The Georgian Model of Collective Consumer Protection
The idea of consumer class actions is often associated with the American court model, where a single lawsuit protects an entire class of persons. The Georgian law on consumer rights protection chooses a different path: it establishes administrative collective redress for a violation of the rights of a group of consumers — through a decision of the Competition and Consumer Protection Agency of Georgia that addresses the whole group and obliges the trader to restore the violated right and to cease the prohibited practice. This law does not establish an American-style court class action procedure; a separate court group-litigation regime is not part of the source of this page and is not discussed here. At the same time, applying to the Agency does not deprive the consumer of the right to apply to a court or arbitration or to resolve the dispute through mediation — these routes do not exclude one another.
Routes of Application and the Competence of the Agency
A consumer may apply, concerning a violation of the law, to the Competition and Consumer Protection Agency of Georgia or to the authorized regulator of the relevant field. The Agency's competence does not extend to the spheres of the National Bank, commercial banks, mortgage-covered bonds, investment funds, the securities market, insurance, electronic communications, broadcasting, and energy and water supply, where protection is ensured by a separate authorized body; an application concerning such a sphere is forwarded to that body and the applicant is informed. It studies facts that have caused or may cause a violation of the rights of a group of consumers, requests information from the applicant and the trader, summons the parties for explanations and appoints an expertise where necessary.
Grounds for Opening a Study and the Role of Organizations
The Agency opens a study if it has information that, as a result of the actions of a specific person or persons, the right of a group of consumers is being or may be violated; the ground is a reasonable assumption that the interests of the group are or may be harmed by the violation. An important role belongs to non-commercial legal persons: they may participate in preparing the application where the rights of a group of consumers are violated, cooperate with business associations and state bodies to defend consumer groups, facilitate mediation and join awareness campaigns.
Deadlines and Procedure of the Study
Within 10 working days of the submission of an application the Agency informs the applicant of its response or of the absence of the grounds. The case is studied within 1 month of the decision to open the study, and considering its significance and complexity the study may be extended by not more than 3 months; the running of the deadlines is suspended when additional information is requested or an expertise is appointed. Within 3 working days of the decision to open the study the Agency informs the trader and grants the trader not less than 5 working days to present a position on the suspected violation. In cases of unfair commercial practice with urgent necessity, the Agency may ask the court to temporarily suspend certain actions of the trader.
The Decision on a Violation of the Rights of a Group of Consumers
As a result of the study the Agency is obliged, within the established deadline, to adopt a decision on confirmation or denial of a violation of the rights of a group of consumers — this is the collective core of the Georgian law. Upon confirmation, the Agency sets the trader a deadline and requires restoration of the violated right and/or cessation of the prohibited practice. The decision is sent to the trader within 3 working days; not later than 5 working days after the expiry of the set deadline the trader must inform the Agency of the measures carried out. The decision must contain the trader's details, a description of the facts, the processed information, the reasoned assessment and the required actions with their deadline; its full text is published on the Agency's website within 3 working days. Before completing the study the Agency may accept the trader's proposed conditional obligations and close the case without assessing the violation; if they are not performed or rest on false information, it reopens the study for up to 1 month.
The Fine and Appeal of the Decision
Where the decision is not performed within the deadline or is performed improperly, the trader is fined; the fine must not exceed 2 percent of annual turnover in the previous financial year and must not be less than 600 lari; where annual turnover cannot be calculated, it is computed from the turnover since founding. A repeated violation within 12 months entails a fine in double the amount of the imposed fine. Failure to provide information to the Agency is fined at 500 lari, and the same act within 1 year of that fine — at 1,000 lari. A fine does not release the trader from performing the decision; it must be paid within 1 month and is transferred to the state budget. The decision of the Agency may be appealed to the court within 30 calendar days of its delivery to the trader, although an appeal against a decision establishing a violation does not deprive the Agency of the right to impose the fine.
How We Help on Legal.ge
On Legal.ge the service is delivered by lawyers specialized in consumer protection. We assess whether your situation raises a group interest or an individual dispute, prepare the application to the Agency or the sector regulator, protect your interests at every stage of the study, and examine the prospects of resolution in court or through mediation.
Contact us through Legal.ge — collective protection begins with the correctly chosen mechanism, and we will help you at every step.