Dr Marcin Lemkowski: The Class Actions Act plays little role in everyday legal practice
An interview with Dr Marcin Lemkowski from the Dispute Resolution & Arbitration Practice on why so few class actions have been filed in Poland and whether they will likely become more numerous in the future.
Litigation Portal: It has been two years since the Class Actions Act entered into force in Poland. Would it be correct to regard the act as revolutionary?
Marcin Lemkowski: Definitely not. The act attracts a lot of attention in the media, and a little in the legal literature, but the act plays practically no role at all in everyday legal practice. It is an act that nearly every lawyer has heard about and a few have read, but probably just a handful of judges and litigators have applied the act in practice so far. The greatest service performed by the act is that it promotes access to the courts as such, encouraging citizens to file civil claims, somewhat along the lines of the universal call-to-arms in the golden age of the Polish Republic. In a group, spirits are high, and it’s easier to do battle alongside your comrades than single-handed.
So why has the act not caused a revolution?
That’s hard to say. No one knows whether there was really any need to introduce this type of act. Certainly it was patterned on procedures used in other countries, and was part of a gradual attempt to redirect the whole civil legal system in order to provide greater protection to the weaker members of society, such as consumers or accident victims. But before citizens attempt to pursue their rights, they first must be aware of their rights. Knowledge of the law is still not very widespread. Legal awareness is growing, but slowly, gradually, when a great leap forward is required. The state should educate the citizens more, and teach them what rights they have, in the area of public law as well as private law, because that is to a large extent the foundation of our current socio-economic system.
Perhaps some improvements should be made in the act, or should it simply be repealed?
No, radical or hasty changes in law are never wise. I believe that whenever a new procedural institution is introduced, lawmakers should go back every now and then to check on how the institution is faring in practice—not just based on scattered press reports, but based on a thorough analysis. The legislative process does not end when an act is passed into law. After that, the law must be applied in practice, and a searching review of how the application is proceeding is necessary. I imagine that two years after the Class Actions Act entered into force, all of the cases filed under the act should be reviewed in a published report (redacting the individual identifying details), so that the public can learn how the act is functioning. Transparency should become standard in the judicial system. Repealing the act would certainly be a poor solution, and it is too early to amend the act, especially without having a complete picture of how the act is being applied in practice.
It is true that the media report every now and then on filing of new class actions. Will the number of such cases increase?
That depends on whether events occur that are suitable for assertion of standardised claims against the same defendant. Based on events in recent days, a situation like that might arise if passengers did not receive refunds for cancelled flights or holidays. We read about such events in the press, and they might give rise to claims that would be suitable for pursuing under the Class Actions Act. On the other hand, if a business were faced with taking a decision that could result in violation of consumers’ rights, the threat of filing of a class action could act as an incentive to take the right decision—particularly to avoid a media firestorm or a long and costly class action. In this respect, the availability of class actions can serve a very beneficial function.
How should a company act if it reads reports in the press that its customers or suppliers are preparing to file a class action against it?
First of all, it does not speak well of a company if it is not aware of the problem until it reads about it in the newspaper. Every business needs to conduct ongoing monitoring of legal risks. In such a case, doing nothing can have catastrophic results. But once such disturbing information appears, the response must be swift. A legal analysis of the claims must be conducted, and if they appear to be well-founded, they should be satisfied before proceedings are commenced, e.g. through a settlement. The reality of litigation in Poland is that there are still too few cases being settled. As a nation, we are not fond of compromise.
But if the claims are groundless, the company needs to defend itself. In the case of class actions, the defence takes place in two stages. First, steps may be taken to avoid use of the class action procedure, because it cannot be applied to all cases. Then, if the class action is allowed to go forward, the case proceeds to the merits phase. At that point, the case will not differ very much from any other civil proceeding.