AUSTRIA Trends and Developments Contributed by: Bettina Knoetzl and Dr Kirstin McGoldrick, KNOETZL
Allocation of costs and third-party funding Funding of a representative action by third parties is now explicitly provided for in the Qualified Entities’ Act. There is no percentage limit for the share of the third-party funder. There are, however, certain restric- tions: (i) the third-party funder must not be a competi- tor of the defendant company nor must it be economi- cally or legally dependent on the latter; (ii) decisions made by the qualified entity in the proceedings may not be unduly influenced by the third-party funder to the detriment of consumers. The litigation funding agreement itself or its content does not have to be disclosed to the court, but only to the Federal Cartel Prosecutor at the latter’s request. It is expected, however, that there will be circum- stances when a court might order the production of the litigation funding agreement based on the general (anyway rather restrictive) rules for disclosure of docu- ments. Disclosure of evidence Disclosure of evidence has heretofore not been a part of Austria’s litigation culture or procedure. Against this background, Austria has decided against the introduction of a “discovery” procedure when imple- menting the EU Directive. This means that there is no enforceable obligation for the defendant company to provide evidence to the court. Instead, the normal procedural rules, with their rather limited means to force the opponent to produce documents or answer questions, apply. The lawmakers apparently rely on the further develop- ment of case law by the Austrian Supreme Court to relax the rules on the burden of proof for claimants who suffer from a detrimental information asymmetry and lack access to the relevant information without fault. This has been a clear trend in recent years and is expected to be further developed in particular in collective actions with fraud aspects involved. Redress settlements In the past, Austria did not offer a joint redress mecha- nism. In practice, however, all “class actions” ended with a settlement, be it in court or out of court. While courts undoubtedly put pressure on the parties to set-
either regarding the relief sought or concerning the underlying facts, or both. It is also expected that national qualified entities will compete with qualified entities which are qualified in another EU member state. Whether there will be a “run” to establish jurisdiction in Austria, is rather unlikely, given the vagueness of the new procedural laws and the (often prohibitively high) court fees in Austria. Suspension of limitation periods as key advantage One of the key advantages of the new instrument is the effect of suspending the limitation period for claims of the “consumers concerned”. This can be explained in more detail as follows. • A pending representative action for an injunctive measure has the effect of suspending or interrupt- ing limitation periods in respect of the consumers concerned by that representative action, so that those consumers are not prevented from subse- quently bringing an action for redress measures concerning the basis of the claim(s) because the applicable limitation periods expired during the representative action for those injunctive measures. • A pending collective action for redress has the effect of suspending or interrupting applicable limitation periods in respect of the consumers concerned by that representative action, retro- spectively from the date on which the representa- tive action was filed with the court. Following a legally binding rejection of a collective action for redress, a consumer who had joined this lawsuit has an additional period of three months to assert the claim in individual proceedings or by joining another collective action. This major benefit of the new law for consumers enhances the chances that the new instrument will develop into the most popular way to pursue claims of a larger number of consumers in Austria. Binding effect Redress measures entitle consumers to benefit from the remedies specified in the court decision without the need to bring a separate action.
26 CHAMBERS.COM
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