1. INTRODUCTION

Collective actions have been part of the Spanish justice system since 1984, 1 but they still raise many doubts as to how they should be approached in both constitutional and procedural terms. 2 Despite these issues, an attempt has been made to transplant this model into the Spanish Consumer Arbitration System (hereafter, CAS) and ‘collective consumer arbitration’ was established by Royal Decree 231/2008 of 15 February. 3 This piece of legislation stems from Spanish Law on Consumer Protection and is in line with Law 60/2003 of 23 December on Arbitration. The former conceives CAS as a means to satisfy the constitutional principle of consumer protection that should pervade the Spanish legal system, including the legal conception and practice of consumer arbitration. 4 The latter — which was drafted following the UNCITRAL Model Law on International Commercial Arbitration5 — provides the legal framework for arbitration matters, and its principles also embrace CAS. 6 However, the Spanish Law on Arbitration does not stipulate any form of collective arbitration and the model for drafting the consumer version is to be found in the Spanish Civil Procedure Act or Ley de Enjuiciamiento Civil (hereafter, LEC). 7

Against this background, and unlike US class arbitration, 8 collective consumer arbitration in Spain is not a by-product of the interaction between arbitration and collective actions, but a legislative product that aims to enhance consumer protection. 9 However, collective consumer arbitration apparently aims to mirror collective actions in Spain, as does class arbitration. 10 It should be noted that collective action provisions in Spain distinguish between diffuse and collective interests — where the former concerns an undetermined number of people and the latter a determined or determinable number — that give rise to different collective actions. 11 As the second part of this chapter shows, collective consumer arbitration focuses on collective interests and excludes diffuse interests from its scope. However, Royal Decree 231/2008 fails to address some key issues for making arbitration work as a representative device, i.e. one that is capable of deciding on the affairs of absent group members. In the light of this, it has to be concluded that it is a procedural joinder but not a truly collective arbitration. The third part of this chapter elaborates on this point by examining the provisions devoted to dealing with this type of arbitration in Royal Decree 231/2008. The fourth part addresses some recognition and enforcement issues of arbitral awards rendered in this type of proceedings and the chapter finally concludes with some brief remarks on future legislative action.

2. HOW ‘COLLECTIVE’ IS SPANISH COLLECTIVE CONSUMER ARBITRATION?

The consumer arbitration administrative system was set up on the basis of the 1984 Law on Consumer Protection, 12 although it was not legally established until 1993. 13 In 2008, CAS was rearranged as a consequence of Law 60/2003, which abrogated the 1988 Law on Arbitration, 14 with a view to filling in the gaps and shortfalls in the former system, such as the lack of collective arbitral proceedings. 15 CAS only applies to disputes over consumer matters between consumers and professionals or businesses and does not cover cases involving poisoning, injury and death, or that show reasonable signs of a criminal offence. 16 As said above, the system is pervaded by the principle of consumer protection, and that is why it is only consumers that are entitled to claim their legal and contractual rights before an arbitral tribunal, i.e. professionals and businesses cannot initiate this type of arbitration. 17 CAS is in line with Directive 93/13/ECC of 5 April 1993 on unfair terms in consumer contracts, 18 according to which consumer arbitration is only feasible and any arbitral awards are only enforceable in Spain when the arbitration agreement either submits the dispute to a system established by law or was concluded after the dispute arose. 19

CAS is structurally conceived as a free administrative service to resolve consumer matters, using a device that in principle sets formalities aside. 20 As a result of the 2008 reform the system is now made up of several bodies, namely, Consumer Arbitration boards, the Commission of Consumer Arbitration boards and the General Council, which are administrative bodies, on the one hand, and arbitration tribunals on the other. The main administrative bodies are the Consumer Arbitration boards, which are responsible for managing the system and providing administrative and technical services to arbitrators and parties to arbitration; in addition to the National Consumer Arbitration board, local boards can be established under the authority of the respective public administration. As mentioned previously, only the consumers are entitled to request arbitration before the board chosen by both parties to the arbitration; if no board is chosen, the local board nearest to the consumer’s domicile is competent to administer the arbitration. 21 Should a request (not) be admitted for arbitration, this decision can be challenged before the Commission of Consumer Arbitration boards. 22 The Commission is also in charge of issuing guidelines and reports, with the aim of coordinating arbitrators and avoiding contradictions. 23 However, it must be highlighted that as arbitrators’ actions are governed by the principles of independence and impartiality, they are not obliged to apply these guidelines as long as they give their reasons. In general, arbitrators have to comply with specific requirements and show their qualifications as requested by the General Council. 24

The debate as to whether arbitration can be conducted on a collective basis has not been settled in Spain. 25 However, it has been concluded that arbitration is suitable for pursuing collective but not diffuse interests, inasmuch as they are neither legal nor contractual rights, 26 while the fact of arbitration’s voluntary nature seems to be in contradiction with interests that concern an undetermined number of people. 27 Accordingly, collective consumer arbitration aims at ‘the resolution in a single consumer arbitration of conflicts that, based on the same factual presumptions, would have the power to injure the collective interests of consumers and users and that affect a determined or determinable number of such persons’. 28 Remarkably, the language of this provision closely follows Article 11(2) LEC, which deals with the issue of who has standing to bring collective interests before the courts. 29 But there is one key issue that makes all the difference between both pieces of legislations, i.e. Royal Decree 231/2008 does not address the question of who has standing to bring collective interests before arbitral tribunals.

It is well-known that European legal systems have been highly reluctant to admit the introduction of collective actions, due to their apparent failure to guarantee the right to present one’s case. 30 The benefits of collective actions lie in the fact that they provide access to justice and procedural economy, and for this reason the trend is slowly undergoing a change and civil law countries are also establishing collective actions in their systems. 31 Standing has been a key issue on the path to setting these up. Civil law systems construe the civil procedure on a bilateral basis, meaning that litigation is for those claiming a contractual or legal right. This is not the case of collective actions, in which the representative claimant litigates on behalf of absent group members. The shortcomings of traditional legal theory’s approach to civil procedure have meant that civil law systems have evolved and new concepts have emerged to cover disputes involving a determined, determinable or even undetermined number of persons; 32 in other words, along with subjective rights, ‘collective and diffuse interests’, and even ‘homogeneous individual rights’ have now been identified. 33 The next step was the legal designation of the person or body who had the standing to bring such interests before the courts.

Spain is no exception to this trend. 34 Spanish collective actions are not transsubstantive but are basically related to employment and consumer matters. More specifically, collective consumer actions are characterized by their typicality, which means that there are a significant number of consumer laws, and almost all contain a rule about what type of collective actions are available to pursue the collective and diffuse consumer interests enshrined therein, and indicating who is entitled to bring such actions before the courts. 35 While these rules are scattered among several laws, 36 further specifications about collective proceedings are to be found in LEC. In particular, Article 222(3) LEC makes an exception to the general rule that the final judgment is only binding on the parties to the proceedings and their successors, i.e. it will also be binding on non-parties to the proceedings whose rights and interests have been brought before court by those entitled to represent them and initiate collective actions. 37 This general rule is supplemented by a specific rule dealing with collective actions undertaken by consumer associations. 38 While public bodies such as the public prosecutor and the Spanish Agency of Consumption, Food Safety and Nutrition, as well as consumer groups and even individuals are entitled to litigate regarding this type of interests, in practice the most significant representative claimants are consumer associations. 39

Despite the significance of provisions on standing and res iudicata to pursue interests and rights on a collective basis, Royal Decree 231/2008 does not mention them. Article 58(1) of Royal Decree 231/2008 stipulates that collective arbitration is to be initiated by the president of the competent consumer arbitration board either on her own initiative, the initiative of the arbitration boards of inferior territorial jurisdictions or at the request of the relevant representative consumer association. However, this is not a rule on standing, i.e. indicating who is entitled to bring and represent collective interests before arbitral tribunals. In fact, once the decision has been taken and arbitral proceedings commence, the general rule on standing is applicable, 40 hence consumers have to claim or otherwise intervene in the proceeding for their legal or contractual rights to be arbitrated. Remarkably, there is no further reference to consumer associations which have a leading role in bringing collective actions before the courts in practice in Spain, i.e. in the absence of a specific provision, they are not entitled to pursue ‘collective interests in arbitration’. 41 By the same token, Royal Decree 231/2008 does not address the binding effects of arbitral awards on third parties should the arbitral proceedings be truly collective; the usual principle of res iudicata is thus applicable, i.e. the award is only binding on parties to the arbitration. 42 In the light of this gap, it can be concluded that what is referred to as ‘collective consumer arbitration’ is a mechanism for dealing with large-scale disputes arising out of the same event, but is based upon the mere aggregation of individual claims. A closer look at the different stages will confirm this.

3. COLLECTIVE CONSUMER ARBITRATION IN SPAIN: FEATURES AND CRITIQUES

A. The Consumer Arbitration Board in Charge of Administering Collective Arbitration

CAS is administrative in nature, for which reason each arbitration board only operates in a given geographical area. Collective arbitration in particular is to be administered by the arbitration board with jurisdiction in the area where consumers whose legitimate economic rights and interests have been affected by the event brought to arbitration, are domiciled. Should affected consumers live in more than one autonomous region of Spain, the National Arbitration Board is competent to administer the arbitration procedure. 43 As will be seen in the following sections, the competent board pursuant to these clear-cut rules decides whether to initiate collective consumer arbitration, and if it decides to do so, takes the necessary steps to open the procedure, namely, obtaining the requisite acceptances from the parties to the arbitration and appointing the arbitration tribunal.

However, the jurisdiction issue is far from being settled, as the relevant board may have to make the decision to arbitrate on a collective basis at a time when the group has still not been determined. The make-up of the claimant group may therefore change during the arbitral proceedings, but nothing is said about how to proceed in these cases, i.e. whether the non-competent board should refer the arbitration to the newly competent board or not. 44 In contrast, it is only once the decision to arbitrate collectively has been made that a notice inviting interested consumers to join the proceedings is published in an Official Journal or by some other means. Furthermore, while pre-trial discovery is highly unusual in Spain and is limited to cases stipulated by law, the courts can be requested to help establish a group made of a determinable number of persons by adopting the appropriate measures, including requesting the respondent’s cooperation. 45 However, Royal Decree 231/2008 makes no reference to this LEC provision, and by default consumer arbitration boards are not allowed to resort to the courts for other than the usual support measures. 46

The president of the competent consumer arbitration board is responsible for deciding whether to arbitrate on a collective basis or not. The initiative can come from her, from arbitration boards in inferior territorial areas or can be requested by the associations representing consumers in the area where the consumers’ collective interests have been affected. It should be noted that the latter’s participation is supposed to end at this point, as nothing is said about their intervening in the arbitral proceedings; otherwise, a truly collective arbitration would have been set up. There is also no further explanation of the meaning of ‘representative associations’ in Royal Decree 231/2008, although the notion is present in the Law on Consumer Protection, namely, only associations registered in a specific public registry are to be deemed ‘representative’. 47 This requirement seems to be pointless, bearing in mind the fact that they do not actually join in the collective arbitration; while Spanish legislation requires registration to ensure an adequate representative claimant as far as possible, this provision is meaningless if this is not the case. In contrast, it would have made sense to entitle any association and, in particular, a group of affected consumers, to request collective arbitration. 48

Finally, it is striking that access to collective arbitration is only granted to consumers domiciled in Spain and not to those domiciled in other countries, even when the businesses or professionals responsible for the matters in dispute are based in Spain. 49 In the light of Regulation (EC) 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws, 50 this geographical limitation is highly regrettable. In contrast, consumers domiciled in Spain can take advantage of this kind of arbitration to request arbitration against businesses or professionals based or domiciled in foreign countries.

B. Arbitration Agreements and Intervention Issues

Arbitration agreements can either be incorporated into contracts or separate contracts can be drawn up, but they always record the parties’ willingness to submit their differences to CAS. 51 In line with Article II of the New York Convention on the recognition and enforcement of foreign arbitral awards, arbitration agreements must be written, signed by the parties or contained in an exchange of letters, telegrams, telexes, faxes and any other means of electronic communication allowing written documentation of the agreement, even when it is only electronically or optically available. 52 So far, nothing here stands out as being particularly innovative. However, there is one feature that makes the system unusual, and it is that companies and professionals can join CAS on an ex ante basis, meaning that they publicly declare themselves to be engaged in CAS, thereby accepting any arbitration requested by any consumers trading with them. The benefit in doing so lies in the fact that all those agreeing publicly to join the system can sell this as an extra service to consumers, who receive a clear signal that they can claim against the respective professional or business by resorting to CAS should conflict arise. Professionals and businesses who are interested in sending this signal have to offer publically to submit to CAS, and if accepted are then registered. Should a dispute arise later on, consumers simply have to request arbitration before the competent arbitration board. 53 Hence, the arbitration agreement may consist of an ex ante public offer to submit to CAS plus the consumer’s request for arbitration. In cases where there had not been a public offer to submit to CAS, or this one had not been accepted, consumer’s request is equally admitted, but the respondent must expressly accept arbitration. In short, CAS admits both pre- and post-dispute submission agreements.

The case of collective consumer arbitration is somewhat different because it must be specifically accepted by respondents; once the competent board decides to initiate collective arbitral proceedings, the professionals or businesses responsible for the event that has allegedly caused injury to consumers have to give their express consent to it, 54 otherwise, the case file is archived. 55 The 2008 statute provides no rationale for this requirement, and there is no plausible explanation for it in the light of the structure of this type of arbitration. In fact, it is surprising that it is not included in the scope of public offers to submit to CAS made by professionals and businesses, bearing in mind that collective arbitration only deals with consumers joining the proceedings and not with third parties to the arbitration. 56

Should this procedure be accepted by the relevant professional or business, the collective proceedings still have to be accepted by individual consumers, who are literally invited to claim their legal or contractual rights arising out of the matter in dispute. To this end, the affected consumers are notified of the respondent’s acceptance by information published in the Official Journal in the region where the dispute is taking place. 57 As will be seen later, if they do not join the arbitration, they are not bound by any arbitral award that may be rendered. 58

This notification process raises many issues, in particular concerning its efficiency and effectiveness, bearing in mind how many consumers regularly read the wide range of Official Journals published in Spain. Admittedly, the president of the consumer arbitration board has the power to make the information public by other mean, although as this is a discretionary power, the president in question may choose not to do so or may resort to the newspapers; but it would certainly be strange if she gives individual notification, which is the best way to build a collective arbitration. Furthermore, the notification’s content is very basic and consumers are only informed that the president agrees to the initiating of the action and that they have a period of two months to join the proceedings; otherwise they are allowed to intervene before the arbitral hearing, but only in the steps taken after the date of their intervention. 59

Given these provisions, this is clearly not a version of collective actions; while the fact that consumers have to join the proceedings could call to mind an opt-in system, the issue of the standing to represent consumers in the arbitral proceedings is not addressed. While it is true that consumers do not need legal representation in arbitration, neither do they have to act on a collective basis during the proceedings. Hence, the legal understanding of ‘collective arbitration’ really amounts to aggregating as many claims as possible. To this end, consumers may join the arbitration in the two-month period following notification and intervene during the proceedings provided that the hearing has not yet taken place. Meanwhile, if the businesses or professionals involved accept collective arbitration, this has the effect of suspending any other procedure that could have been initiated by an individual request for arbitration arising out of the same factual scenario, and these requests have to be transferred to the board competent to handle the collective arbitration within 15 days after notification of the acceptance. It should be noted that this rule applies to the stage at which individual arbitral proceedings have not yet been opened, or the petition for arbitration has been transferred to the parties to the arbitration but the arbitrators have not yet been appointed; in this case, the claimant and respondent must be notified of the suspension and transfer of the proceedings. 60 Individual proceedings that have already been before an arbitral tribunal are not suspended, but an objection by the respondent at any time, including during the hearing, on the grounds that a collective arbitration has been opened, requires suspension and transfer; in other words, the decision to transfer the case effectively lies with the respondent.

The rationale for these provisions is that collective arbitration absorbs all individual arbitrations, including cases in which these have already been initiated. Consumers are not entitled to opt out, and neither can they initiate individual proceedings while the collective arbitration is underway. In principle, this could impair consumers’ constitutional right to present their case. 61 A case in point is the one underlying a request for a preliminary ruling currently before the Court of Justice of the European Union, stemming from a collective action involving 101 banks that was brought before a commercial court in Madrid in 2010 by a consumer association, on the grounds that their mortgage contracts included unfair terms. 62 In view of the lengthy procedure involved, many consumers decided to litigate individually, but the defendants have applied for a stay of individual proceedings on the grounds that the judgment to be rendered in the collective action is a preliminary issue in relation to these individual claims. 63 While the system in Spain is neither an opt-in nor an opt-out system, a Barcelona commercial court decided to ask the Court of Justice whether the rule on preliminary issues and suspension of proceedings was consistent with EU consumer protection, arguing that ‘the consumer is bound by the decision in those [collective] proceedings without having had the opportunity to put forward the appropriate pleas or adduce evidence with full equality of arms’. 64 However, while the Court of Justice decision may be of interest for collective actions and their structure in Spain, the same does not apply to collective arbitration, as consumers not joining the procedure can request arbitration immediately after the arbitral award has been rendered. 65

C. Settlement Agreements

Businesses and professionals that accept collective arbitration can propose a settlement agreement with a view to complying with, wholly or in part, the rights at stake. 66 In this case, the notification advising affected consumers of the arbitration must also contain information on the settlement proposal. 67 However, nothing is said as to what happens next; the affected consumers may obviously accept or reject the proposal, but the issue is how the settlement interacts with the arbitral proceedings, and thus, whether it can gain preclusive effects. One option is that it has no effect on the arbitration, in which case this will simply continue with the consumers who do not accept the settlement. Another option would be to render the same number of arbitral awards as there are consumers that accept the settlement, thereby applying the rules on settlement agreements provided for individual arbitrations. 68 However, the option of taking the settlement into account within the collective arbitration seems to be preferable, i.e. the arbitral award will not only decide on the claims of consumers that have not accepted the settlement, but will also refer to the settlement agreement, and by this means it will gain preclusive effect, at least with regard to consumers that have accepted it. 69

D. Arbitral Proceedings

Once the affected consumers have been notified, the president of the competent consumer arbitration board has to appoint the arbitral tribunal, 70 which proceeds according to the general rules applicable to arbitral proceedings with regard to the parties’ communications and proof, and the hearing. The arbitral award is generally rendered within a period of six months, 71 which begins the day after the two month period for affected consumers to join the proceeding expires. 72 No cases have been reported so far, but the proceedings’ ambiguities and the extending of the deadline for rendering the award raises the question as to whether collective arbitration really does favour consumers, in the light of the delay involved in resolving cases. 73

It should be pointed out here that there is no provision similar to Article 222 LEC. The applicable rule for the award’s binding effects is thus that provided by the Spanish Law on Arbitration, which does not mention the special case of collective arbitration. Accordingly, awards rendered in collective consumer arbitrations are only binding on consumers that join the proceedings and do not have preclusive effects for consumers that were affected by the factual presumptions discussed during the proceedings but who remained outside them. 74 In other words, the latter are entitled to assert their rights, for example, by requesting an individual arbitration.

4. RECOGNITION AND ENFORCEMENT ISSUES

The previous sections have sought to explain that collective consumer arbitration in Spain is a procedural joinder but is not representative in nature, i.e. one that makes arbitrating on the rights of absent group members possible. For this reason, no objections other than the usual ones ought to be raised should an arbitral award rendered in this type of arbitral proceeding seek to be enforced in another state; although only consumers resident in Spain are entitled to resort to collective arbitration, it can be initiated against professionals or businesses that are domiciled or based in a foreign country. 75 In this case, the New York Convention on the recognition and enforcement of foreign arbitral awards would be applicable. 76 While different challenges to the recognition and enforcement of US class awards could be raised, 77 this does not apply to collective awards in Spain.

Objections regarding arbitration agreements in Spain are in principle inappropriate, since both parties have to expressly accept arbitration. 78 The same applies to objections regarding arbitral proceedings. While there are several that can be raised against US class arbitration, 79 — namely, the lack of agreement on class treatment, privacy and confidentiality issues, the composition of the arbitral tribunal, the lack of proper notice and the inability to present one’s case — none of these are applicable to the procedure in Spain, as, apart from its initial stage, it is no different from individual arbitrations, including the application of the general rules on privacy and confidentiality. In particular, all affected consumers are able to present their cases, since there is no representative claimant.

The right to a fair trial/arbitration is protected under the public policy clause, and this objection could be raised to ensure that group members have been adequately represented, especially in cases of collective proceedings construed on an opt-out basis. But this is clearly not applicable in Spain, either, as everyone bound by the arbitral award is already a party to the arbitration. By the same token, it would be very difficult to raise the public policy clause on the grounds that a conflict of interest had led to a fraudulent award, 80 because the lack of a representative claimant prevents one interest from prevailing over others within the claimant position, in that the arbitral tribunal will have to assess all defences and objections raised during the proceeding.

5. CONCLUDING REMARKS

While there is no doubt that collective consumer arbitration is a procedural joinder, it is definitively not a mechanism by which absent group members can be bound by the arbitral award. The initial intention of establishing a collective action mechanism can be found in the provisions laid down by Royal Decree 231/2008, indicating that this type of arbitration deals with conflicts involving the collective interests of consumers and affecting a determined or determinable number of such persons. However, the procedural mechanism chosen involves aggregating claims, not a representative device.

Royal Decree 231/2008 also addresses the consolidation of claims where a number of arbitrations arising out of similar factual scenarios have been requested. 81 As the statute does not address the latter’s interaction with collective arbitration, this silence amounts to an alternative, meaning that consumer arbitration boards and interested parties can choose between the two procedures. As a matter of fact, it should be pointed out that the consolidation of claims mechanisms can be more beneficial than collective arbitration, insofar as the respondent’s acceptance is not specifically requested in this framework and the president of the arbitration board can mandatorily consolidate arbitrations on the grounds of procedural economy. 82 At any rate, in its current terms it is more practical than collective arbitration, whose reform ought to be considered.

In the light of the shortcomings highlighted in this chapter, current collective consumer arbitration needs a thorough overhaul which addresses the currently absent issues of standing, finance, 83 opt-in/opt-out rights, 84 and enhances the information given to the consumers affected by the event that gives rise to the damage. The termination of collective arbitration by settlement agreement ought to be tackled as well, in particular as it could turn arbitration into a preferable alternative to collective litigation; the LEC does not address this issue, and a settlement reached in the course of a collective action is thus not binding on third parties, even in spite of court approval. 85 In this regard, Royal Decree 231/2008 is to be seen as a missed opportunity, as termination by settlement agreement is not possible in collective arbitration; were the latter to be feasible, it would have made arbitration more attractive to stakeholders than collective litigation. However, the fact that Royal Decree 231/2008 is a piece of secondary legislation cannot be disregarded; while the amendments mentioned above involve the right to a fair trial, the lawmaker of Royal Decree 231/2008 was the Spanish government and not parliament. Hence, all that remains is to advocate a thorough revision of collective consumer arbitration by the Spanish legislature via, e.g. amending the Spanish Law on Arbitration. This would also have the benefit of opening a debate on whether to extend collective arbitration to other matters.

1
See Article 20 of Law 26/1984 of 19 July on Consumer Protection (Ley para la defensa de los consumidores y usuarios), now Article 24 of Royal Legislative Decree 1/2007 of 16 November, which issued a consolidated text on the Law on Consumer Protection and other supplementary laws (Texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios y otras leyes complementarias).

2
See Carballo Piñeiro, Laura, Las acciones colectivas y su eficacia extraterritorial. Problemas de recepción y trasplante de las class actions en Europa, 2009, pp. 36-96.

3
The key provisions are Articles 56-62 of Royal Decree 1/2007. An English translation can be found in Strong, SI, "Collective Consumer Arbitration in Spain: A Civil Law Response to US-Style Class Arbitration", Journal of International Arbitration 30(5), 2013, p. 508. On the system’s general features and historical background, see Marín López, Manuel Jesús, "La nueva regulación del arbitraje de consumo: el Real Decreto 231/2008, de 15 de febrero", Diario La Ley, No 6905 of 17.3.2008.

4
See Article 51 of the Spanish Constitution.

5
See the Explanatory Introduction to Law 60/2003 on Arbitration. See UNCITRAL Model Law on International Commercial Arbitration (UN Resolution 40/72 of 11 December 1985), with amendments as adopted in 2006 (UN Resolution 61/33 of 18 December 2006).

6
See Cremades, Bernardo María and Cortés, Rodrigo, "Class Actions and Arbitration Procedures—Spain", in Billiet, Philip et al. (eds.) Class Actions and Arbitration in the European Union, 2012, pp. 155-156.

7
Articles 6, 11, 15, 15bis, 221, 222(2), 256(1)(6), 519 LEC.

8
The interaction between class actions and arbitration has been explored in the US by the inclusion of arbitration agreements in standard contracts. The aim is to avoid class actions, insofar as the Federal Arbitration Act favours arbitration over jurisdiction, even in consumer matters. See Byrne, Thomas A., "Class Actions", Mercer Law Review, 57, 2006, pp. 1031-1037. Critical, Gilles, Myriam E., "Opting Out of Liability: The Forthcoming, Near-Total Demise of the Modern Class Action", Michigan Law Review, 104, 2005, pp. 381-430. However, this trend has resulted in class arbitration being accepted, i.e. although the agreement excluding jurisdiction is honoured, arbitration may proceed on a class-wide basis and different arbitral organizations have issued rules on class arbitration proceedings, mainly by imitating class action proceedings to safeguard absent class members’ due process rights. See American Arbitration Association. Supplementary Rules for Class Arbitrations (2003), http://www.adr.org/sp.asp?id=21936 (last access, 1.9.2010) (hereafter, AAA Supplementary Rules); Judicial Arbitration and Mediation Services Class Action Procedures (2009), http://www.jamsadr.com/files/Uploads/Documents/JAMS-Rules/JAMS_Class_ Action_Procedures-2009.pdf; National Arbitration Forum. Class Arbitration Procedures, http://www.adrforum.com/users/naf/resources/Arbitration%20 Class%20Procedures%202007.pdf.

9
Outside the United States, two collective arbitration cases have been reported, one issued by a Colombian arbitral institution [Valencia v Bancolombia (Tribunal Arbitral de la Cámara de Comercio de Bogotá), available at http://www. kluwerarbitration.com. Comments by Strong, SI, "Enforcing Class Arbitration in the International Sphere: Due Process and Public Policy Concerns", University of Pennsylvania Journal of International Law, 30, 2008, p. 1], and another by a Canadian arbitral institution [Kanitz v Rogers Cable Inc., [2002] 58 O.R. (3d) 299, 21 B.L.R. (3d) 104, available at http://www.kluwerarbitration.com>]. In Canada, the issue has evolved in a similar way to the United States, and the Canadian Supreme Court issued a decision supporting arbitration and excluding class proceedings [Dell Computer Corp. v Union des consommateurs, 2 S.C.R. 801, 2007 SCC 34 (S.C.C. 2007).]. See, in general, Saumier, Genevieve, "Consumer Dispute Resolution: The Evolving Canadian Landscape", Class Action Defence Quarterly, p. 1 available at http://ssrn.com/abstract=1291960; Saumier, Genevieve, "Consumer Arbitration in the Evolving Canadian Landscape", Penn State Law Review 113, 2009, p. 1203; Strong, SI, "Class Arbitration Outside the United States: Reading the Tea Leaves", Legal Studies Research Paper Series, Research Paper No. 2009-36, University of Missouri, available at <http://ssrn.com/abstract=1517272.].

10
See n. 8 above.

11
See Article 11(2) and (3) LEC.

12
See Article 31 of Law 26/1984 on Consumer Protection.

13
The Consumer Arbitration System was set up by Royal Decree 636/1993 of 3 May 1993, now replaced by Royal Decree 231/2008. The Spanish government was entitled to issue the latter by Law 44/2006 of 29 December amending the Law on Consumer Protection. Other relevant rules are Articles 57 and 58 of Royal Legislative Decree 1/2007 of 16 November approving a text consolidating the General Law on Consumer Protection and other supplementary laws, and Law 60/2003 of 23 December on Arbitration.

14
Law 60/2003 replaced the 1988 Law on Arbitration which Royal Decree 636/1993 was in line with, i.e. the latter was supplementary to CAS and included specific references to the 1988 Law; once the 1988 Law on Arbitration had been abrogated, it was clear that new provisions on the arbitration system were necessary.

15
The aggregation of claims was feasible but it depended on a group of consumers actually requesting arbitration together or a consumer association doing so on their behalf; however, the 1993 Royal Decree made no mention of consumer arbitration boards bringing claims arising from the same event together. See Marcos Francisco, Diana, El arbitraje de consumo y sus retos, 2010, pp. 264-265.

16
See Articles 57(1) of Law 44/2006 and 2(2) of Royal Decree 231/2007. The latter is broader than the former in that it excludes from CAS tort liability arising out of the other exclusions indicated, such as events that show signs of crime. This exclusion contradicts Law 44/2006, a contradiction which is not in line with the principle of hierarchy of norms, not to mention the principle of consumer protection. See Pita Ponte, José María, "La implementación del Real Decreto 231/2008, de 15 de febrero, por el que se regula el Sistema Arbitral de Consumo", in González Pillado, Esther (Coord.), Arbitraje y mediación en materia de consumo, 2012), p. 26.

17
However, counterclaiming is feasible, a fact which is strongly criticized. See Pita Ponte, José María, n. 16 above, pp. 24-25 and pp. 40-43; Richard González, Manuel, "Análisis crítico del sistema y los procedimientos arbitrales y de mediación en Espana. Especial atención a la reforma de la Ley de Arbitraje (Ley 11/2011) y al proyecto de Ley de Mediación de 2011", in Richard González, Manuel, Riaño Brun, Iñaki and Rifá Soler, José María (eds.), Estudios sobre arbitraje de consumo, 2011, pp. 133-134.

18
Council Directive 93/13/ECC of 5 April 1993 on unfair terms in consumer contracts [1993] OJ L 95/29. Annex to Directive 93/13/ECC includes within the terms referred to in Art. 3(3)1, i.e. those that are null and void, terms ‘(q) excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract’. This provision has been transposed to Article 90 of the 2007 Law on Consumer Protection.

19
Apart from specific sector-based arbitration systems, most consumer disputes are submitted to CAS.

20
At least, this is the official description of the system. An in-depth reading of Royal Decree 231/2008 reveals a different picture, inasmuch as many administrative formalities, e.g. concerning notification, are applicable; the more administrative formalities, the more grounds there are for challenging the arbitral awards. See criticism in Pita Ponte, José María, n. 16 above, p. 22 and p. 32. As to the system’s being free of charge, parties to the arbitration proceedings only have to pay for gathering their own proof, as evidence requested ex officio is paid for by the state. See Article 45(3) of the Royal Decree 231/2008.

21
If several Consumer Arbitration Boards cover the same geographical area, the smallest is deemed competent. Should a geographical limitation be included in the public submission issued to CAS by the respective business, the Consumer Arbitration Board to which the business makes the submission is competent unless the business has made submissions to several boards, in which case the consumer can choose. See Article 8 of Royal Decree 231/2008.

22
Ibid, Article 11(1).

23
In the light of the neat separation between the administrative bodies responsible for handling CAS and the arbitrators, this Commission of Consumer Arbitration Board power is to be criticized. See Pita Ponte, José María, n. 16 above, pp. 34-37.

24
Compliance with requirements and qualifications is monitored by the president of the respective consumer arbitration board. See Article 17 of Royal Decree 231/2008.

25
See for a thorough account of all arguments contra and in favour of this type of arbitration Strong, SI, Class, Mass, and Collective Arbitration in National and International Law, 2013, passim.

26
For example, the Barcelona Provincial High Court rendered null and void an arbitral award ordering RENFE, the national railway service, to include some information on short distance train tickets. The court understood that the consumer did not have standing, as she was not claiming an individual right but a diffuse interest. See the Audiencia Provincial (Sección 14ª) de Barcelona judgment of 3 November 2003 (AC 2003, 1763).

27
See among others, Marcos Francisco, Diana, "¿Es posible la tutela de intereses colectivos y difusos en el arbitraje de consumo? El arbitraje colectivo de consumo en el Real Decreto 231/2008, de 15 de febrero, regulador del Sistema Arbitral de Consumo", Revista Boliviana de Derecho 11, 2011, p. 188.

28
Article 56 of Royal Decree 231/2008. (SI Strong translation. See n. 3 above)

29
The provision read as follows: ‘If those injured by an event are a group of consumers or users whose members are determined or easily determinable, the standing to pursue the protection of those collective interests pertains to consumer associations, legal entities whose main objective is consumer protection and groups of the consumers affected by the said event’. (Author translation).

30
See Stadler, Astrid, "Collective Action as an Efficient Means for the Enforcement of European Competition Law", in Basedow, Jürgen, Private Enforcement of EC Competition Law, 2007, p. 211.

31
The number is expected to increase as a result of the Commission’s Recommendation ‘on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law’ [C(2013) 3539 final].

32
Taking this approach, see Cappalli, Roberto and Consolo, Claudio, "Class Action for Continental Europe? A Preliminary Inquiry", Temple International and Comparative Law Journal 6, 1992, p. 217.

33
Such terms originate in Brazil’s Consumer Protection Code, but the discussion about the meaning of collective and diffuse interests is still ongoing. See, among others, Bujosa Vadell, Lorenzo, La protección jurisdiccional de los intereses de grupo, 1995, pp. 59-62; Gutiérrez de Cabiedes e Hidalgo de Cabiedes, Pablo, La tutela jurisdiccional de los intereses supraindividuales: colectivos y difusos, 1999, passim; Pérez Ragone, Álvaro J. D., "¿Necesitamos los procesos colectivos? Entorno a la justificación y legitimidad jurídica de la tutela de intereses multisubjetivos", Revista de Derecho Procesal, 2005, pp. 618-629.

34
See Carballo Piñeiro, Laura, n. 2 above.

35
See Carballo Fidalgo, Marta, La protección del consumidor frente a las cláusulas no negociadas individualmente. Disciplina legal y tratamiento jurisprudencial de las cláusulas abusivas, 2013, p. 243; Carballo Piñeiro, Laura, "La tipicidad de las acciones colectivas en el ordenamiento jurídico español", Justicia. Revista de derecho procesal, 2007, p. 63.

36
Royal Legislative Decree 1/2007 consolidating the 1984 Law on Consumer Protection and other consumer laws has reduced the number of these laws, of which there were over twenty-five. Some still remain, and include rules on collective actions, such as Articles 32 and 33 of Law 3/1991 of 10 January on Unfair Competition, and Article 6 of Law 34/1988 of 11 November on Advertising.

37
This provision specifically refers to Article 11 LEC inasmuch as this is also a rule about the standing to bring legitimate consumers’ collective and diffuse rights before court. However, it also applies to any other person entitled to initiate collective actions in accordance with any consumer law dealing with this issue.

38
Article 221(1) LEC addresses the following cases: (1st) should the judgment decide on a redress collective action, the court must individually specify the affected consumers if possible; if not, it must at least enumerate all relevant elements to make their identification feasible at the enforcement stage; (2nd) if the judgment renders an act wrongful, usually providing for injunctive relief, the court must establish whether it is binding on third parties; (3rd) should individual consumers have joined the collective proceeding, the judgment must reach a decision on those claims in addition to the collective claim presented by the respective consumer association. Article 221(2) refers to injunctive collective actions and the courts’ power to make the judgment public by its preferred means and at the defendants’ expense.

39
In fact, and in order to promote collective actions, Article 37(d) of Royal Legislative Decree 1/2007 laid down the right of consumer associations’ to legal aid. Against this background, only some collective cases have made their way to court over the last thirty years, mostly injunctive actions; despite having been legally addressed in Spain, collective redress actions are rare in practice due to their cost and the difficulty involved first, in legally understanding what is needed to proceed with the action, and second, in gathering together group members and evidence and administering enforcement if the action is successful. However, an increase can be observed in recent years as a result of the economic downturn. See, addressing some cases, Carballo Piñeiro, Laura, "La construcción del mercado interior y el recurso colectivo de consumidores", in Esteban de la Rosa, Fernando (ed.), La protección del consumidor en dos espacios de integración: Europa y América. Una perspectiva de Derecho internacional, europeo y comparado, 2015, pp. 1055-1088.

40
See Article 34 of Royal Decree 231/2008.

41
See, among others, Cubillo López, Ignacio J., "El procedimiento para la tutela arbitral de consumidores", in Cubillo López, Ignacio J. (ed.), Cuestiones actuales sobre la protección de los consumidores: tutela penal, civil y arbitral, 2010, p. 292.

42
Because of this limitation, injunctive actions for consumer protection cannot be submitted to consumer arbitration either, inasmuch as they are binding on third parties and this res iudicata and preclusive effect cannot be granted by this type of arbitration.

43
See Article 57 of Royal Decree 231/2008.

44
See Marcos Francisco, Diana, n. 27 above, p. 191.

45
See Article 256(1)(6) LEC.

46
See Marcos Francisco, Diana, n. 27 above, p. 192.

47
See Article 22(1)(c) of the Law on Consumer protection. This law is now included in Royal Legislative Decree 1/2007, whose Title II, Book I, deals with the rights to stand, to counsel and participation, and the legal regime for consumer associations. Chapter II of Title II set up a State Registry of Consumer Associations under the supervision of the Spanish Agency for Consumption, Food Safety and Nutrition (Articles 33-36). To register, an association’s main objective has to be the pursuit of consumer protection (Article 23) and it must not incur in the prohibitions laid down in Article 27, such as not being a for-profit corporation. Further requirements such as the length of time that the association has been operating, the number of stakeholders and activity programmes are included in other pieces of legislation [Article 33(2)].

48
See Marcos Francisco, Diana, n. 27 above, p. 195.

49
It should be noted that CAS involves consumer matters that arise out of trading in Spain, i.e. regardless of the parties’ nationality or domicile, as that there is no other indication in Royal Decree 231/2008. See Cubillo López, Ignacio, n 41 above, p. 290.

50
[2004] OJ L 364/1.

51
Article 24 of Royal Decree 231/2008.

52
See ibid, second paragraph of Article 24. See also the Recommendation regarding the interpretation of Article II, paragraph 2, and Article VII, paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, adopted by the United Nations Commission on International Trade Law at its thirty-ninth session on 7 July 2006.

53
Unfortunately, some professionals and businesses do not honour arbitral awards, despite having publically offered to submit to the system, and Royal Decree 231/2008 does not address this problem; when professionals and businesses take advantage of CAS in this way, consumers are forced to initiate enforcement proceedings. See Pita Ponte, José María, n. 16 above, pp. 22-24. Further criticism concerns the fact that many businesses fail to establish their own claims services because of the existence of CAS. See Richard González, Manuel, n. 17 above, p. 74 and p. 89.

54
Giving rise to an ex post submission agreement, in S.I. Strong’s words, n. 3 above, p. 498.

55
Article 58(2) of Royal Decree 231/2008. The competent board and any other interested persons, such as the representative consumer association requesting for this type of arbitration, have to be notified that this type of arbitration has not been accepted by the professional or business in question.

56
See Marcos Francisco, Diana, n. 27 above, p. 196.

57
See Article 59(1) Royal Decree 231/2008. It is important to note that, in addition to the Official Journal of the Spanish Parliament, the Boletín Oficial del Estado, every autonomous region and province in Spain publishes an Official Journal.

58
See below Section 3.D.

59
Ibid, Article 61.

60
Ibid, Article 60.

61
Raising this issue, see Strong, SI, n. 3 above, at 502-503.

62
The collective action is being handled by the Juzgado de lo Mercantil No. 11, Madrid, juicio verbal No. 471/2010, and involves 15,000 consumers who are represented by the consumer association ADICAE, although the key reason for the delay lies with the 101 defendants.

63
The European Central Bank set the interest rate at which it lent money to commercial banks very low, but Spanish mortgage lenders had not been taking advantage of this, due to what are known as ‘floor clauses’, the minimum interest rates that banks included in their mortgage contracts. This is why many consumers do not want to wait for the judgment on the collective action, because meanwhile they have to comply with the actual terms of the contract, including those whose nullity is being requested. To make the situation even more complicated, the Supreme Court judgment of 2013 ruled that these terms were null and void, but argued that the declaration only had ex nunc effects, i.e. the terms must be removed from contracts, but banks did not have to give back the money already paid on their account. The Supreme Court changed this doctrine in its judgment No 139/2015 of 9 March and clarified that banks do have to give back the money already collected, but only from 9 May 2013.

64
See Request for a preliminary ruling from the Juzgado de lo Mercantil No 9, Barcelona (Spain) lodged on 11 August 2014, Jorge Sales Sinués v Caixabank, S.A. (Case C-381/14). The opinion of Advocate General Szpunar on this case and the case of Yossouf Drame Ba v Catalunya Caixa, S.A. (Case C-385/14) was delivered on 14 January 2016, indicating that ‘the staying, on grounds of civil procedural precedence, of individual actions brought in parallel to a collective action for an injunction pending the delivery of a final judgment concluding the collective proceedings — provided that such a stay is neither mandatory nor automatic, and provided that the consumer concerned is able to dissociate herself from the collective action’ is admissible. Should the CJEU follow this opinion, Spanish legislation ought to be updated to make opt-out rights available.

65
See below Section 3.D.

66
Article 58(2) of the Royal Decree 231/2008.

67
Ibid, Article 59(2).

68
Ibid, Article 49(2).

69
Ibid, Article 48(2) provides settlement agreements with preclusive effects. See Marcos Francisco, Diana, n. 27 above, p. 197.

70
Article 59(3) of Royal Decree 231/2008.

71
Ibid, Article 49. The arbitral tribunal can extend this period for two months, subject to the agreement of the parties to the arbitration.

72
Ibid, Article 62.

73
Highlighting the lack of consumer interest in these proceedings, see Richard González, Manuel, n. 17 above, p. 148.

74
See Domínguez Plata, Jesús, "El arbitraje colectivo", in Esteban de la Rosa, Fernando, and Orozco Pardo, Guillermo (eds.), Mediación y arbitraje de consumo: una perspectiva española, europea y comparada, 2010, p. 161; Gascón Inchausti, Fernando, Tutela judicial de los consumidores y transacciones colectivas, 2010, p. 177; Marín López, Manuel Jesús, n. 3 above, p. 17.

75
See Section 3.A. above.

76
See Strong, SI, "From Class to Collective: The De-Americanization of Class Arbitration", Arbitration International, 26, 2010, pp. 524-525.

77
This topic has been thoroughly studied by ibid; Strong, S. I., "The Sounds of Silence: Are U.S. Arbitrators Creating Internationally Enforceable Awards When Ordering Class Arbitration in Cases of Contractual Silence or Ambiguity?", Michigan Journal of International Law, 30, 2009, p. 1017, available at http://ssrn.com/abstract=1359353.

78
See Section 3.B. above.

79
See Strong, S. I., n. 76 above, pp. 528-547.

80
See Nagareda, Richard A., "Administering Adequacy in Class Representation", Texas Law Review, 82, 2003, pp. 324-330.

81
See Article 39(2) of Royal Decree 231/2008.

82
See Marcos Francisco, Diana, above n. 27, p. 199.

83
CAS is a cost-free system provided by the state; however, the parties to arbitration bear the costs of gathering proof at least. These can be particularly high when it comes to collective consumer arbitration, to say nothing of the fact that the representative claimant is acting on behalf of third parties. Royal Decree 231/2008 does not address these issues, as it does not establish any special competence for the arbitration tribunal or the fees payable taking into account the work to be done. Establishing a fund would be a good solution.

84
As the LEC does not tackle this issue, there is nothing in the Spanish legal system to oppose setting up an opt-out system. However, Principles 21 to 24 of the European Commission Recommendation on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law [C(2013) 3539 final] aim to severely curtail the opt-out system. This is to be criticized, though, in as much as the inability to present one’s case can be procedurally supplemented without infringing the right to a fair trial, and the opt-out system already works well in a number of countries.

85
To this end, the representative claimant ought to be entitled to negotiate on behalf of absent group members and the arbitration tribunal’s approval ought to be made dependent on the examination of fraudulent conduct.