I INTRODUCTION TO CLASS ACTIONS FRAMEWORK
The Political Constitution of Colombia of 1991, in Article 88, conceived actions aimed at protecting collective interests and rights as well as damages that are common to a group of people. These actions were developed by Law 472 of 1998, which divided them into 'popular actions' and class actions. In Colombia, popular actions seek to protect collective rights, and class actions seek to protect the individual interests of 20 or more people harmed by the same act.
Since the enactment of this law, 20 years have elapsed in which the issues arising from these actions have been evidenced. This is so because even if the legislator had previously enshrined similar actions in the Civil Code of 1887 – articles 1005 and 2359 – class actions per se were only legally established with the enactment of Law 472. Thus, the initial years were characterised by high expectations generated by the law's enactment, followed by a boom period and then the abuse of these actions, particularly the highly publicised popular actions. There were too many people pursuing the economic incentives that the law incorporated in favour of those who were triumphant. This experience means some laws have led to a more settled case law, albeit one still in evolution.
In Law 472 of 1998, the Colombian legal system provides the protection of collective rights and interests and the compensation rights to a group of people whose individual rights have been violated, through two mechanisms that pursue apparently similar objectives, but that are diametrically opposed in their characterisation.
Accordingly, popular actions are the mechanism by means of which the threat to collective interests is suppressed or prevented, or the damage already caused and compensated; while class actions seek compensation for the damage suffered by a plural number of people. In this sense, it is worth noting that, when talking about individual damage, reference is made to an effect on the patrimonial and extra-patrimonial assets of each of the individuals; this is so to the extent that class actions, inspired by the Anglo-Saxon model, pursue compensation of individual damage that affects a 'large' group of people.
When reference is made to collective damage, what is put forward is the present or future impact on an entire community. Collective damage, then, intangibly affects the quality of life of a whole conglomerate, and the action that seeks to prevent or repair must be exercised on behalf of the community through a popular action.
It is not necessary, therefore to affirm that class actions pursue the protection of collective rights and interests, as it is apparent that they tend to protect individual rights. A different thing is that class actions are only aimed at seeking the compensation of individual damage of a group of victims, so that from the harmful event there is no damage to a right or a collective interest.
II THE YEAR IN REVIEW
As has been already noted, during the first few years after the issuance of the Law on popular actions this mechanism was used abusively; therefore, this situation led the legislator to suppress the economic incentive that had been conceived for actors that were triumphant in their claims. Through the issuance of Law 1425 of 2010, the lucrative business that represented for some the filing of series of popular actions was eliminated leading to the achievement of apparently more laudable ends and thus controlling the exercise of the action.2 However, this situation was not easily accepted, and there were those who filed actions against the issuance of the Law since they considered that it presented an involution in the law, so a constitutionality claim was filed before the Constitutional Court. In this claim, the Court confirmed the Law's adjustment of the Colombian legal system.3
Even more important have been the legislative changes in matters of jurisdiction, particularly in the case of those that, being directed against a state entity, are processed by the contentious-administrative courts. In consequence, when Law 472 of 1998 came into effect, these actions were processed in the first instance before the administrative courts of each judicial district and in the second instance, before the Council of State, the supreme court of administrative litigation. This ensured that, during the first years of the Law's validity, jurisprudential lines were created around the interpretation, application and scope of collective rights, a subject that until then had little development in Colombia. However, in 2006,4 the administrative courts began operating, so that claims concerning popular actions in the first instance – and, in some cases, also class actions – were filed before them, and second-instance knowledge was transferred to the administrative courts of each district, making jurisprudence more diffuse.
Considering the above, Law 1285 of 20095 established the mechanism for a review of judgments and some injunctions, handed down by the courts pertaining to the contentious-administrative jurisdiction to the Council of State, both in popular and class actions. This review seeks the unification of court rulings, as well as ensuring the effective protection of fundamental rights and the review of legality regarding the judgments of the administrative jurisdiction. However, this mechanism is not always effective because many of these procedures take years to decide, given the amount of matters to be resolved by the Council of State. In addition, the review is possible, not automatic, much less mandatory, and, finally, it only proceeds when it is proven that the judgment is contrary to what is normally decided by the courts in similar cases or when it is contrary to the established jurisprudence of the Council of State, which has led to few judgments being subject to review.6
Moreover, not all rulings in popular and class actions are subject to review. Rulings that are appealable before the Council of State once the process is filed in the administrative courts, or those given by the administrative judges are not subject for review. Similarly, the judges of the Council of State do not review matters that generate new debates based on evidence or legality.
Nor are rulings susceptible to review delivered in popular or class actions that are processed by the civil jurisdiction. This is the reason why in this domain jurisprudence is diffuse.
We clarify that although the extraordinary appeal before the Supreme Court of Justice, which aims to unify court rulings in civil matters, is clearly applicable for class actions, according to the judgment by the State Council of 20 September 2018, this is still in debate for popular actions.
Indeed, Article 338 of the General Procedural Code, apparently by mistake, established that in popular actions the amount awarded with a conviction should not be considered in order to allow the appeal. Subsequently, Article 6 of Decree 1736 of 2012 corrected the aforementioned article, indicating that it referred exclusively to group actions, with which extraordinary appeal before the Supreme Court of Justice in popular actions had been ruled out. However, the ruling of 20 September 2018, issued by the State Council, declared Article 6 of Decree 1736 of 2012 void, so that Article 338 reverted to its initial regulation. Thus, there is currently no certainty about whether extraordinary appeal is possible in terms of popular actions, but, based on future decisions of the Supreme Court of Justice, this should be decided.
It is significant that over the past 20 years, the most relevant and frequently discussed issues in collective actions have been, among others, those related to the protection of the environment, the ruling on the pollution of the Bogotá River, judgment 01-479 of 25 August 2004, access for the disabled and the services provided for them in public places, the access to and provision of home public services and, finally, administrative morality in state contracting.
Having already presented the general panorama of collective actions in Colombia, this section deals with the procedures provided by the law for their processing, and exposes some of the practical problems that have been evidenced during the 20 years of the application of Law 472 of 1998.
It must be clarified that collective actions are those aimed at guaranteeing either the defence and protection of collective rights and interests, in which case there would be a popular action, or in the face of a claim seeking compensation for massive or group damages, in which there would be a class action.
i Types of action available
The Colombian legal system provides two types of collective actions, according to the object of protection pursued by each of them. Thus, if what is intended is the safeguarding and protection of collective interests and rights,7 recourse should be made to a popular action; whereas if the aim is the defence of the rights and interests of a number of people (i.e., a group), the procedural method will be the class action. In this way, the determining factor will be the damage caused.
The damage that intangibly affects the quality of life of an entire community is a collective damage, and the preventive or restorative action must be exercised on behalf of the entire affected community through a popular action. In contrast, group damage affects a number of victims who suffer individual personal damage that, when it touches a significant number of individuals, sets up the group or massive damage, whose compensation can be claimed in the same judicial process, through a class action. In the case of mass or group damage, each of the affected victims can seek compensation for their damage through an individual claim; however, owing to the scale of the damage the law provides for class action as a theoretically more flexible procedural mechanism for the protection of the affected group's interests. The word 'theoretically' is used as, in practice, claimants do not always obtain the aforementioned benefit provided for class actions.
Although the object of protection of the actions in question is different, nothing prevents the same event leading to both types of action being initiated, for example, when some fishermen fall ill or are deprived of their daily activity because of the contamination of a river. It was already mentioned that a common theme in popular actions is environmental damage, in which through this action, protection of the healthy environment would be requested, while individual damage caused to the health and patrimony of the fishermen would be the object of a class action.
On the other hand, in previous publications8 we have argued that, despite the fact that Law 472 of 1998, in Article 46, establishes as the exclusive purpose of class actions the recognition of damages, it would be absurd that in the process of a class action for massive damage already caused, the judge could find a latent threat of new individual damage or the aggravation of the same damage in the future and could not order the suppression of such threat under the argument that the law created the class action exclusively for indemnification purposes. A correct interpretation of this Article would consider that class actions are meant not only to collect compensation for individual damage already caused to the class, but also to suppress the threat of contingent damage to the property of individuals. Our interpretation has been accepted by national jurisprudence on several occasions.9
In addition to the damage, other elements of procedural processing allow the differentiation of popular actions from class actions, such as: the time frame to initiate the action, the individuals legitimated to exercise the action, the passive subject of the action, the precautionary measures, the possible agreements of the parties and their execution, the sentence and its execution.
This section outlines the elements of these actions, as well as briefly studies the expiration periods to exercise the actions. In later sections, those legitimised to initiate and resist the actions, the possible agreements between the parties and the judgment and its execution are discussed.
Elements of the actions
In addition to the damage to the collective interest, for a popular action to be admissible the defendant must be potentially liable for the damage. This means that the principles of civil liability are applicable to popular actions, because they imply the verification of a contingent or already caused collective harm, a fact attributable to the defendant and a causal link between one and the other.
As in popular actions, class actions require the defendant to be responsible. This implies the verification of civil liability, because if this is not so, the compensation is not deemed appropriate. In this way, a popular action process will be one of non-contractual civil liability or contractual civil liability, according to the elements of one or other liability regime.
The expiration periods of both actions
In terms of popular actions, the current procedural rule establishes that a 'Popular Action may be promoted during the time that the threat or danger to the collective right and interest persists'.10 This implies that the action is not extinguished by the passage of time, when what is involved is a request that a latent or continuous threat of damage to collective or individual interests be eliminated. If damage is already caused whose repair or compensation fails to prevent the production of new damage, the action will be subject to the terms of prescription of ordinary actions in the legal system.
In relation to class actions, Law 472 of 1998, in Article 47, states that 'without prejudice of the individual action corresponding to the compensation of damages, the class action shall be promoted within two years of the date in which the damage was caused or the injurious action that caused it ceased'. This Article states that if two years have passed since the damage was caused or since the harmful action ceased and no class action has been commenced, the individual action of each member of the group can still be filed and will be valid in accordance with the terms of expiration and prescription conceived in the jurisdiction.
In addition, in accordance with subparagraph h) of numeral 2, Article 164, Law 1437 of 2011, in administrative matters the previous expiration rule has an important exception: 'If the damage caused to the group comes from an administrative act and is intended to void it, such a request must be submitted within four months, counted from the day following the communication, notification, or publication of the administrative act.'
ii Commencing proceedings
In relation to legal standing in popular actions, Law 472, Article 12 provides that every citizen, whether a natural or legal person, can file actions. These actions can be exercised by a single person, who must be the holder of an individual right under threat and who wishes to protect it by means of a popular action. It can also be any member of the community whose collective interests are threatened, when it comes to the affecting or threatening of collective rights.
It should also be noted that there can only be one popular action in progress against the same plaintiff and for which the same claim is requested, under penalty of pending litigation.
In relation to class actions, Law 472, Article 48 establishes that any aggrieved party may initiate the action, but it also requires the plaintiff to identify a group of at least 20 affected people who meet the same conditions in the case. In this regard, it is important to specify that it is enough for a single member of the group to give power of attorney to initiate the action on behalf of the group, indicating in the lawsuit the criteria that allow the identification and delimitation of the affected class. This person must file the claims in the name of the whole group, not just for those victims who granted power of attorney.11
Once the action is filed by at least one member of the group, the effects of the process extend to all the members covered by the class, except, exclusively, to those affected who have decided to exclude themselves from the group expressly, to whom are left open the possibility to sue separately and individually.12 The above places the class action in Colombia as a type of opt-out action.
Defining the class
Limiting the class is where the greatest disadvantages of class actions lie because once the identification is presented by the plaintiff in the lawsuit, there is no specific law that establishes the specific procedure to follow regarding the moment when the class must be completely identified. It is also important to consider that in judicial practice, judges often ignore the criteria to identify the class and end up ruling on the case without there being a clear delimitation. Such situation leads in many cases to the emergence of doubts about the effects of the process and the ruling against the possible new members of the class that did not grant power of attorney.
In our opinion, the identification of the class should be established by the judge before admitting the claim, based on the requisite contained in Article 53 of Law 472 of 1998.
The importance of the delimitation of the class is also that, if not done this way, the distribution of compensation before the judgment would be unmanageable and would make the compensation open to discussion by people who did not become part of the process and whose membership in the class action could be debatable. The non-determination of the class in case of an acquittal could also generate avoidance of the effects of res judicata. Finally, an inadequate delimitation of the class could impede the settlements, as there would be no clarity as to who would have to be called to the settlement and there would not be sufficient guarantees for the defendant to ensure the closing of the event in a definitive manner.
iii Procedural rules
Effects of class exclusion
The exclusion of one of the members of the class the group occurs after he or she states a desire to be excluded, and this must take place within a time limit of five days.
Effects of the judgment
The judgment that ends the process of class actions has effects of res judicata against all those involved, and it benefits those who claim within 20 days of the publication of the judgment, except those who were expressly excluded from the class at the beginning of the action and so are not affected by the decision.
Likewise, the acquittal has the effects of double jeopardy for all the members of the class, except for those who were expressly excluded in a timely manner. We consider this situation absurd and unjust for the victims, because those who did not expressly exclude themselves from the class and did not become part of the class action process see the violation of their right of defence, as they are linked by an unfavourable ruling in a lawsuit in which they did not even participate.
However, we emphasise that Article 56 of Law 472 of 1998 provides an important instrument for the benefit of the victims belonging to the class that may be unfairly affected by the ruling. Paragraph b) of this Article establishes that the members of the group will not be bound to the sentence when, having not participated in the process, they 'prove in the same term (five days after the judgment) that their interests were not represented in appropriate form by the group representative or that there were serious errors in the notification of the action'.
The presiding judge
Both popular and class actions apply the jurisdiction rules to determine which judge is competent. The Colombian legal system contemplates a civil jurisdiction and a contentious-administrative jurisdiction. If we simplify the analysis, it could be said that the jurisdiction will depend on whether the litigation is about a matter that involves a public function or a state entity. Therefore, the collective actions will be processed before civil judges or before administrative judges, depending on the jurisdiction called to review the matter in dispute and the parties involved.
The rules that govern the processing of collective actions are those enshrined in Law 472 of 1998. In cases of normative gap, the same rule (Article 68) provides for referral to the Code of Civil Procedure, which was called to govern conflicts in the sphere of private law and that has now been replaced.
This normative compilation was replaced by the General Procedural Code, which today corresponds to the applicable legislation but, given its novelty, there are still claims being processed under the previous legislation. To this we should add that part of the jurisprudence and the doctrine have understood that popular and class actions known by the contentious-administrative jurisdiction must apply as residual rules of the Contentious-Administrative Code (Law 1437 of 2011). The plurality of the mentioned laws can create confusion regarding the procedural norm applicable to a popular or class action; this may end up affecting the right of defence of the parties in the proceedings or it may create uncertainties in the procedure and bring about legal uncertainty.
iv Damages and costs
For both popular and class actions, the legal system admits that the parties agree with their lawyers the fees they will charge for the representation of their interests in the process. It must be specified that in Colombia, the pact of contingency fees is admitted, as well as other mechanisms of remuneration for services whose agreement and content are lawful. There is, therefore, no special regulation or prohibition for the remuneration of the trial lawyer.
Anyone can file a popular action without the need for the presence of a qualified lawyer; so the interested party can directly access the courts intending the protection of the interests of the community.
The Colombian legal system does not contemplate the existence of a jury, so the presiding judge decides the processes of any nature.
The recognition of monetary compensation in favour of the plaintiff is, as a rule, predicated about class actions. In these actions, the damage that can be compensated corresponds to the damage that the plaintiff tries to prove in the process, both in relation to the damage of the group and in respect of the individual damage of each member of the class that becomes part of the process. Traditionally, the recognition of the damage has been governed by the limits to compensation for non-pecuniary damage recognised in case law and applicable to liability proceedings. As far as damage to property is concerned, within the process compensation for the damage that can be proven will be recognised, if every element of tort law has been proven.
The compensation imposed in the ruling of a class action
The judgment that ends the class action must provide for the amount of collective compensation and the weighted sum of the individual compensation of the members of the class. The sum corresponding to the compensation must be delivered to the Fund for the Defence of Rights and Collective Interests, which will handle the distribution of the resources to the claimants who present themselves and prove their class member status. This fund is administered by the Ombudsman to guarantee the interests of the members of the class and to give a suitable adequate management of the resources.
Law 472 foresees the scenarios in which the parties in collective actions can reach an agreement to put an end to the process, before it begins.
In the case of popular action, Article 27 of the Law orders the holding of a compliance hearing, which is decreed ex officio by the judge, and to which the parties are obliged to attend to subscribe a compliance agreement. In the compliance agreement, the parties discuss measures to protect the collective right or interest that has been threatened by the defendant, and if possible, accept the agreement. In case it has been approved, it is then signed and the judge reviews it and approves it through a judgment. If the trial judge considers that the agreement signed by the parties does not comply with the purposes of protection of the collective right, or that it does not comply with current regulations or that for any other reason it is not appropriate, he can also reject it through a judgment.
Finally, if the compliance agreement is approved, it becomes res judicata. This we find especially problematic, especially in cases of environmental damage owing to contamination, because it can close the doors to a future action if the defendant continues polluting. However, the Constitutional Court has foreseen and managed this risk, and it has said that there is no res judicata if as a result of new behaviour of the defendant, the collective assets are again put at risk.
In relation to class actions, according to the applicable regulations, the early termination of the process could be done through a settlement hearing or a transaction between the parties, and by reference to the regulations of the General Procedural Code it could be said that it would also end the withdrawal of the class action lawsuit. Regarding each of the early termination mechanisms of the process, the following are of note.
The settlement can be agreed between the parties during the settlement hearing provided by law for class actions. The settlement agreement signed by the parties is treated as a judgment and has the effects of res judicata. Once the agreement is signed, the judge will order its publication in national journals, so that the members of the class that did not become part of the process may present themselves to prove their quality and claim the corresponding weighted compensation.
Regarding the transaction and withdrawal, despite the fact that Law 472 does not rule on its admissibility or inadmissibility for class actions, nothing would prevent the early termination mechanisms of the process from being applicable, by remission to the General Procedural Code. In relation to the transaction, we believe that it would have to be governed by the rules provided by the law regarding settlements, except that there is no mandatory settlement hearing. There is also the doubt of whether, once the transaction contract is concluded, it must be approved by the presiding judge, because the law is silent in this regard.
Concerning the withdrawal, also applied by referral to the General Procedural Code, many doubts arise about its origin and convenience to prematurely end the class action, especially for the effects on the members of the class that are not present in the process and that would be affected by what is decided in the process. Finally, we would like to expand on what was mentioned previously, regarding the inadequate identification of the class. This generates conflicts in practice, as it makes it impossible to settle because there is no clarity in the potential claimants or in the members of the class.
IV CROSS-BORDER ISSUES
In principle, Colombian law does not prohibit foreign claimants from exercising a popular action or adhering to a class action. However, such exercise is rare in practice.
In cases in which issues of international law are discussed, Colombian law does not establish restrictions for those who can exercise class actions in other jurisdictions. Cases that are brought before the knowledge of judges of foreign legal systems will then have to be governed by the applicable law of the sovereign state in question.
Although in practice the application of foreign judgments in the matter is unlikely, for the foreign judgment of a class action to have effects in Colombia, Colombian law requires the application of the figure of the exequatur, with the respective completion of its requisites.
The foreign decision must:
- not refer to property rights constituted in assets that were in Colombian territory at the time of indicating the process in which the sentence was issued;
- not oppose Colombian laws or provisions of public order, except procedural ones;
- be enforceable in accordance with the law of the country of origin and presented in a duly completed copy;
- not exclusively fall on a matter exclusive to Colombian judges;
- not concern an existing process or enforceable judgment by Colombian judges on the same matter; and
- meet the exequatur requirement.
V OUTLOOK AND CONCLUSIONS
The legal system does not clearly establish the criteria for establishing the class, nor does it contain clear procedural rules for its delimitation, which in practice creates difficulties regarding compensation, the conclusion of settlements and in the effects produced by the res judicata.
The judgment is imprecise and insufficient if, after the conviction, a significant number of people are affected, in which case individual compensation decreases significantly.
The absence of clear rules to determine the class means that the action largely loses its efficiency, since as claims evolve, lawsuits are filed by small groups of injured parties, which leads to enormous uncertainty in terms of the effects of res judicata in the first lawsuit.
Finally, while there are no clear mechanisms to identify the class in space and time, class actions will not guarantee the victims massive damages.
1 Javier Tamayo Jaramillo is the founding partner and director of Tamayo Jaramillo & Asociados.
2 In this regard, the Superior Council of the Judiciary, the body in charge of compiling the statistics of the exercise of popular action, among others, reported that, since the elimination of the economic incentive, popular actions decreased by approximately 60 per cent: ¿Se han transformado las acciones populares con ocasión de los cambios normativos y jurisprudenciales ocurridos en el periodo 2006–2012?, Manjarrés Bravo, Patricia Victoria. Universidad del Rosario, Bogotá, 2013.
3 Judgment C-630 of 2011. PJ. Luis Ernesto Vargas Silva, Constitutional Court.
4 Agreements No. PSAA06-3345 of 13 March 2006 and of 9 May 2006, of the Administrative Chamber of the Superior Council of the Judiciary.
5 Law 1285 of 2009, by means of which the law 270 of 1996 Statutory of the Administration of Justice is reformed.
6 Hernández Nárvaez, Adriana and Ducuara Granados, Janefriend Carolina. Eventual review of popular and class actions. Retrieved on 02/27/2018, at http://repository.unimilitar.edu.co/bitstream/10654/9226/2/HernandezNarvaezAdriana2012.pdf.
7 Article 4 of Law 472 of 1998 makes a non-exhaustive statement of collective rights and interests. Despite the generosity of the list, there is nothing to prevent a popular action from seeking to safeguard a collective right not included in the norm. The article quotes the following:
Article 4º. Rights and collective interests. Are collective rights and interests, among others, those related to:
- The enjoyment of a healthy environment, in accordance with the provisions of the Constitution, the law and regulatory provisions;
- Administrative morality;
- The existence of ecological balance and the rational management and use of natural resources to ensure their sustainable development, conservation, restoration or replacement. The conservation of animal and plant species, the protection of areas of special ecological importance, the ecosystems located in the border areas, as well as the other interests of the community related to the preservation and restoration of the environment;
- The enjoyment of public space and the use and defence of public property;
- The defence of public patrimony;
- The defence of the nation's cultural heritage;
- Public safety and health;
- Access to a service infrastructure that guarantees public health;
- Free economic competition;
- Access to public services and that their provision is efficient and timely;
- The prohibition of the manufacture, importation, possession, use of chemical, biological and nuclear, as well as the introduction into the national territory of nuclear or toxic waste;
- The right to safety and prevention of technically foreseeable disasters;
- The construction of buildings, buildings and urban developments respecting legal provisions, in an orderly manner, and giving prevalence to the benefit of the quality of life of the inhabitants;
- The rights of consumers and users.'
Equally, collective rights and interests are defined as such in the Constitution, ordinary laws and international law treaties signed by Colombia. The rights and interests set forth in this Article shall be defined and regulated by the regulations currently in force or those issued after the effective date of this law.
8 Tamayo Jaramillo, Javier. Las Acciones Populares y de Grupo en la Responsabilidad Civil, first edition, pages 185–187, Baker McKenzie, Diké, 2001.
9 Judgment of 24 August 2000. Administrative Tribunal of Cundinamarca. File AG-99-001. Class action, plaintiff Marcos Yesid García, against the Mayor's Office of Bogotá. In the judgment of 24 August 2000, decided by the Administrative Court of Cundinamarca, the claims of some owners of some properties were accepted, in which, if no corrective measures were taken, their houses were in danger of collapsing. The court ordered '[t]ake the necessary measures and perform the corrective works of drainage and containment sufficient to stop the thrusts of the land that come from the active landslide of the neighbourhoods of Granada Sur and Montebello, taking into account the recommendations of Ingeominas'. The Superior Court of Popayán ruled on the same line in the judgment of 8 October 2002, where it established 'that the contingent damage in the case analysed was evident and, therefore, there was no doubt of the right that assisted the consumers to obtain a product in which the possibility of error or failure of production and harm to the consumer is reduced to the maximum'. The arguments presented by the Superior Court of Popayán, Civil Chamber, referred to a reasonable interpretation of the provisions that regulate popular actions in defence of consumers and concluded that there was contingent damage that could be cautioned through such action. Judgment 8 October 2002. Mario Sagid Mosquera López v. Panamco Colombia SA.
10 Article 11, Expiry action, Law 472 of 1998.
11 Colombian Constitutional Court. Judgment C-116-08 of 13 February 2008, PJ. Dr Rodrigo Escobar Gil.
12 Article 56, Law 472 of 1998.