Consumer class action
Consumer class action
- A multiple number of consumers who incur damages, for example through the purchase of goods, may file for litigation against the responsible company as a collective group through the auspices of a consumer organization.
· A consumer class action is launched in cases where a business operator violates consumers’ life, physical, and property rights and where that violation persists. In such a situation, a consumer organization, business organization or non-profit organization that satisfies certain criteria assumes the responsibility for filing for litigation on behalf of the consumers in order to ban or stop the violation of consumers’ rights (Article 70 of the Framework Act on Consumers).
- Unlike group actions which are granted damage relief, in consumer class actions, the ruling’s effectiveness extends to stopping the sale of a company’s product(s), correcting unfair provisions and prohibiting other types of illegal corporate behavior. For example, a consumer class action may demand that the court suspend the sale of products that are dangerous to children’s safety or correct unfair provisions.
· Therefore, if a consumer seeks to receive financial compensation, each individual consumer must file a separate civil litigation privately.
Consumer class action procedures
Request to ban or suspend behavior that violates consumer rights
- A consumer organization seeking to file a consumer class action lawsuit must first request the business operator in writing to prohibit and suspend the infringement of consumer’s rights and interests. (Article 74(1)-3 of the Framework Act on Consumers).
Complaints and the submittal of applications for litigation
- A consumer organization that is filing a consumer class action lawsuit must submit the complaint along with the application for litigation permission to the district court's main collegiate panel having jurisdiction over the office, sales office, or the address of the company’s representative (Article 71(1) of the Framework Act on Consumers).
· If the target of litigation is a foreign business, then the complaint and the application for litigation permission shall be submitted to the district court's main collegiate panel having jurisdiction over the office, sales office, or the address of the company’s representative (Article 71(2) of the Framework Act on Consumers).
Permission for class action
- When a consumer class action is filed, the court shall give permission for the consumer organization to litigate if every requirement stipulated below is fulfilled (Article 74 of the Framework Act on Consumers).
· When there is a need, from the perspective of the public interest, to protect the rights of consumers and prevent damages, such as when the use of a good results in or is likely to result in harm being caused to the life, body or property of the consumer.
· When there are no faults, omissions or deficiencies in the application for litigation permission.
· When 14 days have elapsed since the organization (which filed the litigation) submitted a written request to the business operator calling for a ban or a suspension of actions that violate consumer rights.
Effectiveness of consumer class action
Effectiveness of consumer class action
- In the event of an objection to the ruling, a petition of appeal shall be lodged in court within two weeks of the ruling (Articles 396 and 408 of the Civil Procedure Act).
- If the final ruling by the court is a rejection of the claim by the consumer organization, then, with the exception of the following circumstances, other groups shall not initiate litigation proceedings for an identical issue (Article 75 of the Framework Act on Consumers).
· In the event that, after a ruling has been finalized, the results of new research or new evidence emerges from the agencies established by the national government or a local autonomous government.
· When the plaintiff intentionally induces a rejection ruling.