On 24 July 2024, the Sejm passed a law reforming the consumer redress system. The Act introduces a new type of action – representative actions and implements the European Parliament and Council Directive (EU) 2020/1828. The Act is currently awaiting the President’s signature. The Act introduces a new mode of redress for consumer protection law, including compensation (a new type of so-called private enforcement).
The enactment of the Act significantly increases the risk of:
1) the number of litigations between traders and consumers and
2) the expansion of the catalogue of litigation.
Scope of application
The Act is intended to facilitate the enforcement of regulations protecting the interests of consumers, broadly defined, concerning, inter alia:
- food law;
- passenger rights in rail, sea, air and coach transport;
- distance marketing of financial services to consumers;
- unfair market practices;
- misleading and comparative advertising;
- payment services;
- insurance distribution;
- medical devices (a full list of regulations is included in Annex I to the Directive).
The new procedure may give rise to risks and apply to entrepreneurs involved in, among others:
- property development;
- FMCG;
- transport and courier services;
- e-commerce;
- food production;
- automotive (dealers and manufacturers);
- chemical (household chemicals).
New consumer protection mechanism
The new legislation introduces two types of representative actions brought before a national court (civil court):
1. brought by a qualified entity against a trader to declare the trader’s use of practices that infringe the general interests of consumers and to order its cessation (without the requirement to represent specific consumers);
and
2. an action brought by a qualified entity on behalf of a group of consumers for the adjudication of claims relating to the application by traders of practices that infringe the general interests of consumers (e.g. for compensation, reimbursement of fees charged on the basis of abusive clauses, etc.).
The new provisions are intended to increase the popularity of class actions by fully exempting the qualified entity from court fees and by introducing lump-sum fees (maximum PLN 2,000 for pecuniary claims; PLN 1,000 for non-pecuniary claims) that qualified entities will be able to charge consumers for handling the case.
The effectiveness of the proceedings and the judgments issued are to be ensured by requests for disclosure of evidence by entrepreneurs and by severe penalties for non-compliance with judgments (up to PLN 5,000,000).
The President of UOKiK retains the right to intervene in cases initiated by qualified entities. Thus, the Act implements the concept of private enforcement of consumer claims. In addition, while the position of the President of UOKiK will not be binding on the court, it will be able to support qualified entities.
Qualified entities
This status will be available to consumer organizations designated by the President of UOKiK as well as to qualified entities in other EU countries listed by the European Commission.
The concept of practices infringing the general interests of consumers
The broad definition can in practice be used to penalise any actions of traders falling within the scope of any of the dozens of regulations or directives listed in Annex I to Directive 2020/1828.
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