In 1998, in the aftermath of the most famous class action in history, Philip Morris and three other tobacco companies had to pay a $ 206,000,000,000 settlement covering medical costs for smoking-related illnesses.
The class action represents a lawsuit where a group of entities, usually a number of natural persons, are collectively represented by regulated organizations or attorneys to bring claims on behalf of the former.
The Romanian legal landscape recently had the class action institution regulated by means of Law no. 414 of 19 December 2023 regarding the conduct of representative actions for the protection of the collective interests of consumers.
In light of the new law, a legal non-profit entity (“Qualified Entities”) can represent any number of consumers in class actions initiated before the Romanian courts of law against professionals such as corporations, banks or other companies in order to obtain (i) damages and (ii) the discontinuation of illegal practices carried out in violation of the relevant consumer protection legislation.
With respect to the procedural aspects, the class actions initiated by Qualified Entities are exempt from the payment of judiciary fees and the first instance ruling is subject to appeal. The decision rendered by the appellate court is also subject to second appeal, which suspends the enforcement of the ruling.
If the respondent of the class action fails to respect the measures enacted by the decision rendered against it, Law no. 414/2023 regulates fines amounting to EUR 25,000.
Since the law came into effect as of 23 December 2023, Romanian companies have begun conducting in depth reviews of their internal policies and regulations to ensure compliance with all aspects of consumer protection legislation, a step which could have brought high benefit to the renowned tobacco company which acted as dramatis personae in the 1998 class action.
By Andrei Cristescu, Senior Associate, Musat & Asociatii
