Unlike the American legal system, where class action lawsuits occur regularly, the Belgian legal system does not allow for class action lawsuits by default. Furthermore, the Belgian legal system does not have a system of binding precedent on which large groups of affected individuals can rely for efficient resolution of mass claims against the same counterparty as a result of a common cause.
In such situations, affected individuals often fall back on time-consuming and costly procedures, which they will have to initiate themselves to receive any kind of compensation. Because there is no binding legal precedent, these individuals can also not rely on past decisions of the court in proceedings with the same counterparty and cause to lower their burden of proof.
Recently, legislative initiatives seem to be emerging that aim to increase the efficiency of the Belgian legal system in this respect.
The current Belgian legal framework
Two scenarios are possible in the context of mass claims:
1. Each individual takes the initiative to group and exercise their individual claims together.
2. A representative exercises the claims of a group of affected individuals without having a claim itself.
The Belgian legal system allows individuals to exercise their individual claim together with claims of other individuals to the extent that these claims are sufficiently related to be dealt with together. These groups can thus share the legal costs of litigation and effectively litigate against a common counterparty.
An important point to note, however, is that each individual party will have to be identified in all litigation documents (summons, briefs, judgment, etc.). This is workable for 10 to 20 plaintiffs, but quickly becomes practically impossible for 100s of plaintiffs, making it an inefficient solution.
On the other hand, whenever a party wants to collectively exercise mass claims for multiple individuals, without having an individual interest itself, their claim runs the risk of being dismissed by the courts because of the strict admissibility requirements of the Belgian judicial code, specifically the requirement of an individual interest and capacity in bringing a claim.
It is only as of the Act of 28 March 2014 regarding collective redress, that the Belgian legislature has provided for an exception to this rule by introducing the concept of class actions into Belgian law, articles XVII.35 to XVII.70 of the Belgian Code of Economic Law (BCEL). This legal initiative made it possible to initiate some form of collective redress.
However, multiple restrictions for actions for collective redress apply, notably:
- Only certain type of claims are allowed, being claims regarding potential violations of contractual obligations or any of the exhaustively named European regulations, laws or any of their implementing decrees by undertakings. According to the legislator, the selected regulations, laws and decrees all have some sort of consumer’s rights protection.
- The action is brought by a representative and is only possible for consumers and small and medium-sized enterprises as claimants (SME). The possible representatives for consumers and SMEs are strictly defined by law and are limited to certain organizations, associations, autonomous public services and organizations.
- Recourse to an action for collective redress must appear more effective than an action under common procedural law.
Considering the above, the defendant of an action for collective redress will always be an undertaking, being specifically defined by the BCEL in this context as any natural or legal person pursuing an economic purpose on a long-term basis, as well as its associations.
Despite the above legislative initiative, the number of collective redress actions brought remains very limited.
If individuals await a decision from the first mover of the group, they are faced with the fact that the Belgian legal system does not have a system of binding precedent for court decisions, which means that in their subsequent proceedings they will also have to prove all legal and factual elements in order to obtain redress, with the risk of a contrary decision, which they will inherently see as unfair.
Recent legal initiative for efficient subsequent proceedings
Although few collective redress claims have been brought since the Act of March 28, 2014, came into force, the Belgian legislature does not seem to foresee, for the time being, any more flexibility in the conditions for collective redress claims that would substantially increasing the number of collective claims being brought before the Belgian courts. Even European initiatives like the Directive 2020/1828 on representative actions for the protection of the collective interests of consumers adopted by the European Parliament on 25 November 2020, are unlikely to have significant impact on the number of collective claims.
However, on 13 September 2023 a draft bill was introduced containing various provisions in civil and judicial matters pending before the Belgian Parliament. One of the proposed provisions of this draft bill catches the eye. Although seemingly innocuous and a rather legal technical addition, this change would significantly impact the binding effect of a court decision in the Belgian legal system in proceedings initiated by third parties against the same counterparty regarding the same factual situation.
Currently, the Belgian Judicial code states that the authority of a court decision does not extend beyond that which was the subject of the decision. It is required that the matter claimed is the same, meaning that:
1. the claim is based on the same cause of action.
2. the claim exists between the same parties and was made by them and against them in the same capacity.
In other words, you cannot bring the same case between the same parties before the same court twice, because the court decision is binding to the parties within that decision. The binding nature of the does not extend to third parties aiming to use that same decision against a common counterparty in their case.
The provision of the draft bill of 13 September 2023 now aims to allow third parties to the court decision to invoke the authority of a court decision with respect to a matter in dispute that was subject of the judgement against a party to that judgement. This would significantly lower the threshold of litigation for affected individuals in cases where a first mover obtains a positive decision pertaining to a situation with multiple affected individuals. To the extent that the factual and legal context of the subsequent proceedings is identical, these elements would no longer be the subject of discussion. The discussion would therefore be limited to the elements that are different from the court decision invoked by the third party in these subsequent proceedings.
The draft bill was approved by the government on second reading and was submitted to parliament for approval. After submission, both the Belgian Supreme Court and two legal professors issued opinions expressing their concerns about the impact of the proposed article in the proposed form. According to the Supreme Court, the provision in question would create unjust consequences in many disputes.
The main concern of the Supreme court can be best illustrated with an example. Suppose that in a first trial the judge had ruled that a party has committed a fault and is liable for the damages caused by that fault, but that his opposing party had failed to prove the alleged damages or only proved damages for a limited amount. Because of the limited impact no appeal is filed against that first judgement.
In a second trial another victim of the same alleged fault claims substantial damages and is able to prove these substantial damages. The Supreme court raises the concern that in such cases, it would not be consistent with justice to take away the possibility for the liable party to plead again that there was no fault.
Therefore, in an amendment of 8 November 2023 the Belgian legislator has provisionally deleted the provision in order to reflect on proposed alternatives and let the other provisions of the draft bill pass without any delay.
The question now arises whether and in what form the Belgian legislator would introduce such a change in the future. After all, this would introduce a form of binding precedent in the Belgian legal system, which is unprecedented to date.
Although the aforementioned legal initiative does not change anything to the current legal framework for class action lawsuits, if adequate solutions are found for the concerns raised regarding the impact of such initiative, it could be a step in the right direction for the efficient resolution of disputes with multiple affected individuals all initiating proceedings against a common counterparty through separate claims.
We will closely monitor the legal developments in this respect and will further inform you when the Belgian legislator has reflected and has chosen to implement this change in some form.
In case you have any questions regarding this topic or the impact this may have on you as an organization or individual, do not hesitate to contact us.