Class actions and Georgian group protection
The class action, as a concept, comes from United States law: there, a single representative stands for thousands of injured consumers in one case. Georgian law knows no such procedural form — but the Law of Georgia on Protection of Consumer Rights creates functional analogues: the participation of non-commercial legal persons where the rights of a group of consumers are violated, the right to apply to the Agency or the sector regulator, and the voidness of unfair standard terms. This page explains what can be done for group interests under Articles 22, 28, 35 and 37 of that law.
Representation of a group interest
Under Article 37, non-commercial (non-profit) legal persons are entitled to participate in the protection of consumer rights, including the development and implementation of protection policy. Especially important is subparagraph 'a' of that article: where the rights of a group of consumers established by the law are violated, such a person takes part in preparing the relevant statement — the provision that stands closest to a class action.
Under the same article, non-commercial persons cooperate with business associations and state organs to defend the rights of groups of consumers, facilitate the resolution of disputes through mediation, and participate in information campaigns and educational programmes — group protection is thus realised through representative organisations.
A special rule concerns sector regulators: certain rules laid down in separate articles of the law do not extend to them, and in exercising the competence they act under procedures they themselves establish — the form of application and the manner of examination therefore differ by sector.
Application to the Agency and to court
Under the first paragraph of Article 28, the consumer may apply, regarding a violation of the law, to the public-law legal person — the Georgian Competition and Consumer Protection Agency — or to the sector regulator. The second paragraph of the same article states clearly that this right does not deprive the consumer of the right to apply to a court or to arbitration, or to resolve the dispute through mediation. The response to a group violation is thus twofold — administrative and judicial.
An Agency decision is appealed to court within 30 calendar days of its delivery to the trader (Article 35); and the appeal of a decision establishing a violation does not deprive the Agency of the power to impose the corresponding fine on the trader.
Voidness of unfair standard terms
The strongest instrument of group protection is Article 22: an unfair standard term of a contract is void, despite its presence in the contract, where it contradicts the principles of trust and good faith and causes an unjustified imbalance of rights and obligations to the consumer’s detriment, including through its vagueness. The mere quality of the subject of the contract or its adequacy against the counter-performance is not regarded as unfairness. In assessing unfairness, the subject of the contract, the circumstances existing at its conclusion that conditioned the presence of the term, and the other terms of the contract are taken into account; the essence of the main subject and the adequacy of the price do not enter this assessment. This protection extends to every consumer who concluded a contract on the same term — each of them defends himself relying on the same provision.
The article also lists void terms: clauses excluding liability for death or injury to health; unfairly limiting the consumer's claims; unilateral rights for the trader; obliging the consumer to pay more than the damage; unilateral amendment; and restrictions of legal protection — including binding the consumer to an arbitration not regulated by Georgian legislation. Also void is a term that binds the consumer to conditions he had no real opportunity to familiarize himself with before concluding the contract; a term entitling the trader to determine the price at the moment of delivery or to raise it significantly; a term letting the trader alone interpret whether the goods conform to the contract; and a term obliging the consumer to perform regardless of the trader’s own performance. The voidness of one term does not invalidate the rest of the contract unless the term was essential.
Frequently Asked Questions
Below we answer the key questions about group protection.
Does a class action exist in Georgia?
Not under that name; group interests are defended through the participation of non-commercial persons, applications to the Agency, and the voidness of standard terms.
Who prepares the group's statement?
Where the rights of a group of consumers are violated — an authorised non-commercial legal person, under Article 37.
Can one still go to court after the Agency?
Yes — applying to the Agency does not limit the right to apply to court or arbitration, or to use mediation.
Within what period is an Agency decision appealed?
Within 30 calendar days of its delivery to the trader, in the manner established by Georgian legislation.
What happens to the contract without the void term?
It survives — the removal of the void term does not invalidate the remainder, unless the term was essential.
How We Help on Legal.ge
The Legal.ge team assesses whether the voidness of Article 22 applies to your contract, prepares statements to the Agency, and takes group violations to court.
If the same term injures many consumers, write to us on Legal.ge — we will build an individual and group defence plan within the law.