Class actions in Austria

See the Overview of the Representative Actions Directive >>

Austrian law does not provide for a civil procedural legal institution comparable to "class actions". The most important form of collective redress in Austria is a concept called “collective actions Austrian style”. In these cases, individually named claimants assign their claims to an association pursuant to sec. 29 Consumer Protection Act for the purpose of filing a complaint in court (i.e., collection assignment). The association then asserts the claims collectively in its own name against the defendant, but not in the name of the assigning party. The latter is prohibited under Austrian law. In the proceedings, every claim is then assessed individually on its merits. 

This concept not only allows for several individual claims to be asserted in one action, but also for litigation funders to support the lawsuit financially. Injured parties, who have not assigned their claims to the association are not affected by these proceedings and a judgment does not have any binding effect on them, even though they may have similar or identical claims against the same defendant. On this basis, Austria operates an “opt-in” collective redress mechanism.

An alternative, but less frequently used mechanism is where all claimants (the number varies from a few to several hundred individual claimants) assert their claims in a joint action. The main difference to the “collective action Austrian style” is that in this case each claimant acts in his or her own name against the defendant in combined proceedings.

There are no “opt-out” class actions in Austria. 

There are no statutory provisions on standing for bringing claims in “collective actions Austrian style” (see answer to question 1). However, the concept has been developed and is based on an assignment of claims to an eligible association pursuant to sec. 29 Consumer Protection Act. 1 For example, the Austrian Federal Economic Chamber, the Association of Austrian Chambers of Agricultural Workers, the Presidential Conference of the Austrian Chambers of Agriculture, the Austrian Federation of Trade Unions or the Austrian Senior Citizens' Council.  In practice, the Austrian Consumer Protection Association or the Austrian Chamber of Labour usually acts as claimant in these proceedings. It is possible to establish an ad hoc association or club in this respect. 

However, it should be noted that “collective actions Austrian style” bring significant organisational and logistical challenges and comparatively high costs for the claimant. Even if the claimant cooperates with a litigation funder for the financing of legal costs, the claimant still bears the risk of the funder’s insolvency and may have to take out separate insurance against this. Thus, we are currently not aware of any ad hoc established association or club having brought claims under the “collective actions Austrian style” concept. 

There are no published overall statistics on the number of “collective actions Austrian style” (see answer to question 1). However, some associations publish their statistics in annual reports. For example, in 2019 the Association for Consumer Information submitted 36 “collective actions Austrian style”. At the time of writing, there are no pending changes to this concept of collective redress.

As noted in the answer to question 1, “collective actions Austrian style” are based on the previous assignment of individual claims by individually named claimants to an association and the assertion of these assigned claims by that association in its own name. The claim must fall within the jurisdiction of the Austrian courts and, pursuant to the rules on assignments, the respective type of claim can be validly assigned to a third party. This must be assessed on a case-by-case basis. Typically, the claims to be asserted in “collective actions Austrian style” are based on damages and/or unjust enrichment. There are no restrictions in terms of ordinary courts having jurisdiction and the assignability to a third party in respect to these types of claim. 

In “collective actions Austrian style” proceedings all kinds of relief are available including damages and injunctive relief.  

Damages are calculated on a compensatory basis in Austria. The Austrian Civil Code follows a “structured concept of damage”. Damages/losses resulting from the destruction or damage to an already existing asset are called “positive damage”. For example, if a car is destroyed or damaged, its owner suffers positive damage, which is set against “loss of profit”. Lost profit is the failure to increase assets by destroying a commercial opportunity. It is the impairment of a prospect of profit that the injured party would have had in the normal course of events. 

The extent of compensation and the calculation of damages depends on the fault of the injuring party. If the injuring party acted with slight fault (slight negligence), he or she must pay compensation only for the actual damage suffered (positive damage). The "common value" (i.e., the market value) of the damaged or destroyed asset at the time the damage took place is taken into account. The payable damage is the difference between the common value before and after the damage. 

However, if the injuring party acted with gross fault (gross negligence or intent) it must pay full compensation, which includes not only compensation for the actual damage suffered (positive damage), but also the lost profit of the injured party. The injured party must be placed in the same position as he/she would have been in had the damaging event not occurred, taking into account his/her total assets. The damage is calculated using the difference method; the difference between the assets of the injured party as they are now and as they would be without the damaging event.  

Special rules apply to the calculation of damages in case of bodily injuries. 2  Sec. 1325 Austrian Civil Code.

No, the underlying principle of damages under Austrian law is the compensation of the injured party for the damages suffered by the injuring party. 

Yes. The implementation of the Representative Action Directive will in particular require an amendment of the Austrian civil procedure law.  

There are no special rules for the settlement of claims brought in the form of “collective actions Austrian style” (see question 1). The parties (i.e., the association asserting the claims of the injured persons and the defendants), may settle the case in an in-court or out-of-court settlement. In-court settlements must be recorded in writing by the court; court approval is not required.

There are no specific rules on jurisdiction that apply to the “collective actions Austrian style” (see question 1). Provided that the Austrian courts have jurisdiction, there are no territorial restrictions on who can assign claims to the association acting as claimant under this concept. 

There are no “certification” requirements in “collective actions Austrian style” (see question 1). However, it is not possible to combine completely different claims and then assert them together under this concept. First, it is required that the court has jurisdiction over all claims and the same type of procedure applies. Also, the Austrian Supreme Court 3 Supreme Court 12.7.2005, 4 Ob 116/05w.  has ruled that, while the underlying facts of the case giving rise to the (assigned and asserted) claims do not need to be identical, an essentially similar basis for the claims is required and essentially the same factual or legal questions, which concern the main question or a very relevant preliminary question of all claims, have to be assessed in the court proceedings.

An illustrative example for this is a case about consumer loan agreements and excessive interest rates. The Chamber of Labour, using the concept of “collective actions Austrian style”, asserted the (assigned) claims of several hundred consumers against several Austrian banks and sought repayment of overpaid loan interest. The underlying facts of the individual claims were, naturally, not completely identical. Different banks had concluded different loan agreements with hundreds of consumers. The interest rate adjustment clause mechanisms were not identical either. However, all claims were based on the argument that the respective interest rate adjustment clauses in the consumer loan agreements were allegedly unlawful. This was the main question of the proceedings. The legal basis for all claims was damages and/or unjust enrichment. An essential preliminary question for all claims was whether they had already become time barred at the time when the lawsuit was filed. 

The Supreme Court held that under such circumstances the use of the concept of “collective action Austrian style” was permissible and that the association had validly asserted the claims.  

In practice, however, this attempted clarification by the Supreme Court causes considerable problems for the claimant because in each case of a “collective action Austrian style, it can be discussed (and disputed) whether and to what extent the claims asserted in that specific “collective action Austrian style” have sufficient connection within the meaning of the Supreme Court decision.

No, a “collective action Austrian style” (see question 1) can be filed in any court that is competent to hear the case, which depends on the subject matter of the case and on whether the defendant is domiciled in Austria. Given that typically defendants are registered companies and the disputes business-related, commercial courts usually handle “collective actions Austrian style” at first instance. 

Pre-trial discovery/disclosure is not provided for in Austrian civil procedure law.  

No. The losing party may file an appeal against the decision in first instance within four weeks of the service of that decision to the losing party. Once the court of first instance receives the appeal, it serves it to the winning party who may within four weeks file a written reply. The court file is then transmitted to the Court of Appeals. A further appeal to the Supreme Court is only allowed under certain circumstances, and in particular requires that a legal question of considerable importance be answered. 

In B2B contracts, yes. Arbitration agreements between businesses and consumers are not valid under Austrian law unless the consumer agrees again to the arbitration after the dispute has arisen.

Contingency fee agreements are permissible, but not as a percentage of the amount won, which is prohibited by law. 

Austria operates a cost shifting mechanism whereby the losing party has to pay the winning party’s legal fees (“loser pays” rule). Adverse costs are capped insofar as the fees are to be calculated on the basis of the Lawyers’ Tariff Act and, in respect to the court fee to be paid, by the Court Fees Act. Fees are calculated on the basis of the amount in dispute. Both Acts have a degressive effect (i.e., the higher the amount in dispute, the lower the fees). Fees of experts, translators, etc. are calculated based on their respective tariffs. 

Litigation funding is permissible and available in Austria in general. “Collective actions Austrian style” (see question 1) are usually funded by litigation funders, which assume the litigation cost risk in return for a success rate (currently typically 30%). 

See the Overview of the Representative Actions Directive >>

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