In Slovenia, collective actions have been possible since October 21, 2017, when the Collective Actions Act (CAA) came into force. The need for regulating collective actions was recognized not only due to the implementation of Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers’ interests but also because of specific cases from practice.

In practice, there were increasingly cases where many individuals were harmed in a substantially similar manner. Such cases particularly arose in the areas of consumer rights, investor rights, financial services, competition, environmental protection, and workers’ rights. Therefore, in addition to injunctions, which were mandated by Directive 2009/22/EC, the legislator also regulated compensatory claims in 2017.

In the described cases, individuals’ claims were generally low, and the costs of individual proceedings were not proportionate. Individuals chose not to enforce low-value claims because they lacked knowledge, and the costs of hiring legal experts to represent their interests were disproportionately high compared to the value of the claims. It simply did not pay off for individuals to pursue their low-value claims through lengthy and expensive individual court proceedings. Consequently, for these and other reasons, claimants were passive and did not assert their claims at all. All of this meant that the right to judicial protection was theoretically guaranteed through individual proceedings, but for the reasons just explained, it was not enforceable. Mass harm occurred, for which the responsibility of the violators was never asserted. Violators were aware of this and therefore were not motivated to align their actions with regulations and abandon actions causing mass harm. Administrative coercion in civil relationships is not a rule, and there was no deterrent effect from pursuing claims in individual civil court proceedings due to the beforementioned economical reasons.

The legislator saw an additional reason for regulating collective actions as in the case of mass harm, there could be an overload of courts in a relatively short period when individual claims would be asserted, potentially inundating the courts with many individual actions.

Prior to the CAA, existing procedural institutes did not allow for an adequate and collective response to the aforementioned problems. Only individual proceedings were possible, based on the concept of two parties, the plaintiff and the defendant, who asserted only their own rights. An action on behalf of another person or in favour of an unspecified group of people in the above-described cases was not permissible.

Therefore, in 2017, the legislator enabled collective court proceedings. It defined eligible claimants who, in certain cases of harm or labour law claims, can file a collective action on behalf of all harmed in the same case of mass harm. The regulation aims to improve access to judicial protection and eliminate passivity and economic reasons for not asserting claims, consequently deterring violations. Such regulation is also expected to increase the bargaining power of potential plaintiffs, thereby increasing the effectiveness of judicial protection by potentially avoiding court proceedings and relieving the burden on courts through the conclusion of collective settlements. It shall be noted however, that collective settlements require approval of the court to have effect.

The regulation of collective actions in Slovenia is based on the principles of collective enforcement of claims, the dispositive nature of such enforcement and the adversarial process, the principle of applicability of opt-in or opt-out system with regard to the harmed, the promotion of alternative dispute resolution, the certification of collective action for damages brought, the active role of the court in safeguarding the interests of the class, procedural flexibility and judicial discretion regarding process adaptation, cost recovery on the basis of success, and the principle of appropriate distribution of damages.

The CAA addresses the eligibility for bringing collective actions or proposals for approval of collective settlements as a procedural eligibility.

Procedural eligibility to bring a collective action or proposal for approval of a collective settlement is recognized for private legal entities engaged in non-profit activities, where there is a direct connection between their main operational objectives and the rights allegedly infringed and in relation to which the action is brought. Such private legal entities may include consumer or other organizations of individuals, such as organizations representing individuals affected by environmental disasters or harmed investors, and workers’ unions. The CAA also allows for the possibility that multiple such private legal entities may bring the same collective action or proposal for approval of a collective settlement.

Additionally, the State Attorney of the Republic of Slovenia may bring a collective action or proposal for approval of a collective settlement. However, this would not occur if the Republic of Slovenia is the defendant, and it is otherwise difficult to imagine many cases initiated by the State Attorney.

The key amendment to the CAA, in effect since 26 January 2024, is that in Slovenia, a collective action or proposal for approval of a collective settlement may also be brought by an entity whose founding purpose justifies it to bring a collective action or proposal for approval of a collective settlement and which actually represents consumer interests in another EU member state, where it is listed as an eligible entity in accordance with Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC.

The jurisdiction to decide on collective actions and proposals for approval of collective settlements lies with the district courts at the seats of the appeal courts. These are the District Court in Ljubljana, the District Court in Maribor, the District Court in Celje, and the District Court in Koper. The appellate courts and Supreme Court have jurisdiction to decide on remedies against decisions of the first-instance courts.

For deciding on collective actions and proposals for approval of collective settlements in labor law cases, the competent court is the labour court. The appellate labour and social court, as well as the Supreme Court, have jurisdiction to decide on remedies against decisions of the first-instance labour courts.

Collective actions and proposals for approval of collective settlements are permissible in cases of mass harm resulting from violations of consumer legislation, antitrust violations, breaches of trading rules on organized markets and related abuses, environmental incidents, as well as in cases of claims by employees against employers.

The collective action can encompass claims for compensation (i.e. collective action for damages) or an injunction against certain practices (i.e. collective action for injunctive relief). Only collective actions for injunctive relief are admissible in discrimination cases.

Collective settlements are only permissible concerning claims that could be the subject of collective actions for damages. The CAA requires that a collective settlement, among other things, includes the aggregate damages amount from which individual damages will be paid to each harmed. Additionally, it must contain precise rules for asserting and adjudicating individual claims for payment.

The legal landscape continues to be stirred by the surge in collective actions. As of the close of 2023, a notable tally of 23 collective actions had been set in motion, initiated since 2021 by three consumer protection organisations. Of the latter, one is responsible for instigating 14 collective actions, a remarkable feat considering its inception just prior to its inaugural collective action filing.

While the aggregate count of collective actions may appear modest, it merits attention that this figure equates to 1.15 actions per 100,000 inhabitants. Presently, these collective actions remain in their nascent stages, with only two of them having traversed through the first-instance proceedings. Notably, one of these was recently appealed, promising to potentially shape jurisprudence in 2024 on the pivotal criteria concerning the requirement of representativeness of non-profit entities that may instigate collective actions.

Among all collective actions brought in Slovenia so far, the most focus is on allegations that the defendants are engaging in unfair practices when dealing with consumers or otherwise violate consumer protection regulations. The brought collective actions relate to planned obsolescence of electronic devices, nullity of contractual provisions in credit agreements concerning floor interest clauses, and nullity of contractual provisions in subscription contracts with telecom operators, which enable them to raise monthly subscription fees.

The CAA encompasses both, opt-out and opt-in. While the plaintiff may propose the use of a particular system, the court is not bound by its proposal and may select a different system. The court decides on the choice of system in the decision on the certification of the collective action for damages or in the decision approving the collective settlement.

In determining whether to apply the opt-in or opt-out system, the court considers all circumstances of the specific case, particularly the value of individual claims of the class members and circumstances essential for the approval of the collective action for damages.

If at least one of the claims in the collective action for damages relates to the payment of immaterial damages or if, according to the assessment contained in the collective action, at least ten percent of the class members claim payments exceeding EUR 2,000, only the opt-in system may be applied.

For individuals who do not have a permanent residence or seat in the Republic of Slovenia at the time of issuing the decision approving the collective action for damages, the opt-in system is always applied.

To initiate proceedings, it is necessary to meet the conditions for certification of a collection action for damages. Although any eligible entity, as described above, can file a collective action, the court will only approve the collective action for damages of a representative plaintiff, provided that certain other conditions, as detailed below, are met.

A collective action for damages must assert homogeneous claims on behalf of a determinable class, concerning the same, similar, or related factual or legal issues for the entire group, which predominate over individual issues affecting only individuals. The claims must relate to the same instance of mass harm, and their treatment in a collective proceeding must be more efficient than individual proceedings. The class must be sufficiently numerous to make the enforcement of their claims most effectively achieved through collective action proceedings. The plaintiff must be representative (see more to the representativeness below). The claim raised by the collective action must not be clearly ill-founded. The financing of the collective lawsuit must not contradict the requirements of the CAA, and the remuneration agreement between the plaintiff and its legal counsel must be reasonable and consistent with the CAA.

The plaintiff must be representative, meaning it is an appropriate representative of the class that will act fairly and appropriately and in the best interests of the class. The court assesses this, in particular, by considering the plaintiff’s decisional independence, adequate financial resources, human resources, and legal knowledge for representing the class, activities to inform the class about the violation and activities aimed at encouraging voluntary cessation of violations and compensation for damages, activities regarding collective settlement or collective action, and organizing and communicating with members of the class before bringing the lawsuit, demonstrated support for the plaintiff’s activities by the class, media presence, dissemination of information, and transparency.

In proceedings concerning collective actions, plaintiffs have access to all legal remedies available in regular civil proceedings. They may appeal any decision or judgment of the court of first instance. Significant are the decisions on certifying the collective action or approving the collective settlement, as well as the decision confirming the list of class members. Requests for review by the Supreme Court may be brought if permitted by the Supreme Court filed when a significant legal question exceeding the importance of the specific case is demonstrated, when there is inconsistent case law, or when the case is otherwise important for the development of case law.

The CAA generally does not allow for the enforcement of punitive or exemplary damages, but the subject of the claim can only be actual incurred damage. However, punitive or exemplary damages cannot be entirely excluded in cases where they are determined by substantive regulations governing the permissibility of actions (e.g., consumer protection regulations, regulations on preventing anti-competitive practices, environmental regulations, labour law regulations). The CAA does not regulate this issue; therefore, the relevant substantive regulation would apply.

The system of jury trials in civil proceedings, which also encompass collective actions, does not exist in Slovenia. Generally, decisions regarding collective actions and proposals for approval of collective settlements are made by a single judge. Exceptionally, the judge may propose to the president of the appellate court that the matter be referred to a panel of three judges for decision if it involves complex legal or factual questions.

The amount of compensation awarded in collective actions is governed by general rules of tort liability. Compensation is awarded for actual reduction of assets and/or prevention of asset increase. For physical pain, mental anguish due to diminished life activity, disfigurement, defamation of character, or infringement upon freedom or personal rights, or death of a loved one, the harmed is entitled to fair monetary compensation, regardless of the reimbursement or existence of material damage.

The CAA does not regulate the issue of jurisdiction. General rules apply to determine the jurisdiction of Slovenian courts for collective actions. A Slovenian court will have jurisdiction for a collective action if it has jurisdiction over the dispute in accordance with Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. It will be competent, for example, if the jurisdiction of a Slovenian court is established under the rules for consumer contracts. It will also be competent if the place where the harmful event occurred or may occur is in Slovenia. A Slovenian court will have jurisdiction if the jurisdiction of Slovenian courts has been agreed upon. If no agreement on jurisdiction has been reached, the court will have jurisdiction if the place of performance is in Slovenia, and in cases where the defendant has its registered office or permanent residence in Slovenia. The above is not an exhaustive list of jurisdiction examples in relation to Slovenian courts, as a Slovenian court may also have jurisdiction in other cases under the Regulation and other conventions, as well as national law on private international law and procedure.

The CAA does not specify that plaintiffs in collective actions must be citizens or residents of the Republic of Slovenia. A plaintiff in collective actions before Slovenian courts can be anyone, regardless of citizenship or residency. The same applies to members of the class; however, for class members who do not have a permanent residence or seat in the Republic of Slovenia at the time of the issuance of the certification decision, the opt-in system is applied. This means that the judgment deciding on the collective action will only have effects on them if they declare within the court-determined deadline that they are joining the collective action proceedings. Similarly, the effects of collective settlement would apply to members of the class who do not have a permanent residence or seat in the Republic of Slovenia only if they submit a declaration on accepting the effects of the settlement.

The latest amendment to the CAA implemented the Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC. The CAA must be interpreted in accordance with the Directive and the CJEU has jurisdiction for preliminary rulings which may be referred to it by the Slovenian courts in relation to the Directive.

The CAA enables and encourages alternative dispute resolution for subject matters, which is or could be the subject of a collective action. The conclusion of a collective settlement is possible at any stage of the first instance as well as appellate proceedings. A collective settlement can also be concluded even if a collective action has not yet been brought.

A collective settlement is a written agreement for the compensation of collective damage caused in the event of mass harm, concluded by one or more eligible persons in favour of the injured parties and one or more violators. Only compensatory claims can be the subject of a collective settlement. The collective settlement cannot be subject to any conditions. The CAA specifies precise requirements regarding the content of a collective settlement.

The signed collective settlement gains legal effect for the members of the class upon court approval. The intention to bring a proposal for the approval of the collective settlement must be published on the website of the eligible person. The court also publishes the submitted collective settlement on the online registry of collective actions.

A collective settlement can only be concluded by a representative eligible person, meaning it is an appropriate representative of the class that will act fairly and in the best interests of the class. The court assesses this, particularly by considering the plaintiff’s decisional independence, adequate financial and human resources, and legal knowledge for representing the class, as well as activities aimed at informing the class about the violation, encouraging voluntary cessation of violations, and compensating for damages, organizing and communicating with class members before bringing the lawsuit, demonstrated support for the plaintiff’s activities by the class, media presence, dissemination of information, and transparency.

All parties to the collective settlement must jointly submit it to the court together with their proposal for approval. The court verifies whether the collective settlement contains all the elements required by the CAA. If the collective settlement is incomplete, the court requires the motion for approval to be corrected or supplemented. If the collective settlement is not adequately corrected or supplemented within the specified period, the court dismisses the proposal. If necessary, the court schedules a hearing for the correction and supplementation of the collective settlement. The court also dismisses obviously inadmissible proposals for approval of a court settlement.

The court informs the members of the class about the collective settlement, which is not obviously inadmissible and is complete, selecting the method of notification. Class members may send written opinions and proposals regarding the collective settlement to the court, and the parties to the collective settlement are given the opportunity to comment on them. The court then considers all such proposals and statements at the hearing for approval and decides on the approval of the collective settlement. The court notifies the harmed of the approved collective settlement and sets a deadline for individual harmed to opt-in or opt-out of the effect of the court settlement. There is no right to appeal against the decision to approve the collective settlement, so after the opt-in or opt-out deadline expires, the distribution of damages follows.

Collective actions can address various life situations, including unfair business practices affecting consumers, as well as antitrust practices. In cases like these, decisions of EU institutions or national regulators are important in proving the wrongful conduct of the defendants. This further eases the position of the plaintiffs, as they only need to prove the remaining elements of tort liability, especially the damage and the causal link between the wrongful conduct and the incurred damage.

No, no such collective action has been brought in Slovenia.

The CAA allows for the funding of collective actions by legal counsels as well as other entities considered third parties in relation to the proceedings. A third party may provide the plaintiff with funding for some or all the costs in exchange for an agreed premium in the event of success with the claims.

Practice has shown that the original provisions on funding in the 2017 CAA needed to be supplemented. Therefore, the CAA now stipulates a requirement for greater transparency and requires that the plaintiff must disclose the source of funds intended for funding the proceedings.

The agreement between the funder and the plaintiff is subject to the court’s review when deciding on the certification of a collective action for damages. It must be ensured that there is no conflict of interest between the plaintiff, the class members, and the funder, and that the funder does not influence the procedural decisions of the plaintiff, including settlement decisions if they are not in the class members’ best interests. Funding of a collective action brought against a competitor or a parent company of the funder is prohibited. The funder must demonstrate that it has sufficient funds to fulfil its obligations to the plaintiff and reimburse the costs of the opposing party.

The premium for funding is usually determined as a percentage of the amount awarded by the court or as a share of the settlement amount. Therefore, contingency fees are permissible. The premium agreed for funding must be reasonable given the circumstances of the specific case. In assessing the reasonableness of the premium, the court considers the complexity of the dispute, the extent of the risk assumed relative to the costs and complexity of the dispute, and the class members’ right to full compensation for damages. If funding is provided in the form of a loan, the premium is deemed unreasonable if the funder’s return exceeds the statutory interest rate for default interest in the Republic of Slovenia.

In collective action proceedings, a party that is unsuccessful must reimburse the opposing party for its costs, including legal counsel fees, any costs for evidence secured before the proceedings, the costs of translations submitted to the court, court fees, expenses related to the appearance of witnesses and their lost earnings, as well as advances disbursed for expert opinions obtained during the proceedings. The right to reimbursement of costs is proportional to the success in the proceedings and is calculated as a percentage of the value of the disputed subject matter by which each party succeeded compared to the claimed value of the disputed subject matter.

While the other aforementioned costs are equivalent to actual expenses, reimbursement of legal counsel fees is capped upwards by the attorney tariff. This means that the party to the proceedings that may have an agreement with legal counsel that deviates from the tariff, cannot be recovered any fees exceeding the tariff from the opposing party.

Although the Collective Actions Act (CAA) is still a relatively new law, it was amended in 2023. The amendment, which came into force on 26 January 2024, represents a significant step forward in aligning the country’s legal framework with Directive (EU) 2020/1828 on representative actions for protecting the collective interests of consumers. This comprehensive revision introduces pivotal changes aimed at bolstering consumer rights enforcement, enhancing legal recourse mechanisms and fostering a more unified European market.

Among the novelties, it is necessary to mention the broadening of the scope of collective actions to encompass all violations of consumer rights, extending procedural eligibility for initiating collective actions to foreign entities, facilitation of cross-border collective actions, enhanced criteria for determining the representativeness of eligible entities, strengthening transparency, and detailed rules on financing of collective actions.