Class actions in Luxembourg

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Under Luxembourg law, there is currently no specific framework allowing for class actions, whether “opt-in” or “opt-out”. Such actions are also not admissible under the general rules of civil procedure as claimants may only sue in respect of a prejudice they have suffered personally.

Nevertheless, group actions are, to a certain extent, possible.

Indeed, there is no limit on the number of claimants who can launch an action together against one or several defendants. In practice, such claimants will often share the same lawyer, but this is not a necessity.

However, this mechanism differs from a class action in many ways. First, each claimant must be individually identified, have quality to act, must ultimately bring proof of his/her own prejudice and must formulate his own claim. Secondly, the court may decide to disjoin the claims if it takes the view that this is in the best interests of the proper administration of justice (which is likely to be the case if the court finds that the claims are not similar enough). Thirdly, all claimants remain bound by rules of territorial and monetary jurisdiction, which may constitute an obstacle to a large-scale group action. Fourthly, while it is theoretically possible for additional claimants to join the proceedings after they have been launched (via the so-called intervention volontaire), a court may decide that these claims should be disjoined from the original claims if they are likely to delay their progression. Lastly, the decision which is rendered will only bind persons which were a party to the proceedings.

Finally, Luxembourg courts have on several instances allowed legal entities to act on behalf of their members.

In a decision of the District Court of Luxembourg dated 19 May 2005, 1 District Court of Luxembourg, May 19, 2005, 6th chamber, n° 88227 of the roll, BIJ 08/05 the question of the legal standing (qualité à agir) of a legal person to claim damages on behalf of its members as indemnification for moral prejudice was addressed. In this case, the court accepted that legal persons may claim such compensation provided that the purpose of the action brought by the legal person was to defend the individual interests of all or some of the group's members and that the articles of association clearly indicate the right for the legal person to take any legal action to ensure their defense.

In 2007, 2 Court of Appeal, judgment no. 30686 of June 20, 2007 a decision from the Court of Appeal accepted that professional trade unions may take legal action to seek indemnification for the damage to the collective interest of the profession they represent, without any specific representativeness requirements.

Some associations can also be authorized by law and under certain conditions to bring claims on behalf of the collective interest they defend in the context of administrative proceedings to challenge the legality of an administrative act or in the context of criminal proceedings as civil parties.

No.

N/A.

There is currently no specific framework allowing for class actions under Luxembourg law. However, the Bill n° 7650 concerning the introduction of consumer class action lawsuits (the “Bill”) was introduced on 14 August 2020 with the objective of introducing a collective action in Luxembourg law. The Bill was significantly revamped in January 2022 to ensure compliance with the Representative Action Directive. While the Bill is still subject to amendment during the legislative process, its current key features are:

• The introduction of entirely new and ad hoc representative action procedure which will become available as from 25 June 2023, irrespective of when the facts underlying the action took place.
• A significant recast of the regime for injunctions for the protection of consumers’ interests, in order to align certain of its features (scope of application, competent jurisdiction, potential claimants, etc.) with the representative action procedure

NA.

According to the general rules of civil liability, the available remedies are damages, compensation in kind as well as specific performance and injunctive relief.

However, there are specific actions for injunctions which are contemplated by the Luxembourg Consumer Code and which aim at the cessation by a trader of an infringement of certain dispositions of the Luxembourg Consumer Code. Actions in relation to unfair commercial practices and unfair terms may be brought by any individual (or a group of individuals), while other actions can only be brought by a “qualified entity” (i.e. in Luxembourg the Union Luxembourgeoise des Consommateurs) or by administrative authorities.

The courts only award compensatory damages.

No.

Yes. Please see question 4 above.

N/A.

N/A.

N/A.

N/A.

N/A.

N/A.

N/A.

The Luxembourg Bar Rules strictly restrict contingency fees as they can only be a complementary remuneration which must not be disproportionate to the work done. Ultimately, lawyers’ fees can be judicially reduced if found excessive.

The losing party will usually be ordered to pay a procedural indemnity to the winning party. However, this indemnity is usually a lump sum determined ex aequo bono by the court and the amount is often nominal.

The winning party may also claim indemnification for the lawyers’ fees it has incurred. Such indemnification is not automatic as courts will usually require that the losing party’s behavior be found to be wrongful (for example by bringing a claim which was manifestly unfounded or by resisting a claim which was manifestly well-founded). The indemnification granted will take into consideration the fees paid by the winning party but can be reduced and set ex aequo bono to a lower amount if such fees are found to go beyond what is reasonable in light of various factors, such as the complexity, duration and outcome of the proceedings.

There is currently no legal framework regulating or prohibiting litigation funding in Luxembourg. While there has been a recent increase in practice of litigation funding, the lack of legal framework remains an obstacle to its development.

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European Class Action Report 2023

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