Consumers’ associations and legal standing to sue

Tribunal E of the Commercial Court of Appeal (the “Court”) has recently confirmed the decision of a lower court Judge who had held that a consumers’ association has no standing to initiate a lawsuit to obtain compensation in favor of the persons that purchased public bonds with the advice and/or intervention of the sued financial entities.[1]

Firstly, the Court held that, even though the case was dealt with as a summary proceeding, it was possible to decide as a prior issue whether the plaintiff possessed standing, as it concerned a “substantial defense which may be filed in any type of legal proceeding, including summary proceedings”.

In the same way as the lower court, the Court decided that the lack of standing of the consumers’ association was clear and, therefore, it made such decision at an early stage of the proceedings.

Furthermore, the Court considered that even though these type of associations have the standing to protect consumers’ rights, the existence of a uniform common interest is always necessary in order to justify taking on representation in the matter. The Court stressed the necessity for a common and uniform factual cause related to the conflict which gives rise to the legal proceedings.

In this regard, the Court stated that, in this case, the relevant persons could not all be considered to be in a substantially similar factual situation, as the success of each claim would depend on its particular circumstances. Therefore, the Court concluded that there was no uniformity.

Likewise, the Court considered that the right of those persons to obtain a legal remedy through individual claims was not affected, as each individual claim had an economic entity which justified the filing of the claim.

Based on these arguments, the Court held that the consumers’ association lacked the standing to file the relevant lawsuit.