On 14 September 2023, the Saeima approved amendments to the Consumer Rights Protection Law (CRPL) and related amendments to the Civil Procedure Law. These amendments will introduce a new procedural instrument to consumer class actions in Latvia, as provided for in the European Union (EU) Directive 2020/1828. The main objective of the law is to increase consumer protection, by providing an opportunity to join a special class action against unfair traders or producers.

More effective consumer protection, even in cases of smaller claims

Until now, in case of unfair commercial practices, for protection of their consumer rights people affected had the option to turn to the Consumer Rights Protection Centre (CRPC), whose competence is to identify and demand the cessation of company violations, take corrective actions, impose penalties and provide legal assistance to consumers. However, in order to receive compensation for damages, consumers had to bring an individual action, which is generally an unprofitable activity, especially in cases of small claims.

The amendments introduce an additional opportunity for consumers to protect their rights and interests, not only by addressing the CRPC to prevent violations, but also by joining consumer class actions. This kind of action is filed in court by a qualified institution for the benefit of at least five consumers seeking compensation for damage caused, or in order to establish and cause the cessation of a violation of consumer rights together with compensation for the damage caused to consumers by the manufacturer, seller or service provider. This reimbursement may include compensation, repair, product exchange, price reduction, termination of the contract or a refund of the amount paid. It will also be possible to bring cross-border consumer class actions in the courts of another EU country. However, before going to court, the qualified institution addresses the entrepreneur accused with a claim and issues a warning that the company will be taken to court if it does not fulfil the requirements based on a settlement. Information on the actions already brought and the actions that the qualified institution has decided to bring before the courts will be publicly available on the qualified institution’s website.

What are the qualified institutions entitled to bring an action on behalf of consumers?

They are associations established under Section 22 of the CRPL by consumers for the purpose of protecting consumer rights, and which operate in accordance with laws and regulations, as well as the statutes of the relevant consumer protection association. In order to obtain qualified institution status, the association will have to submit an application to the CRPC, requesting qualified institution status, whether on a permanent basis or for a specific consumer class action, demonstrating compliance with all the criteria set out in the CRPL, including 12 months of ongoing  activity in the field of consumer protection, solvency, independence from producers, sellers or service providers and others. Once every five years, their compliance with criteria will be re-evaluated. The CRPC website will provide information on qualified institutions in Latvia.

What can consumers do if they have been harmed?

Information about calls for consumers to apply for participation in consumer collective action will be published on the CRPC website and social networks. In order to apply, the consumer must include the following information in the application:

  • name, personal identity number, residential address, contact information and current account number
  • grounds for the consumer’s right to compensation and claim
  • confirmation that the consumer has not turned to another qualified institution regarding the dispute about the issue mentioned in the application
  • consent for the qualified institution to represent the consumer, including the conclusion of a settlement
  • documents supporting the claim, including a copy of the transaction and proof of payment (cheque or other proof of payment) and other evidence supporting the consumer’s entitlement to damages in the specific consumer class action

The qualified institution evaluates the consumer applications received and, in case of approval, informs the consumer about the registration fee procedure.

Consumers do not have to cover the legal costs of a class action, unless the additional costs are due to an intentional act or negligence on the part of the consumer. For an action within the framework of a consumer collective action, the expenses of the qualified institutions of Latvia may be covered from the state budget funds allocated for this purpose in the current year of CRPC or third-party funding. For such cases, procedures have been developed to prevent the influence of third parties and conflicts of interest between the association and its financiers. In the case of satisfaction or settlement of the claim, the manufacturer, seller or service provider is obliged to reimburse the qualified institution for expenses, if requested.

It is believed that by facilitating the process of seeking compensation, consumer collective actions will increase the chances of ending unfair commercial practices and promote justice and corporate accountability. These amendments are an important step towards improving the protection of consumer rights in Latvia, in this way promoting fair and equal competition.