SLOVENIA Trends and Developments Contributed by: Bojan Brežan, Marko Frantar, Maks David Osojnik and Špela Lovšin, Schoenherr Slovenia
organisation filing the action is qualified to bring a col- lective action in the first place. The organisation must be non-profit and the court must determine whether the organisation will be acting in the best interest of the group members. Further, when assessing whether such organisation satisfies the representativeness requirement, the court will (among other things) examine: • the organisation’s independence and whether the it is under the influence of persons who are not members of the class, in particular whether the entity is under the influence of persons who have economic interest in bringing a collective action or a collective settlement; • the organisation’s financial and human resources and legal know-how to pursue the action on behalf of all group members; • the activities already conducted by the organisa- tion in relation to the collective action or organising or communicating with individual group members; and • the number of group members that have already backed the organisation’s activities in relation to the case in question: • the entity’s media presence and dissemination of information about the alleged violations and its intention of bringing a collective action for dam- ages; • any conflicts between the sub-groups of affected persons; and • the existence and activities of other entities that may have standing to bring the case and any experience they may have with pursuing collective claims. The representativeness test does not apply in instanc- es where a collective action is brought by a higher state attorney. If contingency fees have been agreed between the organisation and their lawyer (representing them on the case), the court will – as part of the action certifica- tion proceedings – also need to examine whether this agreement is reasonable. In assessing its reasonable- ness, courts should take into account, in particular, the complexity of the dispute, the amount of risk assumed
by the lawyer in relation to the costs and complex- ity of the dispute and the rights of the members of the class to receive full compensation. Additionally, whenever the collective action is to be funded by a third party (including lawyers), the court would also assess whether provisions on conflict of interest and other restrictions have been complied with. Although in force for some years already, a collective action still remains an untested instrument in Slovenia. The Collective Actions Act provides a platform for col- lective redress, and its applicability and more prolific use in the future are not in question. Notwithstanding, it will be interesting to see how case law will address the above-mentioned issues and any others that arise in practice. Third-Party and Lawyer-Funded Collective Actions Among the notable drivers of collective actions are the rules on litigation funding. One of the distinctive features of the Collective Actions Act is the possi- bility of a lawyer-funded litigation. Subject to statu- tory requirements (notably the reasonableness test), the law permits an up to 15% contingency fee which is calculated against the aggregate total damages awarded by the court. It is noteworthy that procedural/litigation costs are limited in collective action proceedings. By virtue of express statutory provision, costs are calculated only against 20% of the actual quantum. This serves to ensure that the cost of the proceedings will not dis- incentivise qualified entities from bringing collective actions. A by-product of this rule is a reduced exposure for funders of the collective action in the event the case is lost. Indeed, publicly available information suggests that the majority of recently initiated collective actions have relied on external funding – more specifically, these have been lawyer-funded cases. In addition, the Collective Actions Act also permits funding from third parties (ie, other than lawyers). However, as far as is publicly known, none of the col- lective actions brought before Slovenian courts to this date have relied on third-party funding. This is not sur- prising given that, until the adoption of the Collective
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