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Rethinking the Role and Power of Class Actions in Serbia

Rethinking the Role and Power of Class Actions in Serbia

Issue 10.6
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In recent years, the rise of mass lawsuits has placed a significant strain on Serbian courts. The most notable mass lawsuits, which first emerged in the mid-2000s, encompass a wide range of issues, from shift and night work disputes to overcharged fees for children’s daycare and discrimination against war veterans. Recent prominent cases have involved the nullity of loan agreement provisions on application-processing costs and auxiliary school staff’s entitlement to compensation for warm meals and holiday allowances. The rise of mass lawsuits carries profound legal and economic implications, sparking renewed initiatives for class action in Serbia.

In instances where an occurrence impacts the interests of many individuals, class action emerges as a crucial mechanism for providing comprehensive legal protections.  This instrument achieves at least three objectives. First, it ensures legal protection for those lacking sufficient financial or other resources to pursue individual legal proceedings. Second, it fosters overall societal efficiency by replacing thousands of identical cases with a central proceeding, thereby safeguarding the interests of all parties involved. It mitigates the proliferation of mass lawsuits, which burden certain courts, adversely affect their efficiency, and potentially jeopardize the right to a timely trial. Third, it helps prevent harmful conduct by making potential wrongdoers aware that they may be liable for redressing the consequences of their actions for each affected individual, ideally encouraging more cautious behavior.

Originally from the United States, this legal institution has recently been adopted by traditionally continental legal systems in EU member states and most Western Balkans countries.  The possibility of exercising collective judicial protection in litigation proceedings is now widely recognized as a critical facet of the right to a fair trial – an aspect currently absent in Serbian law.  A significant milestone in this area of EU law is the adoption of Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers, marking the first EU law to introduce class action in the style of the American jurisprudence.

In Serbia, it is expected that the legislature will prioritize the implementation of Directive (EU) 2020/1828.  As the directive establishes minimum standards, there should be no impediments for the Serbian legislature to develop a broader scope of applicability for class actions.  For instance, an issue that may arise is whether to restrict class actions to consumer protection or to broaden their application to other fields.  One such area is competition law, as violations can adversely impact not only individuals but a wide range of entities, including businesses.

Class actions, however, are not entirely unfamiliar to the Serbian legal system. The Civil Procedure Act of 2011 included provisions for Proceedings for the Protection of the Collective Rights and Interests of Citizens. Under these provisions, associations and organizations could represent specific citizen groups if their registered or legally prescribed activities included such protection. Yet, after a single attempt to initiate a class action on this basis, the Constitutional Court of Serbia declared the unconstitutionality of this procedure and excluded the possibility of its application in its May 23, 2013 decision (Decision).

This Decision, however, left room for a potential reintroduction of class action within the same constitutional context. Nevertheless, despite the clear purpose and function of class actions, achieving a suitable legislative framework for such lawsuits remains a formidable challenge. The Draft Amendments to the Civil Procedure Act in 2021 (Draft Amendments) were expected to support the implementation of class action. Although the professional community highlighted their numerous deficiencies, the published Draft Amendments did not contain provisions on the protection of the collective rights of citizens. This omission has left the professional community needing a draft legal framework to demonstrate what class actions could look like in Serbia, and we are still contemplating the potential role and power of class action in Serbia.

By Jovana Velickovic, Partner, and Nikola Ivkovic and Bojan Tutic, Associates, Gecic Law

This article was originally published in Issue 10.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here

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