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Update: draft bill on the extension of the access to collective claims to SMEs

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08/03/2018

This update summarizes the main features of the draft bill extending the access to collective claims under Belgian law to SMEs. Please note that this headline is provided for general information purposes and cannot be considered as legal advice. Should you have any questions or wish for legal advice in this respect, please feel free to contact us at any time.

1. BACKGROUND AND STATUS

The collective action was introduced into Belgian law by an Act of 28 March 2014, following the EU Recommendation 2013/396/EU on collective redress mechanisms dated 11 June 2013. To date, only groups of consumers (represented by a group representative) are allowed to bring collective claims for damages before the Belgian courts in case of collective damage.

Following the evaluation of the Act on the one hand and the recent Fipronil crisis in the EU on the other hand, the Belgian government decided to extend the scope of the collective action under Belgian law. Accordingly, on 1 September 2017 the Belgian Council of Ministers approved a preliminary draft bill extending the access to collective actions to small and medium-sized enterprises (SMEs). On 26 October 2017, the Council of State issued its opinion on the draft bill. On 22 January 2018, a new draft bill was submitted to the Chamber of Representatives so as to take into account the comments of the Council of State. The draft bill was adopted by the responsible committee on 6 March 2018 and is soon to be put to vote in plenary session.

2. WHO CAN ACT?

A group of SMEs injured as a result of a common cause, represented by a group representative acting on behalf of the group. In case both consumers and SMEs decide to act in the same cause, the two groups will have to be represented separately.

Within this context, SME’s are defined – in accordance with the EU Recommendation 2003/361/CE on SMEs – as enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.

The following entities can act as group representative: (1) an inter-professional organisation having legal personality and defending the interests of SMEs, that is either represented in the High Council for the Self-employed and the SMEs, or authorized by the Minister of Economy; (2) a non-profit organisation authorized by the Minister of Economy which has been existing for more than 3 years; or (3) a representative entity designated for this purpose by a Member State of the EU or EEA, that meets the requirements set out in paragraph 4 of the Commission Recommendation 2013/396/EU on collective redress mechanisms dated 11 June 2013. Commercial companies and law firms are therefore excluded as they do not meet these criteria.

3. FOR WHICH MATTERS?

As was previously the case, collective actions can only be brought for alleged violations by an enterprise of its contractual obligations or of specifically enumerated Belgian and European Rules.

This list includes provisions included in:

  • the sections of the Belgian Code of Economic Law relating to competition law, price developments, market practices, consumer protection, payment and credit services, safety of products and services, intellectual property and electronic economy; or
  • special legislations regarding privacy protection, electronic signatures, insurance, health, professional liability, banking and finance, tour operators, passenger transport, energy, product liability, among others.


It is important to note that on 6 June 2017, the scope of the class action regime was extended to include infringements of EU competition law (articles 101 and 102 TFEU including the ban on cartels and abuses of dominant positions).

It can be expected that most collective actions brought by SMEs will be based on violations of (Belgian/EU) competition law or unfair market practices.

4. OPT-IN OR OPT-OUT

The group of SMEs will be composed pursuant to the same rules applicable to consumers.

The court will decide between the opt-in procedure, whereby SMEs specifically opting into the action can benefit from it, or the opt-out procedure, whereby all SMEs affected by the breach benefit from the action unless they specifically opt out of the group. That said, the opt-in procedure is compulsory for SMEs who do not have their principal offices in Belgium.

5. COMPETENT COURT

Pursuant to the draft bill, the Brussels Commercial Court (and on appeal, the Brussels Court of Appeal) will have exclusive jurisdiction to rule on collective actions. As such, collective actions can no longer be initiated before the Court of first instance.

6. ENTRY INTO FORCE

The extension will be applicable to all cases introduced after the date of the entry into force of the act introducing the extension,provided that the alleged breach occurred after 1 September 2014.