Collective Redress & Class Actions 2022 Comparisons

Denmark introduced legislation on the subject of collective redress in 2008 and this legislation has not been changed since it was introduced. 

While Danish legislators looked at the experience with collective redress suits in many other jurisdictions, they found that the regimes could not be copied due to differences in legal systems. They found that while the USA had the most collective redress suits, the differences between the American and Danish legal systems could not be reconciled. Some inspiration was drawn from Swedish regulation, especially the strict legislation about group representatives that ensures that no unnecessary collective redress suits (so-called “nuisance suits”) are brought before the courts. 

The directive has not yet been implemented in Danish law, but when it is, it will not have a significant impact on Danish legislation as Danish law already shares many similarities with the new EU system. For example, Denmark has already appointed an entity that can represent consumers in collective redress suits, namely, the Consumer Ombudsman. Furthermore, the government can appoint other public entities to represent consumers, see Section 254 c, Section 1, No 3 of the Danish Administration of Justice Act (the “Justice Act”). There is also nothing to prevent organisations from EU countries representing consumers in Denmark as long as the legal venue of the suit’s claims is Denmark.

Collective redress suits in Denmark are regulated under Chapter 23 a of the Justice Act. This act contains almost all the legislation regulating court cases in Denmark. Chapter 23 a of the Act comprises Sections 254 a–k.

All types of civil cases can be brought as a collective action, although criminal cases cannot. However certain conditions, see Section 254 b, subsection 1 of the Justice Act, must be met in order for a collective redress suit to be allowed by the court: 

• the claims must be similar in essence, although they need not be identical; 
• the legal venue of all the claims must be Denmark; 
• the court has to agree that collective action is the most suitable way to address the claims;
• all the members of the class action must be identified; and
• a representative for the group must be selected to act as a party in the case.

If the group cannot comply with these criteria, the courts will not allow the collective redress suit to go forward and the participants must bring their claims individually.

In Danish law, collective redress suits are a separate form of legal procedure and, as such, a collective redress suit is a lawsuit that can be processed using the rules set forth in Chapter 23 a of the Justice Act. In other words, a collective redress suit is a lawsuit that meets the criteria set out in 3.1 Scope of Areas of Law to Which the Legislation Applies. 

The mechanisms for bringing a collective redress suit to court are the same as in every other court case, the difference being that the plaintiff, in their Statement of Claim, requests that the court will process the claim in accordance with the rules of collective redress. 

A collective redress suit can be brought in every city court, which is the same for all court cases. Certain collective redress suits can be brought before the Maritime and Commercial Court, namely cases concerning transportation, marketing, intellectual property and competition law. 

A collective redress suit begins like any other court case, with the handing in of a Statement of Claim. This must contain the request for the case to become a collective redress suit and can be handed in by anyone with the standing to be group representative. Besides the request, the Statement of Claim must, according to Section 254 d, subsection 1 of the Justice Act, contain:

• a description of the group;
• information about how the members of the group can be identified and informed about the suit; and
• a suggestion as to who can and wants to be group representative. 

When the group is identified, a collective redress suit proceeds in the same way as a “normal” civil case. Procedurally – once the group has been identified – there is no difference between bringing forth a normal court case and bringing forth a collective redress suit.

The group representative is the one with standing to bring forth the claim and act as the party in the suit. Section 254 c, subsection 1 of the Justice Act, sets forth that a group representative must be:

• a regular member of the group;
• a private organisation, where the purpose of the suit falls within the purpose of the organisation; or 
• a public organisation authorised by law to act as the group representative.

So far, the Consumer Ombudsman is the only public institution authorised to act as a representative in a collective redress suit. 

Danish legislation allows both opt-in and opt-out collective redress suits. 

If the suit is an opt-in suit, the court will determine a deadline for group members to opt in to the suit, see Section 254 e, subsection 6 of the Justice Act, although the court in special circumstances can allow someone to opt in after the deadline. Opting in to a collective redress suit is binding for the group member, which is why any potential group member must be informed of the legal effects of opting in.

The court can decide that opt-in is not the best mechanism for any particular collective redress suit. In such cases, the court can decide that the suit should be opt-out and will set a deadline for when potential group members must opt out of the group, see Section 254 e, subsection 8 of the Justice Act. However, in special circumstances, the court can allow someone to opt out after the deadline has expired. The group representative must be a public authority if the suit is to be conducted as an opt-out suit, however.

See 4.4 Class Members, Size and Mechanism (Opt In/Out). 

The court decides whether the suit is appropriate to become a collective redress suit and whether it should be an opt-in or opt-out suit. Furthermore, the court appoints the group representative and manages the deadlines for opting in and opting out.   

In opt-in suits the court can also decide that opting-in is conditional on the group member providing security – an amount decided by the court – for the legal costs of the case, in case the court gives judgment in favour of the defendant, see Section 254 e, subsection 7 of the Justice Act.

The length of the proceedings will depend on several factors (such as how many group members there are and how complicated the case is) but it is not unusual for the proceedings to take more than one year. 

There are no such rules in Denmark.

There are several methods of funding a collective redress suit. A number of these are open to individuals.

Funding

Legal expenses insurance

An individual can be covered by legal expenses insurance.

Legal aid

In certain cases, the government provides free legal aid and thereby commits to cover a person’s costs in connection with the case, if either the person or the case qualifies. A person can qualify for legal aid if their income is below the appointed minimum, which can be found in Sections 325 and 326 in the Justice Act. Such a person may not be covered by a legal expenses insurance and the case needs to either fall with the types of cases listed in Section 327 of the Justice Act or be of such a nature that it is essential for the applicant to take it to the courts, see Section 328 of the Justice Act. Free legal aid can also be provided if the case is of benefit to society or will have such an effect on the applicant that it is necessary that legal aid is provided, see Section 329 of the Justice Act, or if legal action is taken by a consumer who has been successful in an action before the Consumers Complaints Board or in certain taxation cases.

Third-party funding

On a group level, third-party litigation has been permitted by the Danish Supreme Court. Third-party funding is however not regulated by law, which means that there is, in principle, complete freedom of contract regarding third-party funding, as long as the governing contract for the third-party funding lives up to the general requirements for contracts in Danish law. Furthermore, the majority in the business and legal communities are sceptical of third-party funding and believe that increased use of it will lead to increased commercialisation of lawsuits and result in far more speculative suits.

Costs

With regards to who should pay the legal costs of the case, this is decided by the presiding court in accordance with the usual legislation concerning legal costs, see Sections 311–322 of the Justice Act. If the court finds in favour of the defendant, the group representative and the members of the group are jointly and severally liable. 

In opt-in suits, the court can decide that opting in is conditional on the group member providing security – an amount decided by the court – for the legal costs of the case, in case the court passes judgment in favour of the defendant, see Section 254 e, subsection 7 of the Justice Act. If the group loses the case, the liability of the group members is limited to this amount, see Section 254 f, subsection 3 of the Justice Act. 

The same rules of disclosure apply in collective redress suits as in any other court case. These can be found in Sections 298–301 of the Justice Act. 

As in any other court case, remedies can be the payment of damages, restitution or declaratory remedies. 

There are a number of out-of-court resolution methods available in Denmark. 

There are a great number of ADR mechanisms available before litigation. These mechanisms seek to settle a high number of small individual claims before they progress to the courts. If the defendant does not comply with these ADR rulings, the Consumer Ombudsman may take the question to court on behalf of the consumer or group of consumers. These court proceedings may be commenced over the same issues while ADR proceedings are taking place. The ADR proceeding would normally be stayed during litigation. There are no collective ADR mechanisms available. The ADR mechanisms available have worked very well in the past and there appears to be no reason to change them in the near future.

Once the Statement of Claim has been handed in, the parties can choose to settle the claim between them before the court reaches a decision. This is done as in any “normal” court case. 

A judgment in a collective redress suit is binding for the members of the group, see Section 254 f, subsection 2 of the Justice Act.

Usually, the parties comply with the judgment and there is no need for the courts to enforce it. If the losing party does not comply with the verdict, the Enforcement Court can enforce any verdict that prescribes the payment of money. If the verdict is declaratory in nature, another suit must be brought before the court to determine if this declaration should lead to damages. 

No policy developments have been proposed.

EU Directive 2020/1828 on representative actions for the protection of the collective interests of consumers shall be implemented into Danish law by December 2022. The Danish legislators expect to implement the Directive in such a way that the existing Danish legal system on class actions is maintained. The areas of the Directive that are not already regulated in Danish law will be implemented and introduced in a new Danish Act to ensure the minimum level of compliance.

Brexit has had no impact on collective redress suits in Denmark.

COVID-19 has had no impact on collective redress suits in Denmark, except that the processing of these suits may have been delayed due to the lockdowns in 2020 and 2021, during which the courts did not operate.