As of October 1, the courts of general jurisdiction will begin to consider collective claims
02.08.2019
The chapter devoted to cases on protection of rights and legitimate interests of a group of persons was introduced into the Arbitration Procedural Code of the Russian Federation ten years ago. The Code of Administrative Procedure of the Russian Federation, adopted in 2015, also provided for the possibility of applying to the court of a group of persons with a collective administrative statement of claim. The Civil Procedure Code of the Russian Federation did not contain similar provisions. This year, the legislator decided to fill this gap and on October 1, 2019, the federal law enters into force, supplementing the Civil Procedural Code of the Russian Federation with a new chapter regulating the consideration of cases on protection of rights and legitimate interests of associates. The same law amends the chapter on group actions in the APC of the Russian Federation.
The rules for consideration of group claims in arbitration courts and courts of general jurisdiction are basically the same.
It is possible to apply to the court in defense of the rights and legitimate interests of a group of persons, if:
- There is a common defendant for each member of a group of persons;
- The subject matter of the dispute is the general or similar rights and legitimate interests of the group members;
- The rights of associates and the obligations of the defendant are based on similar factual circumstances;
- All members of a group of persons use the same way to protect their rights.
A member of a group of persons may apply for protection of the rights and legitimate interests of a group of persons, and in cases stipulated by law, another person (body, organization or citizen) may apply for protection of the rights and legitimate interests of a group of persons.
Cases of protection of rights and legitimate interests of a group of persons shall be considered if by the date of application to a court of general jurisdiction at least twenty members of a group of persons joined the request, and in case of application to an arbitration court – at least five members of a group of persons.
In order to join the claim, a member of a group of persons must submit a written application to the person who applied to the court or directly to the court, if the claim has already been accepted for proceedings. It is possible to join the claim before the court proceeds to the court debate.
The person who has joined the request shall have the right to do so:
- To get acquainted with the materials of the case, to make excerpts from them, to make copies of them;
- To apply to the court for a replacement of the person in charge of the case;
- Attend the hearing, including if it is declared closed;
- Withdraw the application to join the request.
Members of a group of persons who disagree with the requirement to protect the rights and legitimate interests of the group of persons shall have the right to intervene in the case as third parties who do not declare independent requirements regarding the subject matter of the dispute.
If a member of a group of persons whose class action is being considered by the court makes a separate application to the same defendant concerning the same subject matter, the court invites him/her to join the class action. If the defendant does not exercise the right to join the collective claim, the proceedings will be suspended until the court’s decision on the class action enters into force. Individual proceedings are suspended even if they are brought earlier than the class action.
One of the members of a group of persons is entrusted with the management of the case for the protection of the rights and legitimate interests of a group of persons (unless the law provides for the right of another person to file a group action with the court and to conduct the case). The person handling the case acts on behalf of a group of persons without a power of attorney, enjoys all procedural rights and has procedural obligations of the plaintiff, including the obligation to pay court fees. Such person has the right to entrust the case to a representative.
The powers of a person who conducts a case in the interests of a group of persons shall be terminated by a court of law if that person waives the claim, or at the request of the majority of those who joined the claim, if the person is unable to conduct the case (e.g. due to illness, vacation, study or business trip), or if there are reasonable and bona fide doubts as to the conduct of the case in the interests of the group of persons. In such cases, the person handling the case may be replaced.
If the initiative to terminate the powers of the person in charge of the case comes from the members of the group, their application shall specify another person to whom the case is to be assigned.
If the powers of the person presiding over the case are terminated due to the withdrawal of the claim, he or she shall notify the persons who joined the claim of such withdrawal. The form of notification shall be determined by the court. If the person conducting the case is replaced within the time limit set by the court, the court shall terminate the proceedings with respect to the person who withdrew the claim and shall issue a ruling on its replacement.
If the members of a group of persons who joined the request do not choose a new person to conduct the case, the court shall terminate the proceedings completely. In contrast to the termination of ordinary lawsuit proceedings, the right of group members to apply to the court for protection of their violated or contested rights and legitimate interests is not revoked.
The period of consideration of a class action should not exceed eight months.
After the acceptance of the statement of claim for proceedings, the person in charge of the case must publish in the media or on the court’s website an invitation to other persons in the group to join the request for protection of the rights and legitimate interests of the group of persons. At the request of the person handling the case, the court may request information on the basis of which it is possible to identify other members of the group of persons and their addresses in order to send them an offer to join the request. If the person in charge of the case does not invite other members of the group to join the request, the court will leave the application without consideration.
In the preliminary hearing, the judge will decide whether the group of persons meets the conditions specified in the law. If the group does not meet these conditions, the persons who joined the request will explain their right to apply to the court with their own claims.
The person handling the case and the persons who joined the request may conclude a notarized agreement of the group of persons, which defines the procedure for the payment of court expenses and the powers of the person handling the case.
The court’s decision on the class action shall contain conclusions with respect to everyone who has joined the requirement to protect the rights and legitimate interests of the group of persons. The circumstances established by such a decision shall have preferential effect in the course of consideration of another case by the court upon the application of a member of the group of persons who has not previously joined or refused to join the request to protect the rights and legitimate interests of the group of persons submitted to the same defendant, on the same subject, except in cases where the said circumstances are disputed by the member of the group of persons. The Arbitration Procedural Code of the Russian Federation provides for an even stricter consequence: the Arbitration Court shall terminate the proceedings upon the individual application of the member of the group of persons who has not joined or refused to join the collective claim, as well as the defendant and the same subject matter, if there is an effective decision on the group claim.
See Federal Law No. 191-FZ of 18.07.2019 “On Amendments to Certain Legislative Acts of the Russian Federation”