AUSTRIA Law and Practice Contributed by: Bettina Knoetzl and Dr Kirstin McGoldrick, KNOETZL
2. Legal Framework 2.1 Collective Redress and Class Action Legislation Representative Actions Under Sections 28 ff of the Consumer Protection Act and Section 14 of the Unfair Competition Act certain legal entities (“associations”, Verbände ) can bring legal action against unlawful business practices in dealings with consumers and against the use of unlawful general terms and conditions. However, representative actions brought in accord- ance with Sections 28 ff of the Consumer Protection Act and Section 14 of the Unfair Competition Act can only be used to seek injunctive relief and removal of the unlawful status ( Unterlassungs- und Beseitigung- sanspruch ). They cannot be used to assert claims for damages. Thus, such representative actions can con- trol future conduct but cannot grant damages for past harmful conduct. Under the newly implemented regime on collective redress, so-called “qualified entities” are entitled to seek injunctive relief against businesses for violations that harm or threaten to harm the collective interests of consumers (Section 5, paragraphs 1 and 3 of the Qualified Entities Act, in conjunction with Sections 619 ff of the Civil Procedure Code). However, at the heart of Austria’s only recently imple- mented regime on collective redress is the “represent- ative action for redress” (Section 5, paragraphs 2 and 3, line 1, lit b and line 2 of the Qualified Entities Act, in conjunction with Sections 623 ff of the Civil Procedure Code). This is a novelty in Austrian civil procedure law. It aims at providing effective procedural means to not only end unlawful practices threatening or harming the interests of many consumers but also to provide redress in any form. Under the new regime, consumers can participate in a representative action for redress if they actively join it (opt-in). Once at least 50 consum- ers have joined, the qualified entity can assert claims for all consumers who have joined. Upon a redress decision, the company is obliged to provide redress to the affected consumers, depending on the case, in the form of compensation, repair, replacement, price reduction, contract termination, or reimbursement of
Austrian-Type Mass Claim The Austrian-type mass claim has been developed by Austrian legal practice using specific provisions of Austrian substantive and procedural law. It is therefore an autochthonous tool. 1.3 Implementation of the EU Collective Redress Regime Representative actions under Sections 28 ff of the Consumer Protection Act and Section 14 of the Unfair Competition Act are transpositions into Austrian law of the EU Directive 98/27/EC on injunctions for the protection of consumers’ interests (repealed by Direc- tive 2009/22/EC). In 2013, when the European Commission published the non-binding recommendation on the introduction of collective redress measures, the discussion on the introduction of a “group action” (which was already included in a draft of a Civil Procedure Reform Bill in 2007) was relaunched. However, despite working groups being established in the Ministry of Justice, no practical implementation of this instrument took place. At the beginning of 2018, before the European Com- mission announced the draft directive for collective redress under the “New Deal for Consumers” in March 2018, two Austrian political parties respectively intro- duced draft legislation for “group proceedings” ( Grup- penverfahren ) and “representative sample declaratory actions” ( Verbandsmusterfeststellungsklage ). These initiatives remained proposals. With significant delay, Austria has now implemented Directive (EU) 2020/1828 on representative actions for the protection of collective consumer interests. On 18 July 2024, the Qualified Entities Act, along with amendments to the Austrian Code on Civil Procedure, the Consumer Protection Act, the Court Fees’ Act and the Lawyer’s Fees Act entered into force, providing a new system of collective redress for consumers. Rep- resentative actions under this new regime were imple- mented in addition to existing instruments. Therefore, representative actions under Sections 28 ff of the Consumer Protection Act and Section 14 of the Unfair Competition Act remain in force. Also, the Austrian- type mass action can still be utilised by consumers.
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