The National Authority of Consumers Protection (NACP) seems to give green light to collective actions in Romania by publishing a Draft Law aimed to implement the Directive (EU) 2020/1828 of the European Parliament and of the Council dated 25 November 2020 on court actions for the protection of the collective interests of consumers and repealing the Directive 2009/22/EC (“Draft Law“).
The Draft Law gives the qualified entities, such as consumer associations, the right to bring national or cross-border court actions against traders’ violations of the legal provisions, expressly listed in the Annex to the Draft Law.
Therefore, the qualified entities will be able to apply directly to the courts and not only to the public authorities empowered to supervise and sanction cases of violation of consumer rights (NACP), compared to the existing regulation (Decision No. 1553/2004 on certain procedures for the cessation of unlawful practices in the field of the protection of the collective interests of consumers).
Are the energy suppliers targeted by new regulations?
Another amendment introduced by the Draft Law consists in extending the list of legal provisions which violation may be the subject of collective actions.
Thus, in addition to the classic violation of Law 363/2007 on combating unfair trade practices in dealing with vendors and harmonization of regulations with European legislation on consumer protection or Law No. 365/2002 on electronic commerce, which violations could be reported to the competent authorities by consumer associations until now, the Draft Law also refers to violation of some niche provisions.
The Draft Law extends the involvement of qualified entities also to cases where traders violate the Electricity and Gas Law No. 123/2012, Law No. 506/2004 on the processing of personal data and the protection of privacy in the electronic communications sector, or Law No. 258/2017 on the comparability of payment account fees, switching payment accounts and access to payment accounts with basic services, etc.
Thus, qualified entities will be able to file court actions for the protection of consumer rights also in relation to traders in specialised fields, such as electricity and gas suppliers, banks, insurers, air, rail, or sea carriers.
Who are the qualified entities?
The qualified entity must be designated by the Member States. In order to be designated, the qualified entity must meet several criteria, such as: (i) it must be a legal person and be able to prove that it has carried out effective public activity in the protection of consumers’ interests for a period of 12 months prior to its application for designation; (ii) its statutory object of activity must demonstrate that it has a legitimate interest in protecting consumers’ interests; (iii) it must be a non-profit entity; (iv) it must not be subject to insolvency proceedings; (v) it must be independent and not be influenced by persons who are not consumers (employers, trade/professional associations, etc.). ); (v) to make public (including on its website) the fact that it fulfils the other conditions, details of its establishment, structure and management.
A list of entities qualified to file for cross-border actions will be communicated by the Ministry of Economy to the European Commission by 26 December 2023, to draw up a single list of all entities qualified to file for these actions. The competent national authorities will post on their website a list of the entities qualified to file for court actions at a national level.
What do collective actions aim to achieve?
Qualified entities may pursue through their court actions the application of measures to terminate a commercial practice or to achive remedial measures. These measures may be requested in separate actions or in the same action.
If the qualified entity seeks injunctive relief, it does not need the consent of individual consumers nor does it need to prove any actual loss/harm suffered by individual consumers or intent/negligence of the trader.
However, in order to request remedial measures, the qualified entity must obtain the individual written consent from the consumers affected by the court action within 30 days from the date the action is filled.
In the case of a national court action, if consumers residing in Romania do not explicitly express their consent within 30 days from the date of their request, they will be deemed to have tacitly expressed their consent for the outcome of the court action to be binding on those consumers as well.
Implied consent is not presumed in the case of consumers residing outside Romania or in the case of cross-border actions.
As an effect of the principle which implies the limitation of the right of those who are to go to court, when the law indicates two or more competent courts to choose and refer their action to only one of them, the Draft Law provides that those consumers who have explicitly expressed their consent to be represented will no longer be able to file for an action against the same trader and for the same practice in another court action or individually.
It is important to specify that a court decision ordering a remedy without identifying the consumers entitled to it, must at least describe the group of consumers entitled to benefit from those remedies.
Consumers can benefit from the remedial measures ordered by the court for 3 years after a final court decision is announced, and the amounts not collected by consumers will be paid to the state budget. This creates the potential that some of the funds ordered by the court for remedial purposes could turn into pseudo fines for the trader, with the uncollected amounts not returned to him but collected by the state budget.
Short review of the procedure
The Draft Law also regulates some procedural aspects such as the possibility of third-party funding of court actions, transactions relating to remedies, as well as the allocation of court costs seeking remedies.
Thus, the Draft Law specifies the exemption of qualified entities from the payment of stamp duties, as well as the exemption of consumers from the payment of court costs if the action is rejected.
At the same time, qualified entities are required to provide consumers with information on their court actions, their status, and their outcome.
In addition to the existing sanctions for non-compliance with court decisions, the Draft Law regulates a series of offences for non-compliance by traders with the measures imposed by the court, punishable with a fine of up to RON 100,000.
Less commonly, the Draft Law makes it the task of the court invested with the settlement of the court action, rather than the competent administrative authorities, to record and punish the offences in question, assigning to the national courts the role of investigating officers as well.
It remains to be seen in which form the Draft Law will be approved by the legislative body and how the qualified entities will be organised for 25 June 2023 when the law is expected to enter into force.