Class actions reached Congress

In February, 2009 the Federal Supreme Court ruled in re “Halabi” outlining for the first time the characteristics and requirements of class actions.

Notwithstanding the admission of class actions, the Federal Supreme Court highlighted some of the aspects which must be included if a law on this matter is passed. Such aspects include class certification, individuals or organizations entitled to file these actions (whether the action can only be filed by members of the class or public agencies and organizations as well) and the proceeding involved.    

Although several bills on class actions had been submitted to the Federal Congress, all of them had lost parliamentary status.

However, on May 7, three Lower House representatives from the Province of Salta: José Antonio Vilariño, Osvaldo Rubén Salum and María Inés Diez, submitted a new bill (the “Bill”). Lower House representatives Vilariño and Salum belong to Frente para la Victoria –the official party- and Lower House representative Diez belongs to Salta’s Partido Renovador.

This Bill had originally been submitted by Lower House representatives Caamaño and Urtubey in 2005, and later by Urtubey alone in 2007.

As regards the requirements to admit class actions, the Bill is based on the rules which regulate class actions in the United States (FRCP 23).

The proceeding ruled for class actions is an ordinary proceeding. However, in the case of urgent matters, the amparo proceeding is applicable.

Likewise, the Bill provides that compulsory mediation does not apply and that class actions cannot be settled unless the court ruling on the matter approves the agreement. In order to approve the settlement, the court must order that all members of the class are informed of the agreement.

When admitting a class action, the court must include a description of the members of the class’s characteristics and consider that every individual fitting such description is included in the class.

Individuals included in a class are entitled not to take part in the action. In that case, individuals must file a request to be excluded before a final decision is passed.

As regards services to class members, the Bill rules the court must choose the means it deems more appropriate. 

Incidentally, in the “whereas” of the Bill, the representatives mention the advantages and disadvantages of class actions and describe briefly the United States’ experience. 

Concurrently, on June 18, the Province of Neuquén’s Senator Horacio Lores submitted another bill on class actions. Senator Lores belongs to Movimiento Popular Neuquino (a political party in Neuquén).  

This bill is similar to that submitted by Lower House representatives Vilariño, Salum and Diez, since it is also based in the rules which govern class actions in the United States.

However, this bill establishes differences as regards the effect of the final decision since members of the class are entitled to be excluded from the action only if certain requirements are met. Those requirements must be determined by the court when ruling on the admission of such class action.

Although both bills are insufficient to regulate all matters related to class actions and their language must be improved, both bills proposing class actions are fairly similar to the United States’ FRCP 23. There, a member of the class represents a group of individuals in similar conditions. Another relevant characteristic is that in both bills as well as in the United States, the final decision has res judicata effects to all class members, except those who requested to be excluded from the proceeding.

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