Definition and concept of the class action
Die Class action is a special form of legal action in German and European law, in which certain legally capable associations or organizations – so-called associations – are entitled to sue in their own name or on behalf of their members. The objective is often to enable the enforcement of collective interests, especially in areas where individuals typically have difficulties in enforcing their rights. The class action serves to protect the general public, consumer interests, environmental concerns, or other legal interests that lie in the common interest.
Legal basis and areas of regulation
Consumer law and injunction
In German law, class action is provided for particularly in the area of consumer and competition law. One of the fundamental provisions is the Act on Injunctive Relief (UKlaG). According to this, qualified organizations such as consumer associations can take action against impermissible general terms and conditions or violations of consumer protection regulations.
Requirements for class actions under the UKlaG
- Only certain qualified organizations listed in the statutory register are entitled to sue.
- The objective is usually the prevention or elimination of legal violations, not the enforcement of individual claims for damages.
- The claim is directed against companies that violate consumer protection or competition laws.
Supplementary provisions in civil and antitrust law
In competition law (§§ 8 ff. UWG) as well as in antitrust law (§ 33 GWB), associations are also permitted to assert the interests of their members collectively in a legal action.
Environmental and nature protection law
Another area of application for class actions is environmental law. The Environmental Legal Remedies Act (UmwRG) grants recognized environmental organizations the right to review measures in their own name that violate environmental regulations. In such cases, this is usually known as objective judicial review.
Model declaratory action in civil procedure law
With the introduction of the Model Declaratory Action in 2018 (§§ 606 ff. ZPO), the class action was reinforced in consumer protection. With this form of action, qualified consumer associations can collectively pursue claims for a large number of affected consumers.
Legal requirements for class actions
Entitlement to sue
Only certain organizations recognized by statute or regulation are permitted to file class actions. A typical requirement is that these have existed for a considerable time, operate for the public benefit, and, according to their statutes, pursue the interests of the respective protected goods (consumers, environment, competitors).
Types of actions
The class action can be brought as an
- action for injunctive relief (§ 8 UWG, § 2 UKlaG),
- removal action,
- action for a declaration of nullity (§ 1 UKlaG),
- Model Declaratory Action (§ 606 ZPO),
A separate interest in performance or damages is not required – with the exception of newer forms of class action such as the representative action for relief.
Defendant
Most often, companies or authorities that violate consumer protection or environmental provisions are the target of a class action. In certain areas, such as environmental law, planning approval authorities may also be affected.
Procedure and special features of the class action process
Procedural special features
In civil proceedings, the rules of the Code of Civil Procedure generally apply to class actions, but with the following special features:
- The claim usually concerns the ceasing or determination of the unlawfulness of specified conduct.
- It is not necessary for the association to be individually affected.
- The judgment generally has inter parteseffect (between the parties involved), but may in practice have far-reaching consequences for a multitude of legal relationships or affected parties.
Costs and funding
The costs of a class action are generally borne by the plaintiff organizations. In many cases, they are financed through membership fees, donations, or government subsidies. Individual reimbursement of costs to those represented by the association is not provided for under German law.
Legal finality and binding effect
The final judgment of a class action binds the parties to the particular legal dispute. In the case of the model declaratory action, it is binding for all registered parties concerned. Direct enforcement of claims by individuals, however, typically only becomes possible in subsequent proceedings (“follow-on action,” “enforcement action”).
International and European legal aspects
European class action directive
The European legislature, with the Directive (EU) 2020/1828 has harmonized the framework conditions for class actions in the area of consumer protection law. In particular, the Directive aims to facilitate collective redress rights at the EU level, including the option of conducting redress procedures for consumers.
Implementation into national law
Germany has implemented the requirements of the EU Directive inter alia by the Act Implementing the Directive on Representative Actions (VRUG) and the introduction of the Representative Redress Action (Redress Action Act, 2023). This enables consumer protection associations to also assert direct claims – such as for damages or reimbursement – on behalf of affected consumers.
Significance and function of class actions
The class action is particularly relevant in cases where
- a large number of identical or similar violations of rights exist,
- individuals are unable to effectively pursue enforcement of their rights for legal, factual, or economic reasons,
- general (collective or public) interests are to be protected.
In this way, the class action contributes to strengthening collective legal protection and to the effective enforcement of consumer, environmental, or competition rights.
Criticism and legal-political assessment
The expansion of class action possibilities is viewed differently from various perspectives. Proponents see it as an effective means of legal enforcement in mass proceedings, for the protection of collective interests, and as a necessary supplement to individual legal protection. Critics point to the potential for abusive lawsuits and an impairment of entrepreneurial freedom of action.
Literature and further information
- Legal texts: Act on Injunctive Relief (UKlaG), Environmental Remedies Act (UmwRG), Act Against Unfair Competition (UWG), Act Against Restraints of Competition (GWB), Code of Civil Procedure (ZPO).
- Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers.
- Federal Office of Justice: Register of qualified consumer associations.
Summary: The class action is an efficient instrument of collective legal protection, enabling certain associations to conduct court proceedings in the public interest. Its scope covers, among others, consumer, competition, and environmental law. It is characterized by extensive national and European regulations and plays an important role in the modern legal protection system.
Frequently asked questions
Who is entitled to bring a class action?
According to the respective special statutory provisions, only certain qualified associations are authorized to bring a class action. In the context of German law, especially according to the Act on Injunctive Relief (UKlaG) and the Capital Investors’ Model Proceedings Act, these are generally registered associations, such as consumer advice centers or environmental associations. These must meet certain requirements, such as the pursuit of specific objectives (e.g., consumer protection, environmental protection), a sufficient number of members, and adequate organizational capability and independence. The precise list of associations entitled to sue is often maintained in official registers or determined by authorities. Individuals, as a rule, are not entitled to bring a class action.
What are the legal consequences of a successful class action?
Depending on the type of class action filed, different legal consequences can arise. In the case of an injunction based on the UKlaG, the court may, for example, prohibit the defendant from using certain unlawful clauses in contracts or from carrying out certain business practices. In the context of model declaratory actions under the Capital Investors’ Model Proceedings Act (KapMuG) or in mass proceedings within consumer protection, the court is able to clarify essential facts and legal questions in a binding way, which are then binding for subsequent individual lawsuits. In addition, certain types of class actions can result in the establishment of claims for damages or removal.
In which areas of law are class actions permitted?
Class actions are provided for in various fields of law, especially in consumer law, competition law, data protection law, environmental law, as well as in the area of capital investor law. Examples include injunctions against unfair business practices, model declaratory actions in consumer contract law, class actions under the General Data Protection Regulation (GDPR), or actions against environmental permits pursuant to the Environmental Remedies Act (UmwRG). The specific permissibility in each case is determined by the relevant legal basis and its regulated requirements.
What costs arise in a class action, and who bears them?
The costs of a class action mainly comprise court and attorney fees. These are initially borne by the suing association. In the event of a win, the losing party generally bears the costs of the proceedings according to the general principles of the Code of Civil Procedure (ZPO). Certain associations receive governmental support or can rely on special legal aid provisions. In some specific statutory procedures, such as in the field of environmental protection, special cost regulations exist which, for example, limit the cost risk for associations.
How is the class action procedure structured?
The procedure of a class action differs in certain points from ordinary civil proceedings. The association sues in its own name but in the interest of an indeterminate number of affected parties (collective legal protection). The proceedings are in principle public and often allow affected parties to join the procedure (in particular in model declaratory actions), so that the judgment has direct or indirect legal effects for them. However, the general procedural rules also apply here; specific provisions regulate, for example, publication of the claim, information duties towards potentially affected parties, as well as the keeping of registers of pending class actions.
What effect does a final judgment in class action proceedings have?
A final judgment in a class action proceeding generally has effect for and against the parties to the proceedings. Depending on the type of class action, the judgment can also be binding for third parties. For example, a judgment in an injunction procedure is not directly binding on individual consumers, but has a de facto precedent effect for future proceedings. In model declaratory action proceedings, the judgment is binding for all registered consumers with regard to the established facts and legal questions. The option of individual enforcement in a subsequent proceeding remains unaffected.
Can companies defend themselves against a class action, and if so, how?
Companies can defend themselves in class action proceedings in various ways. They can raise objections regarding the admissibility of the claim, the standing of the association, and the substantive-legal claims. They may argue that the challenged conduct is lawful or that the association is not sufficiently qualified. The defense is conducted as in civil proceedings, by way of a statement of defense and as part of the court process. In addition, there is a right of appeal or revision against a judgment in the first instance, allowing for multi-level judicial review.
