Class actions in Bulgaria

  1.  Do you have a specific procedure or procedures for bringing “opt-in” class actions?  If so, please outline such procedure(s) and their key features.
  2. Do you have a specific procedure or procedures for bringing “opt-out” class actions?  If so, please outline such procedure(s) and their key features.
  3. Are there specific rules on standing for bringing claims under these procedures (e.g., that claims can only be brought by consumer associations)?  If so, please summarise those rules.
  4. How frequently are class actions brought in your jurisdiction? Are there any pending changes to your class action rules that are likely to increase the number of claims filed?
  5. Are the procedures for class actions restricted only to certain causes of action/types of claim, e.g., competition claims?  If so, please describe these restrictions.
  6. What types of relief are available, i.e., damages and/or injunctive relief? 
  7. On what basis are damages calculated i.e., compensatory and/or some other basis?
  8. Are punitive or exemplary damages recoverable?
  9. Will domestic law need to be changed to comply with the Representative Action Directive?
  10. Are there special rules for settlement of class actions, e.g., requirement for court approval?
  11. Beyond the existing rules for taking jurisdiction in unitary claims, are there any additional rules on jurisdiction for your class action procedures?  Are there any territorial limitations to who may be members of the class?
  12.  Please describe the “certification” requirements for each of your jurisdiction’s class action procedures, e.g., how similar must the claims be?  Are there any other criteria to be met for the court to approve use of the procedure?
  13. Do you have specialist courts for these procedures?
  14. Are there any special rules for discovery/disclosure for class action procedures that are different to the rules for unitary actions?
  15. Are there any special rules for appeals in class action procedures that are different to the rules for unitary actions?
  16. Can arbitration clauses lawfully contain class action waivers?
  17. Are contingency fee agreements permissible?
  18. What are the rules on cost shifting, i.e., does the losing party ordinarily have to pay the winning party’s costs?  Are adverse costs awards capped?  If so, at what level(s)?
  19. Is litigation funding of class actions permissible?  If so, how prevalent is litigation funding?

1. Do you have a specific procedure or procedures for bringing “opt-in” class actions?  If so, please outline such procedure(s) and their key features.

The Bulgarian legal framework does not provide for an “opt-in” class action scheme. 

2. Do you have a specific procedure or procedures for bringing “opt-out” class actions?  If so, please outline such procedure(s) and their key features.

Bulgaria adopted an “opt-out” class action scheme that is available to both natural and legal persons. Pursuant to Bulgarian civil procedure rules, the class members shall be entitled to opt-out, any judgment will extend to all class members who did not opt-out. 

The class members must be informed about the initiation of the class action. In the course of the first open court hearing the court shall rule on:

  1. A plan for publicising of the class action, including the number of notices to be published, the respective media which should be used and the period during which the publication shall be made;
  2. a reasonable time limit after the publication within which the damaged persons (the members of the class) shall be entitled to declare that they will participate in the action, or opt-out.

The court shall then rule on the acceptance for participation in the proceedings of other damaged persons or ad hoc organisations that declared that they would like to participate within the given term and shall exclude the individuals and entities who requested to opt-out.

3. Are there specific rules on standing for bringing claims under these procedures (e.g., that claims can only be brought by consumer associations)?  If so, please summarise those rules.

A class action may be brought on behalf of persons who have suffered the same or similar harm. according to the nature of the infringement, the group of the said persons must be “identifiable“. 

In order for the claim to be considered as a collective action, the claimant shall be:

  1. An individual(s) acting on behalf of the class;
  2. Ad hoc organisations acting on behalf of the class;
  3. Organisation for protection of the interest of the damaged persons, such as the Bulgarian Consumer Protection Commission (BCPC). 

A key question is whether the damaged persons are identified or not. The law requires the class members to be identifiable and their common interests to be impaired by the same infringement. However, if all of the class members are already identified, then the claim can no longer be considered a class action but as different individual claims brought together. Also, according to the jurisprudence, if the collective action does not seek compensation for the violation of the common and concurring interests of the affected persons but for their individual rights, the proceedings shall be separated, and each claim considered independently. 

4. How frequently are class actions brought in your jurisdiction? Are there any pending changes to your class action rules that are likely to increase the number of claims filed?

The overall application of the collective actions legal framework in Bulgaria is not very common. Since the legal framework came into force in March 2008 there are no more than several dozens of class action cases closed with a final court act on the merits. 

According to the statistical data available, the majority of the collective actions are brought by the BCPC. However, the BCPC shall not be entitled to claim compensation for damages on behalf of the collective interest. On the other hand, the tendency shows that individuals and entities prefer to seek compensation through individual claims rather than filing a class action on behalf of the collective. 

5. Are the procedures for class actions restricted only to certain causes of action/types of claim, e.g., competition claims?  If so, please describe these restrictions.

The Bulgarian collective actions legal framework is a procedural framework that is applicable to all areas of law. 

6. What types of relief are available, i.e., damages and/or injunctive relief? 

There are two types of class actions stipulated in the Bulgarian legislation.

The first type is a claim for damages suffered where the claimant seeks to obtain declaratory relief. The declaratory effect of the judgment favours all persons affected by the infringement, its illegality and the liability of the defendant. If this action is successful, each member of the class, who did not opt-out, shall be entitled to seek compensation in his individual capacity on the grounds of the court ruling of the collective actions. The claimant needs only proof of harm and of a causal link between his harm and the defendant’s wrongdoing. 

The second type of claim is when the claimant seeks to vindicate the common interest of the damaged persons (the collective) and on behalf of the collective. The specific relief sought by the claimant may be to request the defendant to: 

  1. conduct a certain act; 
  2. refrain from certain actions; 
  3. pay monetary compensation.  

However, the compensation claimed under the second type of collective action is not entitled to cover the damages caused to the individual class members, but it is aimed at compensation (cy pres award) of the collective (group) interest. With this in mind, if any of the claimants seek to receive compensation for the harm suffered then the claim shall be separated as an individual claim in different court proceedings.

7. On what basis are damages calculated i.e., compensatory and/or some other basis?

The rules provide only for an option for cy pres awards as a result of the collective actions. According to the jurisprudence, claimants shall not be entitled to seek remedy for the individual interest harmed but only for the collective interest of the class. The Bulgarian courts are empowered to rule on the compensation of any loss suffered (loss and loss of profits) and the damages are calculated on the basis of the actual loss. 

The Civil Procedure Code regulates the disposal of the cy pres awards. The court may rule that the compensation shall be transferred to an account of one of the claimants, to a special account jointly disposable by the claimants or to a special account jointly disposable by the damaged persons. The first-instance court may convene a General Meeting of the damaged persons by publishing a notice. The General Meeting has the power to elect a committee which will be authorised to manage the funds awarded as damages that are deposited in a special account. The General Meeting shall be entitled to take decisions on certain actions and to provide instructions to the committee to conduct them.

8. Are punitive or exemplary damages recoverable?

No. Punitive or exemplary damages are not allowed under Bulgarian law. The general rules apply to the class actions as well.

9. Will domestic law need to be changed to comply with the Representative Action Directive?

Bulgaria’s class action legal framework already complies with the main elements of the Representative Action Directive. Pursuant to the Consumer Protection Act, associations for the protection of consumers (listed under Article 164, para. 1, item 7 of the Consumer Protection Act), have the right to bring an action for the suspension of, or prohibition of actions or commercial activities which are in violation of the collective interests of consumers. In addition, the BCPC has also legal standing to bring the claim under the said article.

Separately, the Consumer Protection Act provides for legal standing for collective actions of a qualified organisation of an EU Member-State within whose territory the consequences of the infringement on the collective interests of consumers, committed within the territory of the Bulgaria, have occurred.

10. Are there special rules for settlement of class actions, e.g., requirement for court approval?

Similar to the general litigation proceedings, the court shall direct the parties to a settlement and shall explain thereto the advantages of the settlement and other alternative dispute resolution methods. 

The agreement reached between the parties in the form of a settlement is subject to approval by the court. The main role of the court us to examine whether the settlement is not contradictory to the law and principles of morality and good faith and whether the harmed interest can be protected to a sufficient degree by the settlement.

11. Beyond the existing rules for taking jurisdiction in unitary claims, are there any additional rules on jurisdiction for your class action procedures?  Are there any territorial limitations to who may be members of the class?

The respective competent district court examines class actions (jurisdiction Ratione Materiae), acting as a court of first instance, regardless of the claim value and according to the special procedure established for the class actions in the Bulgarian Civil Procedure Code. 

There are no territorial limitations to who may be members of the class.

12. Please describe the “certification” requirements for each of your jurisdiction’s class action procedures, e.g., how similar must the claims be?  Are there any other criteria to be met for the court to approve use of the procedure?

Bulgarian legislation provides for the following requirements for approval of the class action:

  1. the group of injured persons may be indefinite but shall be identifiable. In this case the claimant must give a strict definition of the class, which has been harmed and be confident that every person that falls under that definition. 
  2. claimants must also point out objective criteria on which basis the definition of the class is built. Such criteria include: the interest(s) that have been impaired (certain criteria determining the specifics of the impaired interest and the classification of the persons); the  period of time where the violation took place; and the location where the violation took place. 
  3. claimants must provide evidence that they can in good faith and seriously vindicate the impaired interest by being able to finance the costs of litigation. The court specifies needed evidence in each individual case. If the claimant proves such ability, the other persons who join the class action do not need to prove such ability.     

For the other injured persons, who would like to participate the case, it is enough to declare in their claims their personal interest to join the case and that they fall under the definition of the class.

13. Do you have specialist courts for these procedures?

There are no specialist courts for these procedures. Class actions in Bulgaria are examined by the respective competent district court.

14. Are there any special rules for discovery/disclosure for class action procedures that are different to the rules for unitary actions?

As a special rule, the statement of class claim, apart from the circumstances upon which the claim is grounded, shall specify: (i) the characteristics which identify the group of injured persons and (ii) a suggestion on how the submission of the class action is to be disclosed.

The court schedules a hearing with the summoning of the parties, on which, considering the statements of the parties, the court determines: (i)  an appropriate way for announcing the submission of the claim - number of announcements, through which media and for what duration the said announcements must be made; and (ii) an appropriate term after the disclosure, in which the injured persons may declare that they will participate in the procedure or will pursue a remedy independently.

It is a common practice in the class action procedures in Bulgaria, that the claims are published in the newspapers, including a local daily newspaper, and on the website of the respective organization for protection of injured persons, which have filed the claim (where applicable).

15. Are there any special rules for appeals in class action procedures that are different to the rules for unitary actions?

There is a specific rule with respect to the appeal of the Appellate court’s judgment in class action procedures before the cassation instance, whereas the general prerequisites for admissibility of the cassation appeal do not apply albeit the merits of an appeal are considered in the normal way. 

In addition, the class action’s judgments which entered into force cannot be annulled upon request of third parties who have not participated in the action.

16. Can arbitration clauses lawfully contain class action waivers?

As a general rule, according to the Bulgarian legislation, the preliminary waiver of future claims is invalid. Furthermore, arbitration clauses cannot lawfully contain class action waivers.

17. Are contingency fee agreements permissible?

There is no specific rule forbidding contingency fee agreements, therefore, for class actions such agreements could be permissible. 

On a side note, according to the Bulgarian Lawyer’s Ethic Code,  the lawyer is not entitled to conclude an agreement with his client before the end of the case, by which the amount of the lawyer's remuneration is determined as a share of the subject of the legal dispute defended by the lawyer.

18. What are the rules on cost shifting, i.e., does the losing party ordinarily have to pay the winning party’s costs?  Are adverse costs awards capped?  If so, at what level(s)?

According to the Bulgarian Civil Procedure Code, the losing party shall pay the fees, the costs of the proceeding and the fees for one lawyer, if any, proportionate to the acknowledged part of the claim. Hence, the losing party may also request reimbursement of the costs incurred by him corresponding to the rejected part of the claim. 

Generally, the adverse costs awards are not capped by the applicable legislation. However, the  Bulgarian Civil Procedure Code stipulates that, when the remuneration of a party’s lawyer is excessive according to the actual legal and factual complexity of the case, the court may, upon request of the other party, award a lower amount of costs in this part but no less than the minimum amount stipulated in the Bar Act depending on the specific case.

19. Is litigation funding of class actions permissible?  If so, how prevalent is litigation funding?

Currently, the litigation funding is not regulated in Bulgaria. Hence, there is no barrier to litigation funding of class actions.  That said, litigation funding is not yet common practice in Bulgaria.

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