Yes, Spanish law provides a class action mechanism. However, there is not a unified regulation for this matter. The Code of Civil Procedure (Act 1/2000, of January 7, the “CCP”) sets out different rules for some of the main procedural matters, such as legal standing, intervention, publicity, claim preclusion and enforcement. Special rules for different aspects of class actions are also provided in the Consumer Protection Act (Royal Decree-Law 1/2007, of November 16, the “CPA”), the Act on General Terms and Contractual Conditions (Act 7/1998, of April 13, the “AGTCC”), and the Spanish Unfair Competition Act (Act 3/1991, of January 10, the “UCA”). Due to the incohesive nature of all these rules, legal loopholes and difficulties in their implementation arise.

However, on March 12, 2024, the Council of Ministers approved the Draft Organic Bill on measures relating to the efficiency of the Public Justice Service and collective actions for the protection and defence of the rights and interests of consumers and users (the “Draft Bill”), which, in addition to regulating other matters (such as the new judicial organization in Spain or alternative dispute resolution mechanisms), it establishes a special procedure for processing class actions for the protection of consumer rights and interests.

The Draft Bill is aimed at transposing into Spanish law Directive (EU) 2020/1828 of the European Parliament and of the Council, of November 25, 2020, on representative actions for the protection of the collective interests of consumers (the “Directive”), which revokes Directive (EU) 2009/22/EC, and, similar to the current regulations, applies exclusively to consumers and users.

Prior to this, in December 2022, another draft bill was issued with the same goal of transposing the Directive (the “Preliminary Draft”). This earlier draft has been replaced by the current Draft Bill. While there are some differences between the Preliminary Draft and the Draft Bill, the latter largely retains the same framework and language, with certain exceptions which will be commented below.

Currently, the CCP regulates two types of consumer collective interests defended through class actions: (i) collective interest actions, where all the members of the harmed group are previously identified, can be identified, or can be easily identified; and (ii) diffuse interest actions, where the members of the harmed group are unknown or hard to identify. A class action being classified as collective or diffuse will affect the rules on legal standing (and on notice and res iudicata effects as well).

Public prosecutors and entities authorized under European Union (“EU”) law are granted general legal standing to file any type of class actions, regardless of the type of interest protected. Regarding collective interest actions, legal standing is granted to (i) ad hoc groups of affected consumers (known as “platforms” in Spain), who must demonstrate that they represent the majority of the consumers affected by the alleged harmful event; (ii) the National Consumer Institute and the autonomous community and local government bodies or entities deemed competent to protect consumers and users; and (iii) consumer and user associations, as well as legally incorporated entities that defend and protect consumers and users. Regarding diffuse interest actions, legal standing is exclusively granted to representatives (“legally constituted associations of consumers and users”). Under the CPA, associations are considered representatives if they are accepted into the Consumers and Users Council (currently, eight associations have been accepted). The most active associations include the Association of Users of Banks, Savings Banks and Insurance (ADICAE), Consumers in Action (FACUA), and the Organization of Users and Consumers (OCU).

The Draft Bill does not differentiate class actions based on the type of interest being protected (i.e., collective or diffuse). Currently, it confers standing to the (i) Public Prosecutor’s Office and (ii) qualified entities (national and those designated in other Member States, which may bring crossborder actions). Qualified entities are user and consumer associations that must meet certain requirements. These requirements include demonstrating effective and public performance for a minimum period of twelve months before the application date for designation, having statutes that aim to protect and defend the rights and interests of consumers and users, being a non-profit organization, not being involved in insolvency proceedings nor being declared insolvent, being independent and not influenced by parties other than consumers and users, and publicly disclosing clear and understandable information through any appropriate means, particularly on its website. The administrative bodies competent in the field of consumer affairs and designated entities in other Member States are also considered qualified entities. Unlike the current regime, the Draft Bill excludes consumers groups.

There is currently no specific jurisdiction for class actions. Depending on the nature of the claim, they can be resolved by either (i) first instance civil courts, which deal with general contractual law, general contractual conditions, and general protection of consumers and users; or (ii) commercial courts, which deal with commercial matters such as competition law.

Regardless of the nature of the underlying claim, the Draft Bill grants exclusive jurisdiction to the first instance civil courts where the defendant is domiciled or, in the absence of a domicile, where the defendant is established. If the defendant is neither domiciled nor established in Spain, the competent court will be the first instance civil court where the defendant’s conduct was carried out or where it had—or could have—produced its effects, at the claimant’s choice.

Moreover, the Draft Bill provides that the General Council of the Judiciary will agree, in the terms established by the Organic Law of the Judiciary, that one or more courts of first instance in the same province, whether in the same judicial district and following the delimitation of the territorial jurisdiction in the latter case, will assume exclusive jurisdiction over proceedings in which collective actions are exercised for the protection and defense of the rights and interests of consumers and users.

Attributing exclusive jurisdiction to first instance courts and excluding commercial courts has been controversial, and different voices have advocated against it.

Current Spanish law provides three types of actions that may be brought as class actions (each seeking different forms of relief):

• Cease and desist actions, which seek to annul the general terms and conditions of contracts and prohibit their future use. These actions—which are the most common—are usually joined with claims to be compensated for damages caused by the use of these terms and conditions;
• Retraction actions, which request that the defendant retract any recommendation made on the use of unlawful terms and conditions and refrain from making any future recommendations; and
• Declaratory actions, which seek a declaration that a certain contractual term is a general condition and, when necessary, that it be registered in the Spanish Register of General Contractual Conditions.

Conversely, the Draft Bill, in line with the Directive, outlines two types of class actions:

• Injunctive actions, which seek an order for the defendant to cease its conduct and be prohibited from repeating it in the future; and
• Redress actions, which seek specific remedies for damages to consumers’ collective rights and interests, such as compensation, reparations, replacements, reimbursements, termination of contracts, or reduction of the price of the goods or services concerned.

Both actions may be exercised in the same proceedings and under the same claim. However, if the first instance civil court considers them to be particularly complex, or that they may delay or harm the proper administration of justice, it may separate them. In that case, the court may suspend the redress action until the injunctive action has been resolved.

• The Draft Bill also expressly recognizes the category of crossborder actions (i.e., those brought by a qualified entity in a Member State other than that in which it was designated).

Both the current regime and the Draft Bill limit the types of collective claims that may be brought to those described above, without any limitations on the nature or amount of the claim as long as they are brought on behalf of consumers and users.

Up to now, the lack of a unified and comprehensive regime in Spain applicable to class actions has hindered the country from becoming a significant hub for class action litigation. However, the number of class actions has grown over the past few years, albeit focused on particular industries (mainly the banking and, currently, also in the automotive sector). The unitary system introduced by the Draft Bill is expected to provide an appropriate legal framework for the development and growth of class actions in Spain, and the emergence of new pieces of legislation, such as Regulation (EU) 2022/1925 of the European Parliament and of the Council of September 14, 2022, on contestable and fair markets in the digital sector (the “Digital Markets Act”), may increase the number of class actions in the years to come.

To date, class actions have been primarily focused on banking litigation related to the protection of consumers and users, such as preference shares and derivatives. Recently, there has been an increase in threatened class actions in the automotive, digital, communications and healthcare sectors as well.

Other cases concern private enforcement, such as Ausbanc v. Telefónica (due to an anticompetitive margin-squeeze conduct) or the Spanish Consumer and Users Organization v. different manufacturers of passenger cars; unfair commercial practices, such as the Spanish Consumer and Users Organization v. VW-Audi Spain Group; and defective product liability and power outages, such as Endesa v. OCU.

Going forward, two relevant business risks or focal points of class action litigation may be the breach of rules protecting the rights of consumers and users and the breach of competition law (giving rise to private enforcement), especially in the digital sector but not only.

Due to its current class action legislation, Spain cannot be considered an “opt-in” or “opt-out” jurisdiction. However, there is a procedure for publicizing the proceedings and for calling possible affected consumers to participate in the proceedings and defend their individual rights or interests.

For the time being, notice requirements depend on the type of action (i.e., collective or diffuse). Before filing collective interest actions, claimants must inform each potentially affected consumer about their intention to bring the action. For diffuse interest actions, potentially affected consumers are notified by the court clerk, e.g., through publications in widely distributed newspapers. After being notified (either by the claimant or the court clerk), consumers have the option to join the proceedings or to defend their interests individually through separate proceedings. Consumers can only join the proceedings for diffuse interest actions when summoned by the court clerk and not at a later stage. However, even if they do not join, they will be able to enforce their rights if the class action is successful. Concerning cease and desist actions, the CCP does not require notice to consumers.

Instead, as a rule, the Draft Bill now provides an opt-out mechanism. However, the court may order that the action be processed under an opt-in system where the value of the redress to each consumer exceeds €3,000 (the Draft Bill reduced this amount, which in the Preliminary Draft was set at €5,000), and the court considers it more advisable to ensure the good administration of justice. Affected consumers will join or exclude themselves, as the case may be, through an electronic platform within a period determined by the court (which may not be less than two or more than six months). Filing an individual action (or a complaint before an administrative authority) within that period with the same subject matter as the class action will be construed as the expression of the will not to be bound.

If, as provided in the Draft Bill, the opt-out system is generally applied, individual litigation is expected to be significantly reduced because no new individual actions may be brought after the certification order is issued and the period to opt out of the class action has expired. In addition, ongoing individual proceedings in which the consumer joins the class action will be discontinued.

The CPC does not provide for any specific requirements to initiate a class action claim. As with any other civil proceedings, it can be initiated by filing a claim before the competent court. As advanced, in collective interest actions, the claimant must inform the potentially affected consumers of its intention to bring a class action. To this end, the claimant may request pre-action discovery from the defendants. However, the Spanish Constitutional Court has established that such requests should only be admitted if they are essential for the class action.

The Draft Bill establishes that, regarding injunctive measures, claims will only be admitted if the claimant requested the defendant to cease the conduct at least one month before filing the claim.

Regarding redress measures, the Draft Bill introduces a new procedure with strict timelines for each stage. To be admitted, the claim must include (i) information about the conduct in question; (ii) the consumers affected (when individual identification is not possible, the characteristics and requirements that must be met to be considered beneficiaries of the favorable judgment that may be issued must be specified as accurately as possible); (iii) the causal link between the conduct and the harm; (iv) the homogeneity between the claims of consumers and users; (v) the specific redress requested; and (vi) a summary of the financial sources (if any, financing by a third party must be identified).

Importantly, the Draft Bill requires the class to be certified for redress measures claims to go forward.

The specific remedies include both injunctive and redress relief and will depend on the type of action brought by the claimant. In cease and desist actions, the remedy includes a declaration annulling the general terms and conditions of a contract and prohibiting their future use. This is usually joined with claims for compensation for damages caused by applying those terms and conditions. In retraction actions, the remedy involves the defendant retracting any recommendation made concerning the use of unlawful terms and conditions and prohibiting their future use. In declaratory actions, the remedy consists of a declaration that a certain contractual term is a general condition and, when necessary, that it should be registered in the Spanish Register of General Contractual Conditions.

Under the Draft Bill, the remedy sought in case of injunctive measures is the order for the defendant to cease the conduct and to prohibit its repetition in the future. The action may also be brought to prohibit a conduct, even if the conduct has ceased at the time the action is brought or before the proceedings are terminated, if there is sufficient evidence to fear its commission or repetition. Claimants may also request that (i) a conduct be declared contrary to the rules of protection of the rights of consumers and users or that (ii) all or part of the judgment be published in the media or that a declaration of rectification be made (at the expense of the defendant).

Regarding redress measures, the Draft Bill provides that consumers will receive specific remedies for damages caused by traders or professionals to their collective rights and interests in the form of compensation, the repair or replacement of goods, or a reimbursement of the price among others. Claimants may also demand the termination of contracts under which the infringing conduct occurred, or a reduction of the price of goods or services affected by the infringing conduct.

No. Under Spanish law, which is based on the compensatory principle, punitive damages (overcompensation) are not allowed. In fact, the Directive states that the award of punitive damages should be avoided. Claims for restitution of damages (compensatory in nature) may include direct damages, lost profits and interest.

No. Under Spanish law (regulated by Act 5/1995, of May 22, of the Jury Court) juries are exclusively competent to prosecute specifically attributed criminal offenses.

Neither the current Spanish law nor the Draft Bill provides for a specific method for quantifying damages. Therefore, the parties involved in a legal dispute typically produce expert reports containing assessment of the damages caused. During the trial, the court will evaluate the report and the experts’ arguments before coming to a decision.

Given the existence of legal loopholes and the incoherent nature of the rules on class actions under current Spanish law, most class actions are suspended or dismissed on different procedural grounds. Regarding jurisdiction, defendants may challenge the court’s international, objective and territorial jurisdiction (declinatoria). It should be noted that the court may also appreciate ex officio the lack of international or objective jurisdiction.

There are no nationality or domicile limitations for claimants under current Spanish law. However, to date, no crossborder collective actions have been brought before Spanish courts.

In accordance with the Directive, the Draft Bill has introduced crossborder representative actions, which allow qualified entities established in one Member State to bring crossborder representative actions in another Member State.

As indicated in question 1, the current Spanish regime of class actions is regulated by various provisions of the CCP, instead of a specific class action procedure, as well as by sectorial substantive rules. The Draft Bill transposing the Directive substantially changes this by creating a unified and coherent system of collective protection in Book IV CPC (articles 828 to 885). This will replace the current procedural and substantive rules, with the aim of creating an adequate, coherent and specific regulatory framework for the protection of consumers and users.

The current wording of the CPC does not provide any provisions on class action settlements. This gives rise to uncertainty surrounding the mechanism for collective settlements. Neither caselaw nor scholarly publications have addressed this issue, nor does the CPC provide a procedural mechanism for claimants and defendants to seek certification of a settlement agreement before litigation starts. Therefore, class action settlements are rare (although the general rules on the settlement of civil claims still apply), and there is no public information available on the percentage of class actions settled.

The Directive mandates Member States to establish a framework to encourage agreements on redress measures within the scope of representative actions. To this end, the Draft Bill expressly provides the possibility of reaching settlement agreements and establishes specific rules based on whether the agreements are reached after certification of the action or even before that procedural stage.

Due to the current lack of specific regulations, the general rule for settling individual claims applies. Therefore, the settlement agreement should be filed with the court to receive approval. Generally, the court will certify the settlement agreement, unless it is contrary to the law or affects the general interest or rights of third parties.

According to the Draft Bill, to be valid, settlement agreements require judicial approval. Before granting approval, the court will review that the agreement is not detrimental to consumers’ interests, contrary to mandatory rules or subject to conditions that cannot be complied with. To determine whether the agreement harms the interests of consumers, the court will consider the amount of the indemnities, the degree of difficulty for consumers to access them and, where appropriate, the sums to be paid to the third-party funder and to the claimant’s counsel.

Once Directive 2014/104/EU of the European Parliament and of the Council of November 26, 2014, on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Damages Directive”) was transposed into Spanish law, the Spanish Law for the Defence of Competition established that the findings of a competition law infringement in a final decision of a national competition authority or a Spanish court is binding in civil proceedings, while final decisions of competition authorities and courts of other EU Member States create a rebuttable presumption. This having been said, standalone actions (i.e. those which do not rely on a previous administrative finding) are also possible both in relation to competition matters and generally. When ruling on damages claims arising from competition infringements, administrative decisions have generally been given significant consideration by Spanish courts, even before the Damages Directive was transposed into Spanish law.

Under the Draft Bill, the exercise of a redress action does not require a prior declaration in a final judgment or administrative decision that the conduct of the defendant trader or professional is contrary to the collective interests of consumers.

There are no precedents in Spain regarding ESG matters. However, their importance in recent Spanish legislation is well-known.

The European Parliament passed two directives in this area at the beginning of 2024: (i) the Directive on substantiation and communication of explicit environmental claims (the “Green Claims Directive”); and (ii) the Directive on corporate sustainability due diligence. The new directives, which have not entered into force yet will create transparency and due diligence obligations for companies, which could lead to class actions. It is important to note, however, that, for the moment, the Draft Bill limits its scope of application to consumers and users only, which could make it difficult for class actions related to ESG issues where the claimants are not consumers or users.

Currently, third-party funding is not regulated under Spanish law and there is no caselaw on the matter, albeit it is generally permitted.

In line with the Directive, the Draft Bill expressly allows for third-party funding within the framework of class actions.

The qualified entities must disclose a financial overview of the sources of funding and identify third-party funders. The court may also request the financing contract to assess its potential consequences on the affected consumers. The Draft Bill also establishes that the financing contract will be submitted and reviewed at a hearing, subject to confidentiality restrictions if the court deems it necessary. If the court considers that any of the circumstances precluding third-party funding of the proceedings are met, it will ask the claimant to modify or waive this funding. If it fails to do so, the court will discontinue the proceedings.

Under the Draft Bill, funding is not permitted where there is a conflict of interest, i.e., where the defendant is a competitor of the funder, where the funder depends on the defendant trader, or where the decisions of the claimant entity are influenced by the funder in a way detrimental to the interests of consumers. External funding is also not permitted where it is driven by an economic interest in bringing or the outcome of the action, diverting it from the protection of the collective interests of consumers.

Under Spanish law, contingency fees are permitted, but they are not regulated. The General Statute of the Spanish Bar Association states that fees must be freely agreed between the client and the lawyer, always adhering to the deontological and unfair competition rules. Contingency fees arrangements are not prohibited under the Draft Bill, without prejudice to the rules on conflict of interest.

Under Spanish law, the rule is that, unless the court considers that the case posed serious de facto or de jure doubts, the party whose pleas were rejected must bear the legal costs. However, under Act 1/1996 of January 10, on free legal assistance, consumer and user associations are entitled to free legal assistance. Therefore, even if their pleas are rejected, they will not bear legal costs. The Directive states that the Member States will ensure that the unsuccessful party bears the legal costs, in accordance with applicable national law. The Draft Bill provides that the general rule of Spanish law (Article 394 CCP), according to which costs are to be borne by the unsuccessful party in the proceedings, shall apply in redress measures actions.

Yes. The Draft Bill implementing the Directive is currently being processed under the urgency procedure. However, to be enacted, it must be approved by the lower house (where the initial deadline to present amendments has been extended several times). Once it is approved, it will be sent to the upper house (the Senate) for further processing. If the Senate does not introduce any changes to the Draft Bill or veto it, it will be published in the Official Gazette of the Spanish State. If the Senate includes any changes, the Draft Bill will be sent back to the lower house, which can ratify it or not (or, if necessary, lift the Senate’s veto). After that, it will be published in the Official Gazette.

It should be noted that the Draft Bill will not apply retroactively to class proceedings initiated before its entry into force.