Ius Omnibus welcomes the recent ruling of the Portuguese Competition Court in the ABanca case, which represents a major milestone in the affirmation of the Association’s legitimacy to bring collective actions in Portugal and defend consumers’ rights across the European Union.
In the detailed order, the Judge concludes that Ius Omnibus fulfils all legal requirements for active legitimacy established in the Popular Action Act and Private Enforcement Act (LAP/LPE). Recognising that the new Collective Redress Directive and its transposition (LAC/RAD) do not apply in this case, the Judge proposes to fill what she views as a gap in the law by introducing an additional requirement of independence of qualified entities in relation to funders and applying the new rule of LAC/RAD by analogy.
Following this approach, the Court narrows down its remaining inquiry on Ius’ legitimacy to a single question, about which it intends to seek clarification from the Court of Justice of the European Union (CJEU)
Whether EU law opposes national laws that allow a representative action to be brought by an entity whose only registered income comes from third-party funding, including for payments to Board members?
The Court will take the chance to further ask the CJEU (recognizing that Ius’ legitimacy does not depend on this question):
Whether EU law opposes the option of the Portuguese legislator of remunerating the funder from the undistributed part of the global compensation, namely in opt out actions.
The Judge emphasised that the effectiveness of consumers’ right to compensation, particularly in competition cases, can only be ensured through opt-out mechanisms and third-party funding.
This ruling results from an exhaustive judicial examination of the legitimacy of Ius Omnibus, in reaction to allegations by companies who challenge Ius’ legitimacy so that they can avoid compensating consumers. It is, therefore, very significant that, after extensive evidence gathering and legal analysis, the Court has reduced the discussion to that issue.
This referral will contribute to settle the debate on funding and independence across Europe, strengthening legal certainty for all ongoing and future collective actions.