Implementing the EU Representative Actions Directive: Key Changes in Belgian Law

The Directive, adopted in 2020, aims to strengthen consumer rights by enabling collective redress actions across the EU, similar to US-style class actions but with specific European safeguards to prevent frivolous claims.

The European Commission recognised the need for such a directive due to the significant barriers consumers faced in enforcing their rights through individual actions. The Representative Actions Directive requires member states to implement mechanisms allowing qualified entities to bring collective redress actions on behalf of consumers, ensuring that companies internalise the harm caused by their practices.

Belgium’s existing collective redress regime, established in 2014, already allows qualified entities to seek injunctive relief or damages on behalf of consumer groups. However, the new bill introduces significant changes. One major change is that all qualified entities, except the Consumer Ombudsman, must now apply for designation by the competent minister every five years. This measure aims to prevent any undue influence by third parties with financial interests.

The current Belgian regime allows actions for breaches of both contractual obligations and specific legislation, covering both consumers and SMEs. The new bill, however, aligns with the EU Directive by focusing solely on consumer protection, though it permits member states to extend this scope. Belgium will maintain the broader scope, including SMEs and additional legislation not explicitly listed in the Directive.

Another significant modification is the introduction of cross-border actions. The Directive mandates that qualified entities from different member states can jointly bring actions in one member state, centralising claims and potentially reducing litigation costs. This provision could lead to forum shopping, where entities choose jurisdictions with more favourable procedural or financial rules.

The Belgian bill also addresses the opt-in versus opt-out system for group members. It opts for a general opt-in system, requiring explicit consent from consumers to join a collective action, which may limit defendants’ financial exposure by reducing the number of claims. However, for collective settlements, an opt-out system can still be used if agreed upon by both parties, allowing for comprehensive resolution of potential claims.

The bill was adopted by the Belgian Parliament on 18 April 2024, and entered into force on 10 June 2024. It will apply to new proceedings initiated after 10 June 2024, while ongoing cases will continue under the existing regime. These changes will undoubtedly have a significant impact on the landscape of collective redress in Belgium.