Class Action Lawsuits in Mexico

August 17, 2010
Class Action Lawsuits in Mexico

The Official Journal of the Federation published on July 29, 2010 an amendment to article 17 of the Constitution of the UnitedMexican States to create in Mexico the legal concept of class action lawsuits, i.e. lawsuits brought by a group of people that meet auniform set of conditions arising from the same cause that resulted in losses or claims. The constitutional reform limits class actionlawsuits to proceedings regarding federal law, such as those relating to consumers, users of financial services and matters concerningthe environment, and grants federal judges exclusive jurisdiction to hear such cases. It is also important to note that Mexico’sCongress will have one year to issue secondary legislation on how to regulate class action lawsuits. Rules on class actions are nothingnew, since countries like the United States, Spain, Colombia, Brazil, Argentina and Chile, among others, already have rules on thistype of collective actions at a constitutional and secondary level of legislation. With the constitutional amendment to Article 17, thescope of a ruling on class actions lawsuits would be valid for a group of people who are in an identical situation to that of any plaintiffwho has filed a lawsuit against an institution or entity. Additionally, this amendment will compensate victims that sustain damagesresulting from monopolies, unfair claims, abuse and fraud and other causes of action that give rise to a class action lawsuit. It isestimated that the success of this legal concept will depend largely on secondary legislation approved by Mexico’s Congress. Up untilthis constitutional reform, the only class action available at the federal level could be filed only by the Federal Office of ConsumerProtection (“Procuraduría Federal de Protección al Consumidor” or “PROFECO”) against companies that defrauded customers, but itseffectiveness and scope was limited and was subject to the willingness of the authority to prosecute any given case. Last May,Mexico’s Supreme Court ruled for the first time on class action lawsuits brought by PROFECO, , and held that the benefits of ajudgment from such lawsuits must accrue to all affected consumers, not just those who joined in the lawsuit.

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