ULC: Disappointment meets expectations

Ten months after the publication of the State Council’s report, the government published proposed amendments to the draft law on class actions. The Union Luxembourgeoise des Consommateurs was anything but enthusiastic about this on Wednesday.

“The disappointment corresponds to the expectations of the ULC,” said the Luxembourg consumer protection agency. The core of the bill introduced by the previous government was “completely distorted”. For this purpose, it was intended to promote an amicable agreement between the parties by engaging a mediator for consumer transactions free of charge for consumers. In contrast to individual consumer disputes, for which the mediator for consumer transactions is responsible, class actions in consumer law in the new legal text are now subject to mediation by mediators approved by the Minister of Justice, whose services are subject to a fee for the parties.

Limited scope

In addition, the ULC regrets that the proposed amendments drastically limit the scope of application of the proposed law. Class actions would thus be limited to the area of ​​the Consumer Code. This would often make class actions in rental disputes and certain construction disputes impossible.

However, the ULC believes that it is necessary to ensure “that all aspects relating to consumer contracts (…) must be subject to class action proceedings”.

The only positive aspect of the proposed amendments is the fact that the exclusion of the financial sector from the scope, which was in breach of the Directive, has now been removed. Class action lawsuits against financial institutions are therefore conceivable. However, only organizations or associations that have received prior approval, such as consumer organizations, have standing to bring an action.

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