Collective Redress & Class Actions 2021

Last Updated November 09, 2021

Portugal

Law and Practice

Authors



Kennedys opened an office in Portugal in 2011 as part of its network in 24 countries around the world. The team in Lisbon is six strong and is comprised of four lawyers and two legal secretaries. As an international law firm, Kennedys ensures that all its employees embrace the firm's values of “approachable, straightforward, supportive and distinctive” which guide them in everything they do, defining how they interact and work with customers and each other. Specialised in dispute resolution and litigation, Kennedys has 2,300 employees worldwide in various areas of practice, including insurance, aviation, banking and finance, construction, health, labour, corporate, commercial, public sector, real estate, retail, international trade, sport, transport and logistics, travel and tourism. The team in Portugal has recently been acting for Generali, which had issued several insurance policies covering professional auditors' liability to certain policyholders who filed for coverage to pay the damages arising from lawsuits filed against the major Portuguese banks.

The Portuguese collective redress regime is known as ação popular. It is believed to have originated from Roman Law and was written in Royal Acts (Ordenações Manuelinas from 1521 and Ordenações Filipinas from 1603) as an instrument to protect public legal interests. 

Later, collective redress was mentioned in the constitution both in 1822 and 1826 and it finally materialised in the administrative code of 1842 as a means to check the legality of administrative actions (at first, only for electoral proceedings). 

In order to facilitate a more participative democracy, in 1976 (and later in 1997), the constitutional text broadened the number of rights to be protected as consumer rights and other communal rights, and this remains the case in the current version of the constitution. 

Portugal’s class action mechanism in its current form was created on 31 August 1995 as way to govern group interests. 

The Portuguese collective redress mechanism is mainly inspired by US and Brazilian collective proceedings and the Brazilian consumer act, respectively, Lei da Ação Civil Pública (Law No 7.347/85) and Código de Defesa do Consumidor (Law No 8.078/90). US class actions and Brazilian Ação Civil Pública have influenced the Portuguese regime in three specific ways:

  • the concept of group interests as material scope for the proceedings was imported from Brazilian law; 
  • the right to opt out of proceedings was imported from the USA; and
  • the flexibility of the res judicata effect on parties was taken from the US, wherecollective rulings are applicable to all parties (in Brazil, however, rulings do not apply in cases where they are not favourable to the right-holders).

The Portuguese government has not yet begun to transpose the new EU Directive on collective redress (the "Directive"). However, the current Portuguese regime shares many similar mechanisms to those prescribed by the Directive, such as the representative nature of the proceedings and the “opt out” mechanism.

Collective redress has existed in Portugal since August 1995 (26 years) and it is governed by Law No 83/95. This law provides a specific form of collective action where either individuals, or a group of individuals, associations, foundations, local authorities or, in respect of certain matters, the public prosecutor and the Consumer Protection Directorate, are allowed to bring an action on behalf of a larger group of people. This legal regime is called ação popular.

The collective redress law in Portugal applies to dispute resolution for cases of an administrative, civil and criminal nature. Potentially, the law could apply to all legal areas that have a communal interest at their core, as such matters may be pursued by way of a collective suit.

Law No 83/95 defines ação popular as the right to prevent, cease or pursue, in law, breaches of public health, environment, welfare (in a broader sense) and consumer rights laws, as well as other supra-material interests.

Portuguese law determines that any form of civil or administrative proceeding is admissible as a collective suit, usually through a common indemnity proceeding against a public or private entity in civil or administrative courts and then three higher courts (the Appeal, Supreme and Constitutional Courts).

Civil and Administrative General Procedure

The claimant commences proceedings by filing an initial petition (petição inicial) with the relevant court. The court will then summon the defendant, who has 30 days to submit a defence (contestação). If relevant new facts or witnesses emerge after the pleadings have been filed, the court will usually allow the parties to add them to their case. After both parties have filed their pleadings, a preliminary hearing is held. The court may decide the case at this hearing if no further proof is needed. This hearing is also an opportunity for the parties to reach a settlement. The judge will then set a date for a final hearing at which all the evidence will be submitted, as required.

Parties may call up to ten witnesses each. Witnesses usually give oral evidence, although written testimony may be accepted in exceptional circumstances. Expert evidence is admissible through a court-appointed expert or a panel of three experts named by the court and parties, where each expert produces an objective written report.

In the final hearing, the evidence is provided and scrutinised. The court then issues a judgment within 30 days.

Decisions of the district court may be appealed to the Court of Appeal if they are worth more than EUR5,000, and the decision is unfavourable to the appellant by more than EUR2,500. Decisions of the Court of Appeal may be appealed to the Supreme Court if they are worth more than EUR30,000 and they are unfavourable to the appellant by more than EUR15,000. However, a decision of the Court of Appeal which confirms the decision of the district court may not be appealed. If the Court of Appeal finds an error of fact in the district court’s ruling, it may either reverse the ruling or order the case to be heard again in the district court.

Procedures Specific to Collective Redress

After receiving the initial petition, and after consultation with the public attorney or/and preliminary enquiries, the case judge may rule against the matter if they consider the matter is very unlikely to succeed at trial. 

After admitting the initial petition, the court will serve (via public announcement or social media) all the right-holders with notice to join or opt out of the proceedings.

The claimant or the public attorney (whenever the claimant abandons the claim or presents a waiver in the proceedings) will represent all right-holders who have not opted out.

The parties’ actions and choice of evidence do not bind the court, which may take action to obtain proof of any kind.

Appeals in Portugal usually suspend the enforcement of a ruling (before it becomes final). However, the court may ultimately decide against any ruling in order to prevent irreparable damage arising out of the ruling’s enforcement.

Criminal Procedure

A claimant in collective redress proceedings may report or file a criminal claim with the public prosecutor and join criminal proceedings whenever criminal conduct is involved. 

Individuals or a group of individuals, associations, foundations, local authorities or, in respect of certain matters, the public prosecutor and the Consumer Protection Directorate, have the standing to bring a collective action on behalf of a larger group of persons.

Portuguese law foresees the concept of “diffuse interests” (in a communal sense), which is slightly different from “collective interest”, as the latter is directed towards individuals with a common legal connection (eg, members of the same association), while the former is solely based on a factual connection (eg, consumers of the same product). Therefore, in Portugal, right-holders of specific diffuse interests will determine the scope of any class for collective action purposes, with no limit on the number or any other formal requirements for class membership.

Right-holders may choose to “opt out” of participating in a proceeding when served via a petition from the court to that effect. These right-holders then have a chance to actively participate or exclude themselves from the proceedings. 

Every right-holder that has been appropriately served regarding the collective action will be joined to the proceedings if they haven’t opted out. Additionally, when individual rights (that extend beyond communal rights) are at stake, any interested third party may join the proceedings, as long as it is admitted by the court.

Portugal does not have test case proceeding mechanisms. Case management by the courts is ensured by allowing judges to freely order means of evidence and to make enquiries. Furthermore, the public attorney may act in place of the claimant whenever there is a risk that communal interests may be compromised.

The timetable for proceedings for collective suits is variable in Portugal. However, two to five years may generally be considered a "normal" timeframe for completion of these proceedings.

There are no mechanisms to deviate from the above-mentioned court timetable, however, in the appeal stage whenever the ruling’s enforcement may cause irreparable damage, the court may decide to suspend the proceedings.

Currently, third-party funding in Portugal is only limited by considerations of the general principles of good faith and public interest. These are two tests for third-party funding pursuant to general law principles that have evolved over time and are freely interpreted by each court.

The claimant in collective redress does not need to pay initial court fees. The payment of court fees and expenses is only triggered in the case of total loss in the proceedings. Such payments are stipulated by the court, considering the claimant’s financial situation (limited to a tenth, which is half of what would normally be owed). However, all claimants are liable for costs.

There are no pre-trial rules or privileges in civil and administrative proceedings, however, in criminal proceedings the court (by petition from the parties or public attorney) may determine that any facts or evidence that may breach relevant principles will be deemed as nullified.

Common remedies sought in collective redress are compensation, reparation or putting an end to unlawful behaviour. Normally, in collective redress cases the claimant seeks compensation from a company in the form of a monetary amount. Additionally, and more often in administrative proceedings against public entities, the claims may involve the claimant requesting the defendant to cease or prevent certain actions (against communal rights) or otherwise compelling them to take further action in that regard. Given that every civil and administrative proceeding may be sought to bring representative action, they may have an injunctive or compensatory nature. 

Portugal has well-developed alternative dispute resolution (ADR) mechanisms in place, but such mechanisms are limited to certain types of proceedings. Generally, these ADR mechanisms are however available in respect of collective redress suits.

ADR for Consumer Disputes

In 2015, EU Directive 2013/11/EU of 21 May 2013 on ADR for consumer disputes was implemented into Portuguese law via Law No 144/2015. Portuguese companies that offer goods and services have since then needed to inform consumers of ADR mechanisms. It was believed that this would increase not only awareness, but also the use, of ADR.

Other forms of ADR include compulsory arbitration, which is obligatory in certain situations as governed by Articles 1525–1528 of the Portuguese Civil Procedure, prior independent evaluation, expert examination, mediation and conciliation.

Settlements are generally encouraged and are accepted in Portuguese civil and administrative law. These have to be freely negotiated and drafted by parties at their sole discretion, to be confirmed later by a court ruling. In criminal law, a settlement may only be reached in cases that are not promoted by the public prosecution (eg, public crimes), even though the civil part of the claim may be settled. In collective proceedings, whenever a settlement is reached (or there is an ADR decision) and the claimant waives their case against the defendants, the public attorney may take part in the proceedings and act on behalf of the right-holders from there on.

Collective Arbitration Proceedings

Types of disputes that can be arbitrated

The EU Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters boosted the collective mediation scheme governed by Portuguese Law 29/2013. This law is applicable to labour collective negotiations arising from disputes regarding overarching agreements for employment conditions where workers are usually represented by a union or an association. Pursuant to Articles 526º–528º of the Portuguese Labour Code, the mediation proceedings are brought when both parties agree to do so or by the initiative of one party (after a month of formal negotiation proceedings) when it serves the other party with a written notice. This written notice must disclaim the origin and purposes of the proposed mediation. The mediation itself is carried out by a Ministry of Labour-appointed mediator (although parties may file a petition to appoint a mediator from a public arbitrators' list). After one of the parties has filed a petition for mediation, the mediator will notify the other party of the mediation’s objective and will decide if the mediation is viable, where there is disagreement about proceeding with the mediation. The mediator will notify the parties of its proposition for mediation 30 days after being appointed. The parties then have ten days to decide on the proposition and notify their decision to the mediator who will, in turn, notify each party of the decision within two days. 

Pursuant to Article 59º of the Portuguese Labour Code, other cases of collective negotiations that do not arise from disputes regarding overarching employment agreements may also be resolved by arbitration. In Portugal, arbitration is governed by the Voluntary Arbitration Act (Law No 63/11 of 14 December 2011, "PAL") which came into force in March 2012 and is based on the UNCITRAL Model Law (as amended in 2006), allowing for recent arbitration laws from arbitration-friendly jurisdictions and in line with the Portuguese legal system.

Generally, any dispute involving economic interests may be referred to arbitration. However, disputes that do not involve economic interests may also be subject to arbitration, provided that the parties are entitled to settle the disputed right. Public law matters are also arbitral, for instance, tax, administrative or public procurement law. The most common types of disputes determined by arbitrations are construction matters, M&A transactions, shareholders’ agreements, concession agreements and commercial contracts.

International nature of arbitration

Arbitration is considered international in nature whenever international trade interests are at stake (Article 49(1) PAL). Except for Chapter IX of the PAL, which is specifically dedicated to international arbitration proceedings, the provisions that govern domestic arbitration proceedings are also applicable to international arbitration proceedings. For the international arbitration agreement to be considered valid and referred to arbitration, it must fall either under the law chosen by the parties to govern the arbitration agreement, under the law applicable to the merits of the dispute or under Portuguese law (Article 51(1) PAL).  Chapter IX regulates the enforceability of pleas based on the domestic law of a party, the validity of the arbitration agreement, the rules of law applicable to the merits of the dispute, the impossibility to appeal the award, and international public policy.

Rules surrounding arbitration

Parties are free to agree on the number of arbitrators. However, the panel must be composed of an uneven number of arbitrators and, if the parties fail to agree on the number, the tribunal will default to three arbitrators (Article 8(1) and (2) PAL). Arbitrators must be individuals, have full legal capacity (Article 9(1) PAL) and be impartial and independent (Article 9(3) PAL). Nationality will not prevent a person from being appointed as an arbitrator.

Arbitration agreements must be in writing, however, the term "written" is given its widest possible meaning (Article 2 PAL). This requirement is met "if the agreement is recorded in a written document signed by the parties, in an exchange of letters, telegrams, faxes or other means of telecommunications which provide a written record of the agreement, including electronic means of communication" (Article 2(2) PAL) or "if it is recorded on an electronic, magnetic, optical or any other type of support, that offers the same guarantees of reliability, comprehensiveness and preservation" (Article 2(3) PAL). It can take the form of a standalone submission agreement (Article 2(1) PAL), an arbitration clause in a contract or by reference made in the contract giving rise to the dispute, to a document containing an arbitration clause (Article 2(4) PAL).

Parties and arbitrators have a great amount of power to create a "tailor-made" procedure. Parties may create the rules in the arbitration agreement or before the appointment of the first arbitrator. However, as soon as the first arbitrator is appointed, the ability to create rules is assigned to the arbitral tribunal exclusively. All procedural rules must ensure the procedural principle of equality of the parties, the right to defence and a fair opportunity to respond to all points of law and facts (Article 30 PAL). 

As a rule, courts cannot intervene in the arbitration and will only assist in the process in support of both domestic and international disputes. For instance, appointing arbitrators where parties fail to (Article 10(4) PAL), or removing arbitrators (Article 15(3) PAL), granting interim or urgent measures (Article 29 PAL), enforcing testimony or production of evidence from non-parties (Article 38 PAL), and recognising and enforcing foreign arbitral awards (Article 55 PAL).

Article 39 PAL covers the parties' rights of appeal. An appeal is allowable only if the parties expressly agree (Article 39(4)).

Generally, rulings on collective proceedings will have a res judicata effect on right-holders who did not opt out. Occasionally, however, the court may rule against this based on case-specific circumstances or where the claim was without merit and was completely dismissed on that basis. The ruling will be published (the losing party will pay publication costs) in two newspapers. Such newspapers will presumably reach and be read by any interested parties. However, the court is entrusted to require any other publication method that may be more suitable to the specific case in question.

Enforcement

This decision may be enforced via a specific enforcement proceeding where an enforcement claim form is filed and assigned to an enforcement agent (or a court official). That enforcement agent or court official will then promote or otherwise execute the terms of the ruling, for example, they may perform searches and seize assets from the losing parties. In the case of collective action rulings, where the defendants are required to adopt certain practices or take certain actions, if such actions are not complied with in the specified amount of time (usually disclaimed on the ruling or determined in a preliminary enforcement decision), the creditors may decide whether they want to pursue the action via a third party (paid with interest by the defendant) or to liquidate the damages they sustained and enforce the amount at that stage. 

All EU member states will adopt and publish the legal or administrative provisions necessary to implement into national law the EU’s Collective Redress Directive 2020/1828, no later than 25 December 2022, and will have to apply these provisions no later than 25 June 2023. The Portuguese government is yet to disclose details of its project to adapt the Portuguese ação popular to comply with this requirement and deadline.

Currently, Portuguese law does not contain any specific measures regarding cross-border litigation for collective redress or a proper cross-border harmonisation of proceedings, although member states will soon have to ensure that entities designated as qualified in another member state can bring representative action before their courts or administrative authorities. Also, the new Directive determines a larger number of interests to be protected: financial services, travel and tourism, energy, health, telecoms and data protection. The Portuguese government may have an easier task than the governments of some member states, however, as no structural changes to the current regime in Portugal are required.

It is most likely that the new collective redress directive will not be implemented in the UK, due to Brexit. This is something that was already anticipated by the EU member states, therefore it is unlikely that Portuguese legislation will go beyond the Directive’s cross-border mechanisms and try to extend the scope to UK-based consumers.

Surprisingly, COVID-19 has not hindered Portuguese consumers’ right of redress, as collective proceedings have risen considerably in number since December 2020. At that time, a few consumer rights' organisations were set up in Portugal, mostly financed by third-party funding. Since then, several collective proceedings against large national and international companies have started, such as: 

  • 2 December 2020 – Ius Omnibus v Mastercard (more than EUR400 million);
  • 14 December 2020 – Ius Omnibus v Super Bock;
  • 22 March 2021 – Ius Omnibus v Daimler/Mercedes-Benz;
  • 20 May 2021 – Ius Omnibus v Stellantis/Fiat Chrysler Automobiles;
  • 6 July 2021 – Ius Omnibus v Meliá;
  • 9 July 2021 – Ius Omnibus v Comcast/Universal Studios;
  • 12 July 2021 – Ius Omnibus v ANT (National Land Surveyors’ Association);
  • 19 July 2021 – Ius Omnibus v Apple (EUR137 million); and
  • 6 August 2021 – Ius Omnibus v EDP Electrical PT company.

Public awareness of collective redress mechanisms in Portugal has arguably also increased since December 2020. 

Kennedys

Avenida Eng. Duarte Pacheco
Amoreiras
Torre 1, piso 5, sala 5
1070–101 Lisboa
Portugal

+351 21 324 36 90

+351 21 324 36 99

Reception.portugal@kennedyslaw.com www.kennedys.com
Author Business Card

Trends and Developments


Authors



Kennedys opened an office in Portugal in 2011 as part of its network in 24 countries around the world. The team in Lisbon is six strong and is comprised of four lawyers and two legal secretaries. As an international law firm, Kennedys ensures that all its employees embrace the firm's values of “approachable, straightforward, supportive and distinctive” which guide them in everything they do, defining how they interact and work with customers and each other. Specialised in dispute resolution and litigation, Kennedys has 2,300 employees worldwide in various areas of practice, including insurance, aviation, banking and finance, construction, health, labour, corporate, commercial, public sector, real estate, retail, international trade, sport, transport and logistics, travel and tourism. The team in Portugal has recently been acting for Generali, which had issued several insurance policies covering professional auditors' liability to certain policyholders who filed for coverage to pay the damages arising from lawsuits filed against the major Portuguese banks.

The Impact of COVID-19 on the Portuguese Judicial System

Words like "COVID-19" and "pandemic" have entered people's lives in the most unexpected and abrupt way. Due to the increase in daily COVID-19 cases and the growing risk of infection with each wave of the pandemic, in Portugal, just like elsewhere around the world, several exceptional and temporary measures were adopted by the government in different areas, including in respect of justice and the courts. 

For example, as with many other governments worldwide, the Portuguese government enacted various "lockdowns", which led to the overall suspension of all court proceedings and court procedural deadlines. Consequently, it became urgent to equip courtrooms with technological equipment to enable remote proceedings, especially to allow urgent matters, such as those seeking to safeguard fundamental rights, freedoms and guarantees, to proceed during the pandemic without further delay. 

As the pandemic was brought under control, the Portuguese courts reopened with various precautionary measures such as the mandatory use of protective face masks in the courtroom, keeping a safe distance from another person, restrictions on the use of elevators, and so on.

After almost two years, the pandemic is now thought to be under control in Portugal and the courts have therefore totally reopened.

However, it is remarkable how profoundly and permanently the pandemic has changed the way the justice system in Portugal functions, leading to long-term digital and technological advances in Portugal’s judicial system. 

At this time, while not all Portuguese courts have been fully equipped with technological equipment, many of them are to allow remote proceedings going forward. 

In fact, the use of videoconferencing in hearings and trials increased substantially during the pandemic, and this remains the case today. Additionally, most judges have been allowing lawyers to intervene or participate remotely in some proceedings, like preliminary hearings, through the Webex system. 

The pandemic has also, by virtue of its general impact on Portuguese proceedings, irreparably impacted any representative actions or group actions that arose in Portugal. 

Backlog and concentration of cases in courts due to COVID-19

In contrast to the technological developments that COVID-19 ushered in, the pandemic has, on the other hand, led to inevitable delays in proceedings.

Despite the latest statistical data, published by the Direção-Geral da Política de Justiça (DGPJ) on 30 April 2021, which confirms a continued and consistent decrease in the number of pending proceedings in the judicial courts, both litigators and judges generally believe that there will be an increase in litigation in the coming years, especially in some practice areas, such as insolvency and bankruptcy, insurance and labour.

Increase in litigation

Due to the predicted rise in litigation in the coming years, the Portuguese government has created specific targeted measures to prevent ordinary people who struggled during the pandemic from being subject to litigation. For example, the government suspended the requirement to pay electricity bills and put moratoriums on housing loans in place during the lockdown, in order to help people who became unemployed or who had taken large cuts in their monthly income. 

However, these measures ended on 30 September 2021 and it is expected that there will soon be a massive increase in debts and insolvencies. 

For these reasons, to address what is predicted to be a high volume of civil litigation, on 6 May 2021 the government proposed extensive reform of the Portuguese Code of Civil Procedure (CPC). This amendment aims to further expedite the administration of justice in Portugal. 

The last amendment to the CPC was in 2013. 

With this new proposal, more than 50 articles regarding all the procedural stages which have a direct impact on day-to-day litigation will be amended. 

The impact of COVID-19 on litigation matters: “Proposta de Lei 92/XIV/2”

The proposed amendments to the CPC aim to focus on matters related to evidence, such as testimonial and expert evidence.

Specifically, with a view to expediting proceedings, the reform proposes to make it more possible for witnesses to give their testimony in writing, to limit the number of witnesses allowed to prove a single fact, to enable judges to orally notify parties of their rulings and to do so immediately after the trial (when facing simple matters), to abolish preliminary hearings and to reintroduce reply and rebuttal. The proposal also aims to further limit the procedural deadlines in appeals.

Among these changes the following are particularly important:

Limiting the number of witnesses

Prior to 2013 the CPC established that parties to proceedings could appoint no more than five witnesses for each legal fact they intended to prove. 

In the current CPC, there is no limit to the number of witnesses who may testify in regard to this single fact. 

Consequently, the intention of the proposed reforms is to reintroduce a limitation on the number of witnesses who may testify on each legal fact, although this does not prohibit judges from seeking further testimonial evidence should they have doubts regarding a certain fact. 

If this amendment is approved, however, there is likely to be a significant problem regarding the preparation and dynamic of hearings, since a "questionnaire", a practice which was abolished with the 2013 reform, will necessarily have to be reintroduced. 

The questionnaire is a detailed list of all the facts that have to be proved in the trial. Such questionnaires can be extensive and complex, affecting the speed of the proceedings in some cases (this was actually one of the reasons why the requirements were previously updated). 

With this concern in mind, the Associação Sindical dos Juízes Portugueses (the Portuguese Judges' Association) considers that this limitation makes no sense and is of no use whatsoever, and will, in fact, serve only to slow down the pace of proceedings. 

Witness statement in writing

Another proposed amendment concerns Article 518º of the current CPC which states that testimony may be given in writing when (i) it is impossible or extremely difficult for the individual to attend court, (ii) the judge authorises it, and (iii) if the parties agree. According to the proposed reforms, for a witness statement to be made in writing, it is sufficient that:

  • there is agreement on this by the parties; and 
  • the witness has knowledge of the facts due to the exercise of their functions.

In other words, with this amendment, authorisation from the court will no longer be necessary for witnesses to provide written, rather than oral, evidence in hearings. In addition, the reforms abolish the need to establish that it is either impossible or extremely difficult for the witness to appear in court to provide oral testimony.

Lastly, the witness does not need to have first-hand knowledge of the facts as a result of performance of their job or work duties. 

This proposed amendment affects the principle of immediacy and the need for oral forms of evidence, which are essential for the assessment of testimonial evidence.

For this reason, many are in favour of maintaining the existing requirements for proof of the difficulty or impossibility to appear in court, as well as the need for prior authorisation from the court, before allowing written evidence in lieu of oral testimony. The Portuguese Judges' Association has explained that for them, acting as professionals, the "assessment of a witness's testimony goes beyond verbal language, with his/her non-verbal language taking an essential role in the appraisal of the testimony and forming of the judge’s belief in each specific case".

Oral court verdict 

Another proposed reform is related to the possibility for the court to provide its verdict and sentence orally at the end of the hearing.

More specifically, the proposal aims to introduce an article to the CPC that says:

"Except in cases of manifest complexity, the sentence may be dictated at the hearing trial.

In the case provided above:

(a) the breakdown of proven and unproven facts may be made by reference to the procedural documents in which they are contained.

b) the sentence shall be limited to the decisive part, preceded by the identification of the parties and the summary justification of the proceeding."

We tend to agree with this amend, because it is a good way to speed up proceedings, especially when the matters under discussion are evidently simple.

Procedural deadlines in appeal

A further proposed change is related to procedural deadlines. The reforms seek to reduce the deadline from 40 days to 30 days in specific appeals. It is currently unclear how this measure will help to speed up proceedings.

These proposed reforms still need to be discussed and approved, but they are examples of how the government intends to improve the efficiency and pace of justice.

The impact of COVID-19 on class actions

COVID-19 has not hindered Portuguese consumers’ right of redress, as collective proceedings have risen considerably in number since December 2020. 

At that time, a few consumer rights organisations were set up in Portugal. Since then, several collective proceedings against large national and international companies have started, such as: 

  • 12 July 2021 – Ius Omnibus v ANT (National Land Surveyors’ Association);
  • 19 July 2021 – Ius Omnibus v Apple (EUR137 million); and
  • 6 August 2021 – Ius Omnibus v EDP Electrical PT company.

These proceedings were submitted by Ius Omnibus, a non-profit association, created in March 2020, with the aim of defending consumers in the EU. It is based in Portugal.

Public awareness of collective redress mechanisms in Portugal has arguably also increased and we think this will grow even more with the implementation into national law of the EU’s Collective Redress Directive 2020/1828 (the "Directive"). 

The EU’s Collective Redress Directive 2020/1828

The aim of the Directive is to ensure that in all EU countries there is at least one effective and efficient measure of collective redress for the protection of consumer interests against infringements at national and cross-border level. The Directive aims to contribute to fairer competition, the proper functioning of the internal market and, consequently, increased consumer confidence in it.

In Portugal, there are already mechanisms for redress and protection of the collective interests of consumers, such as popular actions (ação popular) and injunctions (ação inibitória) (DL No 446/85).

In brief, popular actions are an instrument to protect legal public interests. Injunctions, on the other hand, aim to protect the consumer through the assessment, and consequent invalidation, of contractual clauses in so-called "adhesion contracts", ie, contracts without prior individual negotiation, which consumers simply subscribe to or accept. 

The goal is for consumers to be informed and protected against unfair and prohibited contractual terms.

In our opinion, from a legislative point of view, the Directive will have the biggest impact in countries other than Portugal where there are no protection/repair mechanisms. At the same time, because the Directive itself does not prevent EU members from continuing to contemplate the procedural means they already have in their legal system, it is probable that it will not have a significant impact in Portugal. 

Even so, and bearing in mind that Portuguese consumers often have little knowledge of their rights as consumers (although this situation is gradually changing), we are convinced that the Directive will contribute to greater dissemination of the consumer protection mechanisms already existing in our law and that it will even strengthen them.

Kennedys

Avenida Eng. Duarte Pacheco
Amoreiras
Torre 1, piso 5, sala 5
1070–101 Lisboa
Portugal

+351 21 324 36 90

+351 21 324 36 99

Reception.portugal@kennedyslaw.com www.kennedys.com
Author Business Card

Law and Practice

Authors



Kennedys opened an office in Portugal in 2011 as part of its network in 24 countries around the world. The team in Lisbon is six strong and is comprised of four lawyers and two legal secretaries. As an international law firm, Kennedys ensures that all its employees embrace the firm's values of “approachable, straightforward, supportive and distinctive” which guide them in everything they do, defining how they interact and work with customers and each other. Specialised in dispute resolution and litigation, Kennedys has 2,300 employees worldwide in various areas of practice, including insurance, aviation, banking and finance, construction, health, labour, corporate, commercial, public sector, real estate, retail, international trade, sport, transport and logistics, travel and tourism. The team in Portugal has recently been acting for Generali, which had issued several insurance policies covering professional auditors' liability to certain policyholders who filed for coverage to pay the damages arising from lawsuits filed against the major Portuguese banks.

Trends and Development

Authors



Kennedys opened an office in Portugal in 2011 as part of its network in 24 countries around the world. The team in Lisbon is six strong and is comprised of four lawyers and two legal secretaries. As an international law firm, Kennedys ensures that all its employees embrace the firm's values of “approachable, straightforward, supportive and distinctive” which guide them in everything they do, defining how they interact and work with customers and each other. Specialised in dispute resolution and litigation, Kennedys has 2,300 employees worldwide in various areas of practice, including insurance, aviation, banking and finance, construction, health, labour, corporate, commercial, public sector, real estate, retail, international trade, sport, transport and logistics, travel and tourism. The team in Portugal has recently been acting for Generali, which had issued several insurance policies covering professional auditors' liability to certain policyholders who filed for coverage to pay the damages arising from lawsuits filed against the major Portuguese banks.

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