Thailand – first verdict in a class action lawsuit

published on October 11, 2018 / reading time approx.: 3 minutes  

Since the Thai Civil Procedure Code has been amended 3 years ago, individuals in Thailand may file class action claims. Companies in Thailand therefore need to adjust to the fact that consumers may assert their claims far more easily than before, considerably increasing the overall litigation risk.

On September 25, 2018,  a major automotive company (A) was sentenced to refund a total of 23 million baht to almost 300 car owners (Case No. Por. Bor. 492/2560, Southern Bangkok Civil Court). The consumers had sued A because they all had the same problems with a certain type of transmission in A's vehicles. This first conviction of a company due to a class action indicates that these new opportunities will certainly be made use of.
 
The case is not unique. A class action initiated by 300 local residents is currently pending against a gold mine operator for alleged pollutant leaks in their area.

Background – What is a class action?

Simply put, a class action allows for a group of plaintiffs who have been injured by acts or omissions of a (legal) person to file a joint claim. As a result, there will only be one lawsuit instead of dozens of individual procedures with an uncertain outcome.

The law defines a class action as “a civil court proceeding where a plaintiff is allowed to sue a defendant both to pursue his interests, as well as the interests of others who constitute a class of people like him.” In this context, a class is a group of individuals with identical rights based on the same issues of fact or law, even if the asserted damages may be different.

What are the risks?

The special litigation risk is that – just like in the USA – injured parties may now more easily assert their rights even if they did not do so previously for reasons of cost or time. The plaintiffs may combine their resources and cases, enjoying considerable advantages in their legal enforcement.

What measures can companies take?

In order to be prepared for this increased litigation risk, existing companies in Thailand should now take a number of measures, while companies that want to establish a business in Thailand should at least also be well aware of this danger. One measure, for instance, is to take the class action risk into account upon selecting the insurance coverage. In addition, companies may be required to review and renew their products, advertisements, contracts and warnings for potential risk factors, as they can no longer rely on not being sued for minor damages or breaches of contract.