Greece: Law 5019/2023 for the Protection of Collective Interests of Consumers

Law 5019/2023 updates the law on collective interests of consumers. The New Law is expected to multiply representative actions of consumers against suppliers. 

Law 5019/2023 transposes Directive (EU) 2020/1828 into the Greek legal order. Said Directive harmonizes the law of member states regarding representative actions for the protection of collective interests of consumers (Government Gazette 27/A/14-02-2023).

Law 5019/2023 aims at updating the law on collective interests of consumers.

In that regard, the New Law updates the existing provisions of the 8th Part of Law 2251/1994 for the collective protection of consumers and a new reinforced mechanism for representative actions is introduced.

Provided that the conditions of Law 5019/2023 are met, associations of consumers, either domestic or with a registered seat in other member states, are entitled to file a representative action against consumers for the ceasing or prohibition of illegal behaviors and the compensation of consumers,being their members.

Representative actions may be filed not only for violations of general provisions of Law 2251/1994 but also for violations of sectoral legislation of various sectors of the economy.

1. Object & Scope

The New Law’s scope refers to:

• Representative actions against suppliers in case of violation of a series of provisions and pieces of legislation, being part of both national and European Union Law, (included in Annex II of the Law and indicatively related to violations of Law 2251/1994, to the protection of underaged consumers, to the liability of producers for defective products, to instructions for product use and for technical support after sale, to advertisement, to the liability of air carriers, to the protection of personal data, to illegitimate business practices, to rail passengers rights, to the liability of sea carriers, to the prospectus in case of securities’ public offerings  etc.), which causes, or may cause, damage to the collective interests of consumers, and
• Domestic and cross-border violations, including violations ceased before the filing of the representative action.

2. Representative Actions

“Representative Actions” are the actions for the protection of collective interests of consumers, which are filed by an eligible entity in the name and on behalf of consumers, for the purpose of taking measures for ceasing or prohibiting illegal behaviors on the part of suppliers, or for redress and/or restoration measures, or both.

Eligible entities are required to request at least:

• The ceasing or the prohibition of illegal behaviors of suppliers, even before it occurs, when it consists of a violation of Annex II of the New Law, which entails or might entail a damage to the collective interests of consumers,
• On a case-by-case basis, redress and/or restoration, particularly compensation, repair, replacement, price reduction, contract termination or reimbursement of the price paid.

3. Eligible Entities

 “Eligible entities” are:

• For the purpose of filing domestic or cross-border representative actions in another member state, the associations of consumers which have been registered with the Registry of Eligible Entities for the Filing of Representative Actions, and have been designated as eligible entities by the Ministry of Development and Investments.
• For the purpose of cross-border representative actions filed in Greece from other member states, •the associations of consumers or other organizations or public entities, which represent consumers’ interests and has been designated in the said member state as eligible entities for filing representative actions.

Associations of consumers:

• Must have a website,
• Must not be subject to any insolvency procedure and must not have been declared insolvent,
• Must be independent and must not be influenced by persons other than the consumers, particularly suppliers,
• Must make public, in a simple and understandable wording, by any appropriate means, particularly in their website, information that prove that they fulfill the above criteria regarding their financing sources, their organizational and managerial structure, the structure of their members, their statutory purpose and their activities,
• Must keep books,
• Must prove twelve (12) months of actual public activity for the protection of consumers’ interests, before the submission of the request for their designation as eligible entities, and
• Must publicize information about their 12-month actual public activity, by any appropriate means, particularly in a website, in a simple and understandable wording.

4. Measures to cease or prohibit illegal behaviors

Initially, the associations of consumers are entitled to request provisional or definitive measures in the form of injunctive measures or ordinary actions to cease or prohibit suppliers’ practices that violate Law 2251/1994 and Laws specified in Annex II of the New Law.

As an evidentiary facility, the New Law stipulates that eligible entities are not obliged to prove the actual loss or damage of individual consumers, nor are they obliged to prove the supplier’s intent or negligence.

Definitive measures to cease or prohibit illegal behavior may include:

• A decision that the practice consists of a violation of Annex II, and
• An obligation to make the decision public, either in full or in part, in the form that is specified as appropriate by the court, or an obligation for a corrective declaration by the supplier. 

In addition, the eligible entity is entitled, by means of the action to cease or prohibit a supplier’s behavior, to further request the payment of compensation as a civil sanction for the demonstrated illegal behavior.

For the above measures, individual consumers are not required to consent to the representation by the eligible entity. This is an opt-out mechanism pursuant to the provisions of Directive 2020/1828.

If the action requesting civil sanctions is irrevocably rejected as manifestly unfounded, the defendant supplier may itself have recourse against the association of consumers within 6 months starting from the date where the rejecting decision was rendered irrevocable and may request compensation or non-pecuniary damages to be paid by the association of consumers and personally by the members of the association's BoD, which resolved the filing of the action and which are severally liable.

5. Redress and/or restoration measures

In addition, the associations of consumers may file actions for the provision of means of legal protection by suppliers to consumers, such as compensation or non-pecuniary damages, repair, replacement, price reduction, contract termination or reimbursement of the price paid.

For the purpose of filing an action for redress or restoration, individual consumers must express their explicit consent for representation by the eligible entity and for binding themselves by the action’s outcome, until the submission of written pleadings. Subsequently, the eligible entity submits, along with the written pleadings, the certifications of consent of individual consumers. This process relates to the opt-in mechanism for the filing of the action for redress and/or restoration, pursuant to the provisions of Directive 2020/1828.

Furthermore, for any consumers that have not provided their consent ab initio, the Law adopts another opt-in mechanism which can be used at a latter point in time.

If the court decision rendering redress and/or restoration becomes irrevocable, the individual consumer, who did not express its explicit consent, either at the filing of the action or at the submission of written pleadings, may benefit from the redress and/or restoration measures, based on the following process:

• Within the deadline specified by the court decision, the consumer should notify the supplier, against whom the decision was rendered, about its claim, referring the elements that specify it.
• After 30 days from the written notification, in case the consumer is not satisfied by the supplier, •it may file a petition to the General Secretariat for Commerce along with appropriate documentation.
• •Provided that the consumer, who did not express its explicit consent ab initio, is entitled to benefit from the court decision, the competent organ of the Ministry of Development and Investments issues a decision calling upon the supplier to proceed to redress and/or restoration within 5 days. If the supplier does not comply within the determined timeframe, the same competent organ issues a decision for the imposition of sanctions.

6. Compromise

• For the approval of a compromise in a representative action for redress and/or restoration, the eligible entity and the supplier may jointly propose to the court a compromise scheme regarding redress and/or restoration in favor of interested consumers.
• The approved compromise schemes are binding for eligible entities, suppliers and interested individual consumers. 

7. Procedural Issues

A representative action requesting the ceasing, or the prohibition of illegal behavior is filed within an exclusive deadline of one (1) year from the last demonstration of the illegal behavior which consists of its basis, provided that it took place in an evident manner, so as to be known by the average consumer. 

The court which is competent ratione loci for the adjudication of representative actions is the multi-membered first-instance court of the supplier’s residence or registered seat.

The court may order the provisional enforcement of the decision. The legal consequences stemming from the decision are in force erga omnes, even if they did not participate in the process before the court.

Representative actions requesting the ceasing or the prohibition of illegal behavior are adjudicated pursuant to the non-contentious procedure, while representative actions requesting redress and/or restoration are adjudicated pursuant to the ordinary procedure. 

Eligible entities are obliged to provide sufficient information regarding the consumers for the benefit of whom they are filing a representative action, so as for the court to be able to examine if it can sustain jurisdiction, and to determine applicable law. 

8. Information for Consumers and Financing of Actions

Eligible entities which file domestic and cross-border representative actions are obliged to provide information, particularly in their website, regarding the representative actions filed, their status and outcome.

Directive 2020/1828 stipulated that member states have the discretion to enact rules on the possibility of third-party-funding of representative actions. Nevertheless, by means of article 8 of Law 5019/2023, the Greek legislator explicitly excluded said possibility for the Greek legal order.

9. Conclusion

Globalization and the digital transformation of economy have increased the risks for consumers by illegitimate business practices.

In that context, the New Law is expected to contribute to the reinforcement of consumers’ trust and to the boosting of consumers with regards to the exercise of their rights. Further, it is expected that it will drive towards a fairer competition and towards a level playing field within the internal market.

The New Law sets a higher threshold for the protection of consumers, equipping them with a more effective mechanism for collective action against consumers who extensively proceed to illegal or illegitimate commercial practices.

At the same time, the New Law is expected to supplant the obstacles faced by consumers when acting individually, such as the uncertainty about their rights and about which procedural mechanisms are available, psychological reluctance to act, and the negative balance of the expected costs relative to the benefits of the individual action, thus promoting collective action. 

The Government Gazette of Law 5019/2023 is available here.