On June 27, 2019, the State Duma passed a federal law that introduced a new legal institution to protect the rights and interests of groups of individuals. Previously, there was no detailed regulation of class actions in civil law, and this gave rise to difficulties in legal actions affecting the interests of groups of people. Class actions are new to civil proceedings but not to commercial proceedings, so amendments have been introduced to the chapter on class actions in the Code of Commercial Procedure.

What is a class action?

A class action is a lawsuit that is filed by a group of people with the same matter of dispute and ground for claims.

The main characteristic of a class action is that it is possible to defend an entire group of people who have the same procedural status.

When filing a class action, the following conditions must be met simultaneously:

  • The defendant must be the same for all members of the class action;
  • General rights or the group members’ same rights and legal interests are the subject of dispute;
  • The group members’ rights and the defendant’s obligations stem from similar factual circumstances;
  • All group members have chosen the same defense to protect their rights.

What’s new in civil proceedings?

Having chosen a defense to protect their rights and legal interests, individuals and organizations with the same claims can now file a class action with a general jurisdiction court.

The defendant must be the same for all members of the class action, and the action must be filed with a court at the location of the defendant. Class action cases must be considered by courts within 8 months of their filing.

The group that files a class action must select a representative within the group to appear in court and conduct the case. No notarized power of attorney is required for such court appearance.

If the person representing the group drops the action, then his/her powers may be terminated by the court as well as at the request of most group members if it becomes apparent that the person representing the group is unable to conduct the case. Upon termination of powers, the court acknowledges the replacement of the person whose powers have been terminated.

Given that other persons may join class actions, information about class action filing must be published in the media. It is now also possible to post such information on court websites or the Russian Justice System portal.

A class action may be joined by submitting a written application to the person who appealed to defend the group members’ rights and interests. This can be done directly in court if the class action is joined after initiation of court proceedings. Applications confirming class action joining and affiliation with group members will need to be attached to the claim.

When filing a statement of claim, a body, organization or citizen who is not member of a group must refer to the federal law conferring the right to appeal to court to defend rights and legal interests of a group of people as well as indicate exactly what the interests of the group members are and specify the rights that have been violated.

For which disputes can a class action be filed with general jurisdiction courts?

Class actions may arise from various legal relationships, including disputes over:

  • Protection of consumer rights;
  • Compensation for property, moral damages;
  • Compensation for harm caused to health;
  • Labor relations;
  • Violation of environmental laws;
  • Unfair advertising;
  • Violation of tariff setting;
  • Discrimination and racism;
  • Protection of copyright, patent and other intellectual property rights.

The consideration of the above disputes is outside the competence of commercial courts – which are authorized to protect the group interests of entities engaged in business or other economic activity under the Russian Code of Commercial Procedure – but these disputes can now be considered as part of civil proceedings.

What changes were made to commercial proceedings?

The period for commercial courts to consider cases for protection of rights and legal interests of groups of people has been increased from 5 to 8 months.

It is now possible to join a class action before court pleadings by filling out a form on commercial court website or in the information system My Arbitr.

The person selected by the group to conduct the case may reassign the case administration to a representative, but the original representative of the group will even in this case be liable for the representative’s abuse of rights or failure to fulfill obligations in the proceedings.

Publishing in the media or on court website proposals to join a class action is now no longer a right but an obligation for courts.

Group members defending their interests in court have more rights and are now entitled to:

  • Review case materials, get extracts and copies from case materials;
  • Request that the person conducting the case for the group members be replaced even if the court has issued an order closing case examination on its merits;
  • Attend hearings, including closed sessions;
  • Drop filed application for joining action to protect the group members’ rights and interests;
  • In case of disagreement with the class action, intervene in the court case as a third party with no independent claims for the subject of litigation.

If an action is filed by a body, organization or citizen who is not a member of a group but who is entitled by law to go to court to protect rights and legal interests, then the Code of Commercial Procedure requires to refer to this law in the application. It is also necessary to specify the interest of the body, organization or citizen as well as the rights that have been violated.

Agreement of group of persons as a new concept in procedural law

The concept of “agreement of group of persons” has also been introduced in the Code of Commercial Procedure and the Code of Civil Procedure. A group of persons and the person administering the case in its interests specify in such agreement how legal costs are to be distributed. This agreement must be notarized.

After distribution of legal costs between the plaintiff and the defendant, the court will use the agreement to allocate costs to group members as set out in the agreement. If the court decision is rendered in favor of the group, then expenses will be recovered from the other party as set out in the agreement.