Currently, there are three different class action regimes in Austria:
The first one is the so-called “Austrian-style class action” (Sammelklage österreichischer Prägung), in which individuals (not necessarily consumers) assign their claims (e.g., for compensation) to certain associations. Those associations subsequently bundle the claims and bring one lawsuit in their own name on behalf of the consumers.
Secondly, certain associations are entitled to bring a representative action (Verbandsklage), which is a claim for omission under the Austrian Consumer Protection Act (Konsumentenschutzgesetz, “KSchG“). Such associations can request injunctions against companies for using certain general terms and conditions or standard contracts in their course of business with consumers.
Lastly, third-party funded mass litigation is an increasingly common way of collective redress measures in Austria as the Austrian-style class action is not very practicable and involves certain procedural hurdles. The claims in third-party funded mass litigation are brought individually, and the litigation funders receive large portions of the claimed amount.
On 2 May 2024, the Austrian Ministry of Justice has published the draft law which shall transpose the EU Directive on representative actions (Directive EU 2020/1828, “EU Directive“). Although this directive came into force on 24 December 2020, it has not yet been implemented into national law. The new class action law will most likely come into force before the end of 2024.
The current draft law for class actions (Verbandsklagen-Richtlinie-Umsetzungs-Novelle “VRUN”) introduces many innovations and will probably replace the previous legal instruments (Austrian-style class action and representative action). Among other things, the draft law provides for the following:
- With the so-called Qualified Entities, the circle of those who will be able to bring class actions in the future will be significantly expanded. Recognition as a Qualified Entity is subject to certain conditions (such as independence) and requires recognition by the competent supervisory authority, which is the Federal Cartel Office.
- Qualified Entities can assert both collective injunctive relief and redress claims for consumers in court. With the redress actions, collective payment claims, which must be based on essentially similar facts, can now also be asserted against the same company. The prerequisite is the participation of at least 50 consumers. Both options are only available for consumer claims and therefore not for those of companies.
- An opt-in model is currently planned, i.e. consumers must expressly join a class action for redress. Withdrawing from a class action is not possible. By joining, the limitation period for the individual claim is suspended; this applies retroactively to the date on which the class action is brought.
- The Commercial Court of Vienna as a three-judge senate has exclusive jurisdiction for class actions according to the VRUN.
- Third-party financing of class actions is expressly permitted. The design of the respective funding agreements is subject to the private autonomy of the contracting parties and thus not specifically regulated.
- The draft law still has to be passed by the Austrian parliament. The Austrian Ministry of Justice plans for it to enter into force before the end of 2024.