After the adoption of amendments to the Civil Procedure Code by the Parliament of Lithuania on March 13, 2014, a modern and detailed regulation of class action lawsuits came into force on January 1, 2015. After two years of its application, it is interesting to evaluate why this regulation was adopted and how it works in practice.
To begin with, before the amendments were enshrined in the Civil Procedure Code of Lithuania, there was only one provision in the Code that regulated class actions. This provision stated that a class action might be brought where necessary to protect the public interest. However, this one sentence was insufficient to bring a class action, because many necessary procedural safeguards were not created. Lithuanian scholars criticized the regulation, and finally, in 2012, the Ministry of Justice submitted a draft law on relevant amendments to the Parliament in order to create the prerequisites for class actions in Lithuania. The need for an adequate regulation of class actions was apparent, because there had been several cases where a number of claimants went to the courts with identical requests but were denied the ability to bring a unified lawsuit. When drafting the law, Sweden, Norway, and Finland were chosen as illustrative examples because their legal systems are similar to the Lithuanian system.
As a result of the amendments, the Civil Procedure Code now has a separate chapter devoted to class action lawsuits that regulates the main aspects of collective litigation
First, a class action may be brought only if a lawsuit is based on the same or similar factual background and seeks to protect the same or similar interests of a group of persons in the same way. Thus, the main characteristic of a class action, as in any other country, is that the claim relates to an alleged breach of the rights of multiple persons who decided to defend themselves collectively. Another condition of a class action lawsuit is the court’s determination that in a particular situation the class action will be more effective than individual lawsuits.
Second, after a class is formed, it must elect one member from within it – the so-called representative of the group – who acts on the group’s behalf. In some cases, the representative may be an organization – for instance, an association or a trade union. The group must also be represented by an advocate.
Third, Lithuania has chosen to implement a so-called “opt-in model,” meaning that a person is considered to be a member of the group only if he expresses his wish to join it. Therefore, the Code provides for detailed regulation of the fulfillment of group requirements. After the class action is accepted by the court, the judge gives up to ninety days for gathering and enlarging the group.
Fourth, the Civil Procedure Code provides for three types of court judgments in class action lawsuits. Usually, the court would adopt a general court judgment, mandatory for all the members of the class. However, where it is impossible to adopt one judgment because separate members of the group have different individual requests, the court first passes an intermediate judgment on the factual background common to the class and then subsequently rules on individual requests, without needing to re-establish the facts, which were already established in the intermediate judgment.
Thus, Lithuania now has detailed regulations applicable to class action lawsuits, drawn from the experience of advanced countries.
However, modernity does not guarantee effectiveness. Since the new regulations of class action lawsuits have come into force, there have been only a few attempts to bring a class action – all of which have been refused by the courts for failing to meet the aforementioned preconditions for acceptance.
There are many reasons why class actions are not popular in Lithuania. For one thing, in a small country like Lithuania, there simply would not be many to begin with. In addition, a determination whether or not a class action will be a more effective means to solve a particular dispute than individual cases is difficult to make in the stage of accepting the lawsuit, as the court has little opportunity to examine the case itself at that early stage. Therefore, Parliament should think of expanding the submission requirements.
By Adomas Kuncius, Manager of Litigation Practice, and Tadas Varapnickas, Associate, Tark Grunte Sutkiene Lithuania
This article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.