)

Page 4: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

“Ação Popular” (Popular Action)

Types of Disputes/Main AreasPublic Health, Quality of Life, Preservation of the cultural and environmental heritage and consumer rights.

RemediesMaterial and non material damages and compensation. It does not cover punitive and exemplary damages.

CostsConsumers are exempted from the cost of preliminary preparations in bringing the case.

Claimants are obliged to pay 10-50% of the court fees (as determined by the judge) if the case is lost. If the case is won, the court fees will be waived in full.

The defendant will always be obliged to pay court fees regardless of whether or not it wins.

Page 5: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

“Ação Popular” (Popular Action)

The procedureThe procedure - It should be filed on one of the procedure forms of our judicial code (a less formal version of the general regime)

- It begins with the presentation of the initial petition in courts and should conform to the general formal requirements imposed by the law.

- Consumers/citizens are called to exclude themselves (in an advertisement published by the media).

- Judges are not confined to the evidence presented in court by the parties.

- The “Ministério Público” also monitors the procedure in order to guarantee the procedure.

- The process will follow the general process in terms of appeal.

Page 6: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Actions Taken by DECO(Material Damages and Compensation)

Page 7: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

The Portugal Telecom case

In 1999 Portugal Telecom (Portuguese Telecommunications operator) introduced an activation fee which contravened our Telecommunication services law.

 

DECO brought-up a group action against PT, who was ordered to refund the activation fee to all consumers concerned. This amounted to € 120 million.

 

Due to practical difficulty of financially compensating each of the consumers affected (almost 2 million), DECO and PT agreed that the last one would guarantee all consumers free weekend phone calls for a stipulated time period.

Page 8: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

The Carmen case

In 1999, just before a high-demand concert performance of Operama Carmen in Lisbon, the media announced that the famous lead singer would not appear. Most consumers wanted full reimbursement of their tickets (the average price was € 163).

 

DECO brought-up a group action representing all affected consumers. Simultaneously DECO and the companies involved entered in negotiations in order to compensate consumers. However, given the duration of this procedure, these companies used this time to disappear and avoid reimbursement to the affected consumers.

Page 9: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

The English Opening-School case

An English school - “Opening-School” - systematically required payment in advance of classes. More than 50% of consumers used to pay these classes through a credit provider (BBVA). When the school closed abruptly and went bankrupt, consumers were asked by the credit provider to continue their payments in its entirety.

 

DECO brought-up a group action representing all affected consumers aiming to rescind the credit contracts due to the school´s shutdown. The court´s decision fully recognized the complaints and ordered the refund of the payments made after the shutdown.

Page 10: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

The “Águas do Planalto” case

The water service company Águas do Planalto, in face of a very cold winter that damaged some water meters, charged € 107 for each replacing service, which contravened the utilities sector´s law. 1800 consumers were affected by this company.

 

DECO brought-up a group action representing all affected consumers. All were fully reimbursed by the company.

Page 11: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

The “Afinsa” case

In 2006, the Spanish company Afinsa (one of the largest collectibles company) went bankrupt, and in Portugal, more than 3.000 consumers lost their private investments.

DECO, through its congener OCU, brought-up a group action representing, in Spain, all the portuguese affected consumers in an insolvency procedure, so that all consumers could recover, at least, part of their own private investments. Though this procedure has begun in 2006, consumers have yet to be reimbursed.

Page 12: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Collective Redress Mechanisms in Portugal / Ação Inibitória

Page 13: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

“Ação Inibitória” (Injunction action)

What is?It´s an opt-out mechanism of general application, allowing injunctions against persons/companies that use or recommend unfair clauses.

Legal BasisPortuguese Constitution and National Laws

Who can initiate the procedure?Organizations and the “Ministério Público” (Public Prosecutor)

Page 14: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

“Ação Inibitória” (Injunction action)

Types of Disputes/Main AreasUnfair Contract Terms and Unfair Commercial Practices.

RemediesEnsure that the business ceases the infringement and does not engage in similar conduct in the future.

CostsConsumers are exempted from the cost of preliminary preparations in bringing the case.

Claimants are obliged to pay 10-50% of the court fees (as determined by the judge) if the case is lost. If the case is won, the court fees will be waived in full.

The defendant will always be obliged to pay court fees regardless of whether or not it wins.

Page 15: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Actions Taken by DECO

Page 16: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Banco Comercial Português, Banco Totta & Açores, Banco Espirito Santo and others – Injunction regarding the use of abusive clauses on payment cards ‘contract clauses.

Nikomagnetic, Biocasa, Pink Dream and Otorrosio – Injunction regarding the use of aggressive practices regarding the sales of mattresses.

Key Club and Jogol – Injunction regarding the use of abusive clauses on timeshare contracts.

TAP and Easyjet – Injunction regarding the use of abusive clauses on air transport´s contracts.

Apple – Injunction regarding the use of misleading practices on sales contracts.

Page 17: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

In the Future?

Page 18: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection

Judicial Collective Redress vs.

Alternative Dispute Resolution Mechanisms

Which will win?

Page 20: CONSUMER REDRESS ACTIONS TAKEN BY CONSUMER ORGANIZATIONS AND PUBLIC AUTHORITIES Actions taken by DECO - Portuguese Association for Consumer Protection