Behind the name ‘Amendment to the Directive on the Implementation of Representative Actions (VRUN, Federal Law Gazette I 2024/85) is a legislative package that makes it possible to bring cross-border and domestic representative actions against companies. The centrepiece of the VRUN is the newly created Qualifying Entities Act (QEG). This authorises certain public bodies (so-called qualified entities) to bring representative actions.
The aim of the VRUN is to strengthen representative actions in order to ensure effective consumer protection in the age of digitalisation and globalisation.
1. Overview
The qualified bodies for the assertion of representative actions are generally the public bodies named in Section 29 KSchG, which were already authorised to do so before the VRUN came into force (333/ME XXVII. GP 6). These are primarily the WKO, the Federal Chamber of Labour, the ÖGB and the VKI.
What is new is that individual consumers can also participate in the representative action.
2. Qualified entities
The QEG defines two types of Qualified Entities: for cross-border representative actions and for domestic representative actions.
In order to be recognised as a Qualified Entity for cross-border representative actions, a legal entity must meet the following requirements (Section 1 (1) QEG):
- be active for more than 12 months prior to the application for the protection of consumer interests including rules in the articles of association,
- not for profit,
- not insolvent,
- in particular independence from entrepreneurs with an interest in a representative action,
- publicly accessible information about the organisation in clear and understandable language on the website
In order to be recognised as a Qualified Institutionfor domestic representative actions, a legal entity must fulfil 2 further requirements in addition to those listed above (Section 2 (1) QEG):
- it must appear certain that it will continue to fulfil its statutory tasks effectively and properly in the future on the basis of its past activities and its material, personnel and financial resources, and
- it does not obtain more than 20% of its financial resources from donations, unpaid financial contributions or gifts.
In both cases, the Federal Cartel Prosecutor decides on recognition as a Qualified Organisation (§ 1 para. 2 QEG, § 2 para. 2 QEG).
3. Centrepiece: collective actions for injunctive relief and redress
The QEG defines 2 types of claims: (Section 5 QEG).
- Claim for injunctive relief: This is aimed at the cessation and prohibition of unlawful behaviour by a company if this adversely affects or threatens to adversely affect the collective interests of consumers.
- Claim for remedy: This is aimed at a performance by the company. It is available if individual consumers have claims against the company as a result of unlawful behaviour by the company. The claim for redress is downstream of the claim for injunctive relief. At least 50 consumers must be affected by such behaviour in order for it to be asserted.
4. Accession by consumers
Any consumer with a corresponding claim can join proceedings for redress by means of a declaration of intervention (‘opt-in option’, see 333/ME XXVII. GP 16). The deadline for this is 3 months from the announcement of the implementation of the representative action procedure in the edict file.
It is impossible to withdraw from the association proceedings (Section 628 (5) ZPO).
5. Litigation financing by third parties
Pursuant to Section 6 QEG, the financing of a representative action by third parties is permitted. The qualified entity may even make the joining of consumers to representative actions dependent on the consumers concluding a contract with the third-party financier (Section 6 (1) QEG).
Important: The third-party funder may neither be a competitor of the defendant company nor be economically or legally dependent on it in any way.
6. Obligations of the Qualified Entities
Qualified organisations must maintain an updated website and must publish the following information there in a clear and easily understandable manner (§ 7 QEG):
- Statutes and notice of recognition
- Contact details
- The fact that they are a qualified entity and whether they are authorised to operate across borders or only domestically
- Statutory purpose and area of activity
- Sources of funding
- Organisational, management and membership structure
- Description of the procedure for preventing the exertion of influence
In addition, they must publish an annual activity report by 1 April of the following year at the latest, which must contain the following information (Section 8 QEG):
- Number and type of complaints lodged
- Type of infringements
- Results of the collective actions
Furthermore, they must provide information on their websites about court proceedings in preparation and pending, e.g. defendant, how to join the proceedings, results of completed proceedings (§ 9 QEG).
7. Litigation aspects - joining, publication, limitation period
Qualified organisations must prepare a form for joining association proceedings. This must contain information on the requirements, procedure, effects and anticipated costs of the proceedings. The joining fee may not exceed € 250. It must be possible to submit declarations of membership online and offline. (§ 9 QEG).
The Commercial Court of Vienna is the court of first instance for these proceedings. An agreement on the place of jurisdiction is not permitted (§§ 620, 630 ZPO).
The court must publish the decision on the conduct of collective action proceedings in the edict file. This publication must be deleted ex officio after 4 months (Section 627 ZPO). The winner of the proceedings can apply to the court for publication of the judgement. Where and how publication is to take place is determined in the judgement. The costs for this must be borne by the unsuccessful opposing party (Section 621 ZPO).
If a consumer joins proceedings for redress, the limitation period for their claim is suspended retroactively from the time the action is brought (Section 635 ZPO).
8. Conclusion
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