Spain

Introduction

The Spanish economic crisis has encouraged litigation in sectors whose regular consumers have realised the benefits of class actions in areas where they lack technical knowledge, and where judicial costs are lower and fixed. For this reason, the number of class actions alleging breaches of legislation relating to product liability is expected to increase over the next few years. In particular, the increase in class actions is likely to be focused on the banking, transportation, pharmaceutical, energy, tourism and telecommunications sectors.

Expand all
General features
  • In Spain, class actions are allowed and are regulated by the Spanish Civil Procedure Act (arts. 6, 7, 11, 13, 15, 76, 78, 221, 222 and 519). Spain goes further than many other European jurisdictions towards permitting representative actions, primarily in the realm of consumer protection.

    Spanish law allows representative actions to be brought by both consumer organisations and groups of consumers (provided the group of consumers includes the majority of those affected) where those who have suffered damage are identified or easily identifiable. It also allows for certain consumer organisations to bring a claim where the potential claimants are unidentified or unidentifiable - actions of this type are technically more complex.

    A much wider group of entities are then able to bring actions where the victims are identified or easily identifiable, meaning that these actions are more common than those where potential claimants are unidentified or unidentifiable. However, it is not always easy to identify the potential claimants in order to bring the former type of action. Both kinds of actions can only be brought in the interests of consumers, though "consumer" has a wide interpretation. In both cases, damages can be awarded.

    The class action mechanism in Spain is “opt-in”. According to art. 15 of the Spanish Civil Procedure Act, announcements in the media will be used to call those who have suffered loss to assert their individual rights or interests in proceedings lodged by associations or entities constituted for the protection of the rights and interests of consumers and users, or by groups affected. The Public Prosecution Service shall be a party to these proceedings when social interest justifies it.

    The Spanish Civil Procedure Act does not set out any particular mechanisms for the assessment of damages or the distribution of settlement or judgment sums.

    The entities authorised pursuant to European Community Regulations can act in defence of collective interests and the diffuse interests of consumers and users, but the publicity and intervention rules stipulated in art. 15 (referred to above) do not apply to this kind of action.

    The Public Prosecution Service can initiate any action in defence of the interests of consumers and users.

    In Spain, the burden of proof in consumer protection cases is normally reversed, so falls on the defendant.

    However, like most European jurisdictions, punitive damages are not available, there is no general disclosure requirement, and the loser usually pays the winner's costs. It is possible to request a preliminary proceeding in order to specify the members of the group of each aggrieved party, if easily determined, and in that way better manage the litigation. In such cases, the court will take the appropriate measures to verify the members of the group. Other preliminary measures available are, for example, to require the defendant to exhibit the object in his possession that shall be referred to at the trial.

    The trial will be heard by a judge; there is no trial by jury in the civil system.

Types of collective redress
  • The Spanish Civil Procedure Act clearly differentiates between two types of class action:

    • An action to protect the interests of a group of undetermined (or difficult to determine) consumers or users who are affected by an event. In order to bring this kind of action, the associations must be deemed to be “representative”, which means that the association has to be registered in the National Registry of the Ministry of Health and belong to the Council of Consumers and Users (associations of consumers and users in a supra-regional level), or in the corresponding Registry on a regional level.

    • An action to protect the collective interests of a group of clearly (or easily) determined consumers or users, who have suffered loss arising from an event. In this case, the association does not have to be registered in order to represent its members and to act.

    In claims brought by consumer organisations, the judgments are specifically regulated by art. 221 of the Spanish Civil Procedure Act and can be enforced according to art. 519.

    If the Court upholds the claim and imposes a monetary sanction, the judgment should identify those consumers and users who will benefit. If it is not possible to identify them, the judgment shall set forth the necessary details, characteristics and requirements in order to obtain a payment or, as appropriate, apply for enforcement. Any judgment will list the individuals who benefit from the decision or, where this is not possible, the criteria to be met to fall within the category. This means that even individuals who were not represented in the proceedings may enforce the ruling if they fall within the relevant criteria.

    If the judgment states that a specific activity or type of behavior is considered illicit, it shall also determine whether that is to have any effect beyond those who had participated in the proceedings.

    The judgment shall expressly issue a ruling on the pleas of those individual consumers or users who have entered an appearance.

    The Court with jurisdiction over enforcement shall, at the request of one or more interested parties, issue a declaration as to whether it recognises the applicants as beneficiaries in accordance with the data, characteristics and requirements set forth in the judgment.

    Although consumers may choose to opt in to the claim, there are no opt out provisions. This means that once a judgment has been given, an injured party that meets the criteria set out by the court in its judgment is not entitled to bring an action on their own. Res judicata will apply and will affect any non-litigants holding rights as consumers and users; a final and unassailable judgment will be a bar against any subsequent proceedings in which the matters in issue are identical to those in the proceedings from which that judgment arose.

Funding and costs
  • In Spain, the loser usually pays the winner's costs. Litigation costs in Spain must also include the costs of a court representative, who will represent the client, or group of clients, while the defence is handled by a lawyer. This additional cost is calculated applying a certain percentage to the amount in dispute.

    For legal fees, it is permissible to agree a success fee in addition to the regular fees, but "no win no fee" agreements are not allowed. Many law firms have launched specific services to bring actions against saving banks (Bankia and others) as a consequence of the sale of shares called “preferentes” (hybrid financial instruments). These law firms have brought thousands of similar claims on behalf of clients and in many cases they have agreed that the client does not have to pay any expenses associated with the dispute in return for a share of the profits in the event of success.

    Third party litigation funders do exist in Spain, and have shown an interest in class actions.

Recent developments, trends and predictions
  • This type of collective litigation is increasing significantly in Spain and specifically in the financial sector. The recent economic crisis and the hundreds of actions initiated in relation to the (allegedly abusive) clauses in contracts with financial entities have contributed to this increase. An example of this is the number of judgments issued by Spanish Courts in relation to “floor clauses”, which stipulated minimum mortgage interest rates, that were considered to be null and void. The economic crisis has given rise to a number of cases in the Spanish Courts against financial institutions, such as the one initiated by an association of consumers called ADICAE (Association of Consumers and Users of Banks, Savings Banks and Financial and Insurance Products) that lodged a number of collective actions against Bankia and the other financial institutions that were part of its savings bank. The press has reported that these claims involve 7,500 affected consumers and that the total amount claimed is up to 121m Euros.

    Class actions have also been used in other sectors such as transportation, pharmaceutical, energy, tourism and telecommunications, and it is likely that actions of this type will increase significantly in other sectors.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.