City of Buenos Aires Gets New Procedural Code Governing Litigation in Consumer Relations

In the #214 edition of Marval News, we talked about certain consumer proceedings that could be filed before the Consumer Courts of the Autonomous City of Buenos Aires. Until the transfer of the Consumer Courts from the Federal Executive to the Autonomous City of Buenos Aires is complete, judges in City Tax Trial Courts will decide consumer claims. In that publication, we noticed two pending matters:

 

• It was unclear what procedure would be followed.

 

• It had not been established whether the jurisdiction of the Consumer Court System of the Autonomous City of Buenos Aires would be limited by the original restrictions in Law No. 26,993 that sets forth the conflict resolution system for consumer relations.

 

However, on March 11, the legislature of the Autonomous City of Buenos Aires passed the Code of Consumer Relations Procedure with 266 articles, which addresses those pending matters. Below is a brief review of the proposed changes.

 

Protective Principles. The guiding principles are consumer protection, sustainable consumption, full compensation, no formal requirements for the consumer, celerity, immediacy, concentration, procedural economy, orality, and gratuity. Effective judicial protection is proposed with special strictness for very vulnerable consumers.

 

Standing to Sue. The Code stipulates who has standing to sue or when the Prosecutor’s Office has mandatory intervention powers in individual or collective consumer procedures. It also grants extensive standing to sue to NGOs, the Enforcement Authority, the Ombudsman, and the Public Services Regulatory Entity. Representation of the parties can be unified under grounds of compatibility or similar criteria, as well as invoked rights or defenses.

 

Pretrial Conciliation. When filing the complaint, the plaintiff must demonstrate compliance with the prior conciliation phase. The system admits, among other forms of proof, the minutes issued by the consumer protection enforcement authority of the Autonomous City of Buenos Aires or the Mandatory Consumer Relationships Conciliation Service (COPREC) with no cap on amounts. There is no conciliation phase for collective claims.

 

Electronic Address. The electronic addresses provided by the parties in the conciliatory phase will persist throughout the trial phase. In the absence of that address, the complaint may be served at the address declared before the tax authority or before the corresponding register of legal persons.

 

In forma pauperis. The right to proceed in forma pauperis involves exemptions from court taxes and processing costs and fees. In claims involving amounts over 100 UMA (which at the time of this publication is ARS 512,000), the defendant may submit proof per motion practice that the plaintiff has sufficient financial resources to pay the expenses associated with the trial. If the motion is admitted, the consumer could lose the right to proceed in forma pauperis. These motions are called “solvency motions” at the local level and cannot be sought against NGOs that advocate for consumer rights.

 

Constructive Abandonment for Failure to Prosecute. Constructive abandonment for failure to prosecute does not apply; and judges have a duty prosecute the case.

 

 Individual Cases. Two kinds of procedures are stipulated.

 

• Simplified or ordinary: Terms in this kind of procedure are shorter and evidence is submitted at the evidentiary hearing, at which time the case is decided and the publication of the grounds of the decision may be deferred. Preliminary motions are admitted, but counterclaims are not heard in these proceedings.

 

• Extended: Terms are longer and both counterclaims and preliminary motions are heard. This procedure can have two hearings: a preliminary hearing mainly to settle on the facts and decide what evidence and preliminary motions are admissible; and an evidentiary hearing with the aforementioned characteristics but with the difference that the judgment may be handed down within the 30 days following the hearing or at the hearing itself. In the event of the latter, the publication of the grounds for the appeal may be deferred for 10 days. The judgement is notified sua sponte 3 days after filing the grounds for the decision. The defendant may request the application of the extended procedure on account of the complexity of the issue at law. That motion suspends the term to file the answer to the complaint and the judge must hand down a decision within the following two days.

 

Collective Claims

 

• Admissibility requirements are regulated, including numerosity, commonality, adequate representation, and whether individual actions are not more suitable instead.

 

• Collective claims of homogeneous individual rights (class actions) are differentiated from those of rights with a collective impact (collective or diffuse).

 

• As a matter of principle, compensation must be awarded to the members of the class that suffered the harm in question. In certain cases, courts may order the creation of a reparation fund that will be administered and managed by one or more class representatives.

 

• In collective claims for diffuse or collective interests, compensation will be used to set up a special fund for the promotion of public consumer policies.

 

Judicial Management Office. The Office will be in charge of assisting the courts and making routine case decisions in accordance with applicable regulations. All decisions must be notified electronically.

 

Agreement. A 50% discount on court tax is granted as an incentive in cases in which an agreement is reached before the trial hearing.

 

Recusal. Judges cannot recuse themselves without cause.

 

Provisional Remedies. Motions for provisional remedies are decided and enforced ex parte. These remedies can be challenged for reconsideration or appeal. Bond for costs offered by the consumer is deemed sufficient security for the damage.

 

Admissions by the Parties. Admissions by the parties are not admissible in any case. However, the court and the parties may freely examine witnesses as the case is being heard.

 

Documentary Evidence. Documentation on any format other than paper may be admitted as long as its authenticity and authorship can be determined.

 

Witness Testimony. In the ordinary procedure, only two witnesses can be admitted, and in the extended procedure, five. The burden to summons a witness falls on the party who requested that witness. The judge and the parties may freely question witnesses.

 

Expert Evidence. Expert reports must be submitted before the trial hearing. Requests for clarifications and challenges to the expert report will be made at the hearing and the expert witness is required to be there.

 

Closing Arguments. The parties must make their closing arguments orally at the trial hearing. Closing arguments cannot be filed in writing.

 

Behavior of the Parties. The behavior of the parties during the proceedings may be used against them when assessing the evidence and admissibility of the claims.

 

Availability to the Public. Judgments must be published.

 

Appeal. A simplified procedure is available (when cases involve 10 UMA or less, which converts to ARS 51,210 to date). The grounds of the appeal and its answer will be made orally in a hearing before the Court of Appeals. Solve et repete will not proceed in the appeal processes.

 

Special Procedures.

 

• Declaratory action.

 

• Preventive action. Expected damage. The court may order appropriate security measures to prevent damage or stop existing damage from continuing or worsening. The court will hold a hearing and may order measures to cease any harm.

 

• Action to stop unlawful advertising. The court may order sua sponte, as a preliminary measure, and without a hearing with the defendant, the cessation of unlawful advertising.

 

Punitive Damages. Punitive damages should not be quantified when initiating the complaint, so that they can be ascertained on the basis of the exhibited evidence.

The Code will be in force as of April 19, 2021. Until consumer venues are created, the provisions contained in the Code will be enforced by the Administrative and Tax Trial Courts of the Autonomous City of Buenos Aires, when appropriate.

Its interim provisions stipulate that docketed cases or complaints filed before the Code enters into force will continue to be tried in their pending venues and courts.

However, this new law’s recitals stipulate that the courts of the Autonomous City of Buenos Aires have jurisdiction in consumer matters “without procedural distinctions based on claimed amounts.” This provision does not appear to be consistent with Law No. 26,993 governing the jurisdiction of small claims courts (up to 55 minimum wages). We will have to wait for the applicable venues to be created to see how this plays out.