Thailand Certifies First Class Action

February 27, 2018

Thailand Certifies First Class Action

In what is thought to be the first order certifying a class under Thailand’s recently enacted class action legislation, the Act to Amend the Civil Procedure Code (Number 26) B.E. 2558 (the “Act”), the Civil Court in Bangkok has issued an order in case Black No.SorWor.4/2560 against Wax Garbage Recycle Center Co., Ltd. and others, granting the lead plaintiffs’ request for the case to proceed as a class action.

The case was brought against an industrial waste recycling operator in Ratchaburi province, claiming personal injury, property damage, and agricultural business interruption losses arising from alleged environmental breaches. Three lead plaintiffs claimed to represent a class of a village containing over 100 households, represented by Mr. Somchai Armeen, president of the Legal Right and Environmental Protection Association (LEPA).

In its order, the court did not give any detailed consideration to the five tests for certification set down in Section 222/12 of the Amended Code, but in a reference to the language of that section, made a broad finding that it was satisfied that if the proceeding was to be undertaken as an ordinary case it would cause an inconvenience, and that the background and experience of the three lead plaintiffs and their lawyer were sufficient to adequately and fairly protect the rights of the group.

The order certifying the class defines group members briefly as “persons having domicile and occupation in the area […] during the period of 2001 to 2017,” potentially giving rise to a large class of members as well as disputes over interpretation.

The certification order was not appealed by the defendants and has now become final. The court must now make a public announcement of the order, which must be published for three consecutive days in daily newspapers and other media, and which must contain a summary of the complaint, details of the certification order and the definition of the class, information on the rights of class members, and a specified period of not less than 45 days for class members to opt out. The case will then proceed to trial on liability and quantum in accordance with the case management procedures set down in the Act.

Background and Comment

The Act came into effect in December 2015. Modelled primarily on the U.S. class action regime, the Act amended the Thai Civil Procedure Code to implement a fully-fledged opt-out class action procedure for the first time in Thailand.

Significantly, unlike some other jurisdictions which have implemented class action or collective redress regimes in recent years, the Act does not limit the application of the procedure to certain narrow fields of law, or require the involvement of consumer protection agencies or other representative bodies to initiate proceedings. The mechanism is available to any lead plaintiff and their attorney for a wide range of claims for legal redress, which may be based on general tort or breach of contract principles, or other laws including those relating to environmental protection, consumer protection, labor, securities and stock exchange, and trade competition. The Act is therefore of potentially very broad application.

The Act has been somewhat slow to take off, but other actions currently pending certification include a similar claim for environmental damages against the Australian operators of a gold mine in central Thailand, (also the subject of a bilateral investment treaty arbitration with the Thai Government), a claim for false advertising on behalf of potentially 500,000 purchasers of imported frying pans, and a class action suit against Ford Motor Company that was apparently closely modelled on similar proceedings in Australia.

The court’s apparently broad-brush approach to applying the certification test in this case may now well encourage further suits to be filed. However, the real test of whether Thailand’s nascent class actions industry will take off will come when the courts’ approach to costs awards becomes known. The Act empowers the courts to make an award of costs to successful plaintiffs’ attorneys of up to 30 percent of the damages awarded, which are to be paid by defendants in addition to damages, rather than deducted from class members’ compensation. If the courts show a willingness to make costs awards at or near these levels, Thailand may very well follow in the steps of the United States and Australia to become the Asia Pacific’s leading consumer litigation destination. In the meantime the risks are escalating and international operators and their insurers should continue to monitor the situation.

Related Professionals

Aaron Le Marquer

Partner and Deputy Director, Dispute Resolution

Thailand

+66 2056 5555

Email

RELATED INSIGHTS

September 30, 2022

Cambodia Clarifies Product Labeling Rules and Announces Increased Enforcement

In keeping with the government’s strong focus on consumer protection in recent years, Cambodia’s consumer protection authority issued a notice on consumer product labeling on September 23, 2022. The notice from the General Department of Consumer Protection, Competition, and Fraud Repression (CCF) provides clarifications on labeling rules for general consumer products, goods, and services. The most significant clarification is that both locally produced and imported products, goods, and services must have a Khmer-language label or attach a product description in Khmer language. Imports may use a sticker with Khmer language as long as the minimum labeling requirements are met. The notice announces a transition period for companies to amend their labeling, allowing them to make changes to the labeling until December 31, 2022. According to the notice, the CCF will investigate and take enforcement measures starting January 1, 2023. This likely signals a major increase in enforcement efforts throughout 2023. Labeling Rules The CCF notice gives instructions on product labeling rules. In Cambodia, “product” refers to general products, goods, and services on the Cambodian market. Product-specific labeling regulations (e.g., for food products) overrule the requirements for these general products. The CCF notice provides the following instructions: All products on the market must have a label, or attach a product description, using Khmer language. Imported products that do not have a Khmer-language label printed on the packaging should provide a product description in Khmer. Companies can attach the necessary information or apply a sticker to the product. Trademarks on the products may use a foreign language but must be in line with the relevant local trademark registration. Foreign-language or different labeling is only permitted if authorized by the regulator, or by regulations that apply to a specific type of product. The label or product description must use an appropriate font

September 15, 2022

How Thailand’s Consumer Protection Board Handles Consumer Complaints

In the course of our work, we often hear about consumers in Thailand lodging complaints with the Office of the Consumer Protection Board (OCPB) about problems with a purchased product or service. The OCPB is a government agency attached to the Office of the Prime Minister. Its main duties are to protect consumers in Thailand with respect to product advertising, product labeling, and contracts, and to handle consumer complaints. However, there are exceptions to the types of consumer complaints that the OCPB can handle. This is because some consumer complaints must by law be handled by certain specialized agencies. Examples of these exceptions include consumer complaints relating to: health products (food, drugs, cosmetics, medical devices, household dangerous substances, and narcotics); medical services; insurance; pricing of consumer products; condominium juristic person; public land; rail, water, and air transportation; tourism; education; banking and finance; telecommunications; and electricity and water consumption. Procedure When a consumer complaint that the office can accept comes to the OCPB, the officers first consider whether the business operator has violated any laws, in which case the relevant authorities, such as the police, should handle the matter. When the officers consider it appropriate, they may ask the parties to mediate the dispute. Complaints in Bangkok are mediated by officers at the Bangkok OCPB. For complaints lodged in other provinces, the governors of the provinces may assign officers or agencies under their supervision to mediate. The OCPB can mediate twice within 90 days. If the parties still want to continue with the mediation, a subcommittee of the Consumer Protection Board (CPB)—the body that directs the OCPB—will then conduct two more mediation sessions within 90 days. If a resolution is still not reached, the subcommittee can conduct one additional mediation session before declaring the mediation failed and ending the complaint

January 12, 2022

An Overview of Franchising Law in Southeast Asia

The popularity of the franchise business model has grown rapidly in mainland Southeast Asia in recent years, with some of the world’s top brands becoming common sights in the commercial districts and shopping malls of major regional cities in Cambodia, Laos, Myanmar, Thailand, and Vietnam. Although these countries have not yet enacted franchising-specific laws, certain features of each country’s regulatory regime impact franchising. As such, well-prepared franchise business operations have comfortably adapted to each country’s regulatory framework, and the growth is poised to continue even as the global retail sector redesigns and redoubles its efforts in the wake of the COVID-19 pandemic. In fact, the franchise business model, which is both global and local at the same time, may offer retail entrepreneurs a solution in their quest to meet the challenges of the new retail economic realities. This article explains the legal frameworks that impact the franchise business model in Cambodia, Laos, Myanmar, Thailand, and Vietnam. For each country, this article discusses relevant regulatory considerations for franchise agreements, how to protect intellectual property rights, and judicial and arbitral procedures for resolving disputes that might arise between a franchisor and a franchisee. The full article can be downloaded through the button below. © 2021. Originally published in the Franchise Law Journal, Vol. 41, No. 2, Fall 2021, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

December 31, 2021

VAT Reduced to 7% under Amendments to Lao Tax Laws

In the last week of December, 2021, the Ministry of Justice published the Law Amending Certain Provisions of the Laws on Tax No. 01/NA, dated August 7, 2021, in the Government Gazette. The Law will come into force on January 1, 2022. The most notable amendments relate to Value Added Tax (VAT), which are summarized below. The new law also makes changes to the laws on tax management, income tax, and excise tax, which Tilleke & Gibbins will provide updates on in due course.

Industries

Practices

February 27, 2018