Portugal transposes Directive on representative actions for the protection of consumers' interests
Decree-Law no. 114-A/2023, of 5 December, transposing into Portuguese law Directive (EU) 2020/1828 on class actions for the protection of consumers' interests, was recently published in the Portuguese Official Gazette.
This law, very much in line with the Law on Class Actions (Law no. 83/95, of 31August), strengthens the procedural means for protecting the collective interests of consumers, ensuring a high level of consumer protection in the European Union, as well as the proper functioning of the internal market.
In particular, it applies to national and cross-border collective actions for the protection of consumers' rights and interests brought on the grounds of infringements (i) by traders of the provisions of national and European Union law referred to in Annex I of Directive (EU) 2020/1828 (including laws on certain aspects of contracts for the sale of goods, the General Data Protection Regulation, e-privacy legislation and legislation on unfair business-to-consumer commercial practices) and (ii) which harm or are likely to harm the collective interests of consumers.
Associations, foundations and local authorities are the ones entitled to take collective action to defend consumers' rights and interests. However, in view of the European context in which this law was drafted, and with a view to ensuring alignment with the criteria for designating qualified entities for the purposes of bringing cross-border class actions, this law extends the list of requirements for legitimacy to bring an action (which now includes requirements relating to the independence of associations and foundations and the financing of class actions by third parties).
In addition, and with the goal of ensuring the transparency of the financing of class actions by third parties, it is stipulated that claimants must make the underlying financing agreement available to the court, including a financial summary listing the sources of funding used to support the class action, and that this agreement must, under the terms of this diploma, guarantee the independence of the claimant and the absence of conflicts of interest. Such class action plaintiffs are also obliged to disclose on their website certain information relating to each class action they bring.
With regard to the system of procedural representation, the opt-out mechanism established in the Popular Action Law is maintained, but it is established that consumers who are not habitually resident in Portugal at the time that the class action is brought will have to express their wish to be represented in the action, in order to be bound by its outcome.
Finally, the procedure for prior consultation by the holders of the right to take collective action is provided for, establishing that definitive injunctions aimed at stopping or, where appropriate, identifying or prohibiting a practice considered to be an infringement, under the terms of the legislation for the protection of consumer rights and interests, can only be requested after a prior consultation process with the professional, by registered letter with acknowledgement of receipt. If the professional does not put an end to the infringement within two weeks of receiving said communication, the holder of the right of collective action that triggered the prior consultation procedure may request injunctive measures.
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