Class actions in Romania

  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.

While Romanian law acknowledges various forms of multi-party litigation, the concept of class action in the Romanian jurisdiction is limited and different from that applicable in other jurisdictions such as the UK or the US.

In Romania, there is no general framework that regulates procedures for class actions. The possibility to bring class actions is limited and expressly acknowledged only in particular fields of law, namely: (i) consumer protection law (albeit for injunctive relief only); (ii) human rights law; (iii) competition law; (iv) employment law; and (v) insolvency law, as detailed under question 3 below (“sectoral collective actions”). Sectoral collective actions are rather atypical class actions, since they do not present all the characteristics specific to full-fledged class actions, as commonly acknowledged in other jurisdictions.

The “opt-in” / “opt-out” dichotomy for class actions will depend on the particular type of class action involved. Except for cases outlined under question no. 2 below, in most cases multi-party actions are based on an “opt-in” mechanism since representation of the claimants will be based on an individual mandate granted by claimants who share a common interest (e.g., in a claim for damages brought by a consumer protection association). With this “opt-in”, the effects of the decision rendered is limited to the parties involved in the litigation and the individual loss suffered by those consumers.

In addition to sectoral collective actions mentioned above, the Romanian Civil Procedure Code (“RCPC”) provides for legal mechanisms allowing multiple participants in court cases, either as “co-participation in the case” or as “voluntary intervention in a case”. 

Several persons may join together as claimants or defendants – in co-participation – if their rights or obligations share a common cause (e.g., when more persons are harmed by the same or a similar behaviour of one and the same perpetrator) or are closely linked. If claims that are closely linked are raised separately, the court can order that they be consolidated and tried together. An order for consolidation can be made following an application by the claimants, defendants or at the court’s volition. The court has broad discretion over this issue and will be influenced by arguments on efficiency and cost savings.

In voluntary interventions, an intervention can be made in support of one’s own rights (i.e., main intervention) or in support of the main claimant (i.e., ancillary intervention). Both injunctive and compensatory relief are available in these mechanisms.

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.

2.1 Consumer protection law

Under Romanian law, consumer associations are entitled to bring actions to vindicate the rights and interests of consumers in general, but there is also a specific class action that can be brought both by the National Authority for Protection of the Consumers (“ANPC”) and consumer associations for abusive contractual clauses in contracts between professionals and consumers. In this type of actions only interim injunctions can be requested. A claim for damages would not be possible in this case. However, damages can be requested individually by consumers based on a specific mandate of representation (either granted to the same lawyers or consumer association, such as members of a consumer association empowering the associations to act on their behalf) or by means of an opt-in mechanism (as mentioned under question no. 1). For example, in collective redress actions in compensation against banking creditors, based on the use of unfair banking terms in consumer credit contracts, consumers used common mandate contracts concluded by law firms who represented them based on an opt-in system.

Qualified entities can only bring opt-out class actions (as expressly designated by consumer protection laws), which will have legal standing. The law does not recognise an opt-out action for consumers in these types of class actions and consumers are arguably bound by decisions rendered in such cases. Notably, in the case of claims against abusive contractual clauses in contracts between professionals and consumers, the law provides that interested consumers will retain their individual rights to request the cancelation of unlawful clauses, irrespective of the opt-out collective claims brought by qualified entities.

2.2 Human rights law

NGOs acting in defense of human rights or those with a legitimate interest in fighting against discrimination can also bring actions in the name of a community or group of people if discrimination is manifested within their activity sector (e.g., an NGO defending women’s rights could not bring a class action based on racial discrimination). The law does not, however, provide for an opt-out mechanism in this case.

2.3 Insolvency law

Actions brought by an insolvency administrator or liquidator to annul fraudulent deeds carried out by the debtor is a special kind of class action, which benefits creditors registered in the insolvency procedure. The law does not, however, provide for an opt-out mechanism in this case.

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.

Except for sectoral collective claims detailed below where the law expressly provides that a specific entity is granted legal standing for certain claims, there are no specific rules for bringing claims under procedures outlined under questions 1 and 2. General procedural rules will apply for the other opt-in mechanisms described under question 1. For example, the claims must have a common cause or be closely linked; depending on the number of claimants or defendants the court may ask that one representative is named; opt-in actions filed through a representative (i.e., lawyer, association) will need to be based on a valid mandate of representation.

3.1 Consumer protection law

For opt-out class actions brought under consumer protection law, only the qualified entities provided by the law have legal standing to bring the respective claims.

Damage claims will be based on an opt-in mechanism and subject to the general procedural requirements detailed above.

3.2. Human rights law

The comments under item 3.1. above apply for claims brought under human rights law.

3.3. Insolvency law

Besides the judicial administrator or liquidator empowered to bring a claim for annulment on behalf of creditors in the insolvency procedure (as detailed under item 2.3), the creditor’s committee, as well as the creditor owning 50% of the receivables, also have the right to bring such a claim if the judicial administrator or liquidator has not already initiated class action proceedings.

3.4. Competition law

Under Romanian competition law, consumer protection associations are granted legal standing to act on behalf of consumers for the purpose of claiming damages caused by the infringement of competition law provisions. In addition, the law provides that professional associations and employer associations (asociatii patronale) can bring claims for damages for breach of competition law on behalf of their members, based on their competences (regulated under the statutory deeds of the association) and the mandate received for this purpose.

Consequently, even where the collective interests of multiple consumers or association members are considered, these types of damages will be representative only for the individual consumers or members of the association (and not for a “class”), which have granted a valid mandate for representation for the purpose of the damages claims.

3.5. Employment law

Pursuant to Romanian employment law, trade unions are entitled to defend the rights of their members protected by employment law, public officer statutes, collective bargaining agreements and individual labour agreements (among others), including before judicial courts, through their own defence representatives or through chosen representatives.

For the purpose of exercising these competences, trade unions have legal standing and the right to bring court claims on behalf of their members based on a representation mandate. The interested member may at any time before completion of court proceedings withdraw from the claim.

These types of claims will be representative only for the individual members of the trade union (not for a “class”), which have granted a valid mandate for representation for the purpose of the relevant claims.

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?

There are no official data on the number of class actions filed or other group proceedings, using either opt-in or opt-out mechanisms. Based on the publicly available information, cases of class actions have been rather limited. Such claims are typically brought in the banking sector and involve the cancelation of abusive clauses in contracts concluded with Romanian consumers, particularly in relation to bank-loan contracts in Swiss francs.

There is the possibility of legal changes that might lead to an increased number of cases in the next few years, taking into account that Romania will need to transpose in approximately 24 months the provisions of the EU Directive on representative actions for the protection of the collective interests of Consumers adopted in November 2020 (the “Representative Actions Directive ”).

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.

In principle, for opt-in mechanisms described under question no. 1, other than in the case of sectoral class actions, there are no relevant restrictions, except for general procedural requirements.

As for sectoral class actions, it follows naturally that they are specialised in:

  1. Consumer protection law: consumer protection cases (e.g., abusive contractual clauses);
  2. Human rights law: discrimination cases and protection of human rights;
  3. Competition law: competition damage claims for breach of Romanian competition law and the corresponding provisions of Articles 101 or 102 of the Treaty on the Functioning of the EU;
  4. Insolvency law: fraudulent deeds carried by the debtor at the expense of creditors;
  5. Employment law: protection of member rights under employment law.

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

Both damages and injunctions are available for claims brought under the opt-in mechanisms.

Under opt-out class actions in the field of consumer protection and human rights, claimants are entitled to injunctive relief only.

Competition damage claims can be filed as specified under item 3.1, while annulment claims under insolvency procedure have the purpose of obtaining a restitutionary order.   

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

In a claim for damages (both for collective action or an individual claim), the principle of full compensation will apply pursuant to general provisions of Romanian civil law.

Specific provisions on the quantification of damages apply in competition law damage claims pursuant to Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the EU (the “Damages Directive”), as reflected in national law.

As a rule, the court may not award a higher amount than the damage suffered.

8. Are punitive or exemplary damages recoverable?

Punitive or exemplary damages are not directly recoverable in a class action.

Punitive or exemplary damages are a specific type of damage under Romanian law (construed narrowly as a particular type of sanction, similar to a judicial fine), which can be awarded only by the court in the context of forced execution proceedings and subject to specific conditions being met, when: (i) a debtor has failed to perform its obligations to take a certain action or to refrain from a certain action and the damages are intended to compel the debtor to observe these obligations; and (ii) the respective obligations are personal to the debtor (intuitu personae). This would be the case, for example, where following a class action against a bank, the court orders the bank to remove the abusive clauses from the contracts in force and amend the contracts accordingly. If the bank fails to perform these obligations, the court may enforce its decision by ordering the bank to pay punitive damages per each day of delay.

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

Yes. Romanian law will need to be amended for the purpose of transposing the provisions of the Representative Action Directive. The most significant changes include the following:

  1. the Directive allows representative actions to be brought at the request of qualified entities designated by Member States. Currently, Romanian law provides only for limited qualified entities entitled to bring such claims;
  2. the Directive also makes it possible to seek the simultaneous assertion of unlawful actions and to seek compensation for damage. This means that the principles of initiating proceedings must be adjusted accordingly;
  3. the Directive also regulates issues not regulated in Romanian law concerning the financing of an authorised entity and the determination of the situation when this entity may be financed by a third party.

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

There are no special rules for the settlement of claims brought under either the opt-in or opt-out actions.

However, in the case of insolvency-based claims brought by the judicial administrator or liquidator, a settlement agreement would not be possible without the express prior approval of the creditors.

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?

There are no specific rules on jurisdiction. Provided that a Romanian court will take jurisdiction, there are no territorial restrictions limiting members of a 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?

In Romania, neither the opt-in actions (detailed under question no. 1), nor the other sectoral class actions (detailed under questions no. 2 and 3) have a “certification” stage requirement.

All claims will need to comply with general procedural requirements in terms of legal standing in judicial proceedings, interest in bringing the claim, legal capacity and the protection of a legal right.

In the case of opt-in actions / mechanisms (other than sectoral class actions) the claims must be closely linked (as further detailed under question 1) and there are specific provisions on court interventions (e.g., the legal standing and procedural deadlines of the person seeking to intervene in court proceedings).

As for sectoral opt-out class actions, since the qualified entities represent a class in general, the claims are evaluated according to the rights and legitimate interests of the class as a whole (i.e., not based on the impact on each individual consumer or person).

13. Do you have specialist courts for these procedures?

No, there is no specialist court for these proceedings.

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

Generally, there are no special rules that apply to class actions that broaden or narrow the scope of disclosure generally applicable to any civil case. 

The only exception concerns actions for damages for the infringement of competition law. Romania implemented the Damages Directive and its rules on disclosure of evidence provided will apply.

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

There are no special rules on appeals for any of the opt-in mechanisms or anti-competitive agreements-based claims.

Insolvency-based claims and class actions brought by the ANPC on behalf of consumers or by specialised consumer protection associations against abusive contractual clauses used by professionals and the insolvency-based claims can only be appealed once.

16. Can arbitration clauses lawfully contain class action waivers?

A class action waiver cannot be included in an arbitration clause. In addition, for sectoral class actions, an individual waiver (even if permitted) would have no effect in respect to the rights of the qualified entities, which are entitled to bring the claims by effect of the law.

17. Are contingency fee agreements permissible?

Contingency fee agreements are permissible for all civil group litigation mechanisms. However, under Romanian Bar rules, the contingency fee agreement must not be exclusively dependant on the outcome of the case.

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)?

Romania operates a cost shifting mechanism whereby the losing party is ordered to pay the winning party’s legal fees in full. 

The courts have a high degree of discretion on awarding costs and there is no cap on the amount of adverse costs that can be awarded. However, as a general practice, courts usually do not order the losing party to pay the winning party all of its costs, especially if the losing party is a consumer or if court considers it has insufficient financial resources.

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

Litigation funding is available for class action mechanisms. However, the Romanian market is underdeveloped in this respect.  

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Portrait ofHoria Draghici
Horia Draghici
Partner
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Laura Capata
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