Abuse of class action and defence against it

Keywords: class action proceedings, class action lawsuits, abuse of class action, plaintiff, authorised person, consumer organisation, defendant

Abstract: The author of the article highlights the somewhat tarnished reputation of the class action institute. The legislation has faced criticism since being drafted, from both the general public and experts, who have criticised the institute of class action itself. The criticism is often based on the negative experiences from foreign jurisdictions or on the overall setup and concept of the bill, which was meant to prevent the misuse of class actions as a tool for gaining a competitive advantage in the market or as a means to enrich claimants and lawyers. The article critically analyses the plausible options of abusing the class action system in the context of the legal bill of the Class Action Act from 2022. The author first outlines a list of the most discussed and questionable options of how the class action institute can be abused, the essence of which, however, the author rebuts by referring to the rational framework of the Class Action Act 2022 bill. The article then introduces the various defence mechanisms used to prevent the misuse of class actions lawsuits, in particular the conditions imposed on the claimant and the mandatory legal representation, certification proceedings, the role of the court, preliminary measures designed to address the dissemination of information, and the costs of proceedings. The author emphasises the protective and defensive mechanisms established by the proposed Class Action Act, which prevent the misuse of class actions, while contrasting these with the obvious risk that the strictly defined conditions and standards imposed on the claimants may prevent, or at least potentially limit, the use of class actions.

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