The Class Actions Law faces a new opportunity in the Argentine Congress

By Matías Ferrari

In the year 2009, the Argentine Supreme Court in its precedent “Halabi”, pointed out the legislative delay in the enactment of a class action legal regulation. Since that exhortation, there have been numerous bills that addressed the subject matter.

Currently, the House of Representatives is giving congressional treatment to José Luis Ramón’s bill called “Access to Collective Justice Bill” (hereinafter, the “Bill”), with the support of different parties. Here below, we summarize some of the most important topics covered by the Bill.

 Rights to be claimed: the Bill regulates the class actions judicial process, by which all kind of rights could be claimed since there are no limitations included (tax, consumer, environmental, politic, etc.).

• Jurisdiction: a wide interpretation of the jurisdiction is considered, since, to the plaintiff’s choice the intervention of any provincial or national court of the defendant’s registered head office or any other business address in which the defendant establishes to fulfill its intended purposes can intervene.

• Admission requirements: the Bill establishes the admission requirements for the class action process: i) the existence of a judicial case; ii) the impossibility or serious difficulties for joint litigation; and, iii) that common causes prevail over individual ones. In any case, it is necessary that the total sum of the individual claims does not prevent the class action filing.

• Adequate representation: it is established that the judge has to examine the suitability of the class representative at the beginning and during the process. However, this exam is flexible, since the judge can mitigate it considering the nature of the case, the vulnerability of the class, the difficulty to take on the representation for other class representative and the urgency of a final resolution for the case.

• Admission hearing of the class action: the Bill includes an initial hearing with the Prosecutor intervention to determine the class action admissibility, but with no intervention of the plaintiff.

• Class action publication: the Bill prioritizes the use of new technology and digital, radial and televisual communications. Also, the creation of a website of the class actions is established. Publication costs are in both parties’ expense, unless the judge determines that it is in charge of one of them or that the action in forma pauperis was granted to one of them.

• Bring an action in forma pauperis: the free cost process is provided with a wide criterion and automatically.

• Representative: the Bill establishes a special framework of 12 or 6 months, depending on the instance, with the possibility of other class intervening so as to continue the action.

• Punitive damages ad hoc: notwithstanding that punitive damages is not inherent of the class action process, the Bill sets the judicial power to establish a monetary dissuasive sanction against those who act with total disregard for collective rights, as well as for lucrative illegal acts. The lack of quantitative limitation regarding the subject is to be noted.

• Fees: for cases in which there is a monetary compensation requested, an attorney’s fee scale from 9% to 12% of the amount of the compensation determined in the final ruling or in the settlement approved by the court is established. In cases where there is no monetary compensation involved, the judge has to determine a reasonable attorney’s fee considering the class action extent. Also, the judge can determine an economic incentive of 2% of the amount set in the final ruling.

The Bill is in a “pro class action” logic to benefit the access to justice in this kind of claims. However, in our opinion, it avoids considering certain traditional problems that can be identified in a class action process, such as the ones related to publication costs, the existence of lawsuits poorly argumented, the overlap of class actions of the same subject matter and the adequate incentives for litigating in these processes, among others.

 


 

Main Highlights of the New Bill:

Judicial obligation to examine the plaintiff adequate representation.

• Publications focused on the use of new technology and digital, radial and televisual communications technology. Costs are in both parties’ expense, except that the action in forma pauperis was granted to one of them.

• The action brought in forma pauperis is conceded automatically.

• Attorney’s fees from 9 % to 12% of the amount determined in the final ruling.

• Judicial power to impose punitive damages without an amount restriction.