Class actions in Ukraine

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Class action is one of the forms of legal proceedings, when a large group of people collectively files a lawsuit against a defendant, with a third person being able to act in interests and on behalf of such a group. Such a claim seeks to protect the public interests, or the rights and interests of a large group of persons with the same claims, and is brought by one or more subjects (representatives of the group) who act in court independently in the name of the entire group and on its behalf. The scientific doctrine reiterates that a class action is a synthesis of two procedural institutions – complicity (without involving all accomplices) and representation (in the absence of formal powers)..

There are two classic models of class (collective) actions in the world. Opt-in is a claim filed in favour of those persons who have declared a violation of the right and expressed a desire to join the claim. Opt-out allows one person to file a claim in favour of all interested parties identified by a certain criterion, for instance, all residents of a city, with the ability of corresponding residents to declare their unwillingness to participate. In other words, opt-in protects those who have joined, and opt-out protects those who have not refused the protection.

Class actions in Ukraine

The institution of class action is a fairly new practice in Ukraine. To date, there is no special law in Ukraine that regulates the procedures for filing class actions and considering them. Certain norms of substantive law allow initiating claims containing class action signs, in particular Art. 21 of the Law of Ukraine «On Environmental Protection», Art. 25 of the Law of Ukraine «On Consumer Protection», Art. 29 of the Law of Ukraine «On Advertising». Such actions are brought by one person – Non-governmental organization (NGO), in favour of and to protect the rights of other persons. The main criterion for filing a class action is the presence of evidence of a violation of the rights of a significant number of people by the same act and/or event. Such actions are considered under the general judicial procedure.

In Ukraine, most lawsuits with the characteristics of class actions are initiated according to the opt-in model and mainly in the field of protecting the environmental rights of citizens. The opt-in model provides for joining all interested members of the group to the action initiator at the time of filing the corresponding action. The legislation does not establish a special procedure and terms for joining persons after commencement of proceedings, does not contain the requirements for the minimum number of affected persons to initiate a class action, nor does it provide for preliminary approval by the court of the presence of a class of such affected persons.

The opt-out model is in the process of forming judicial practice. The possibility of initiating opt-out actions was provided by the Supreme Court, with its recognizing the possibility of filing such actions in the field of protecting an indefinite range of consumer rights (Judgement of the Grand Chamber of the Supreme Court dated March 23th, 2021 in re. No. 367/4695/20, though there are no examples of final resolution of such disputes in Ukraine.

The practice of the Supreme Court became crucial for the formation of the institution of class actions in Ukraine, with its conclusions on the application of legal norms being binding and forming a legal precedent for the judicial practice. The Supreme Court took a comprehensive approach to the interpretation of the above-mentioned legal norms, determining both the possibility of initiating class (collective) actions in Ukraine and their jurisdiction:

• Judgement of the Grand Chamber of the Supreme Court dated December 11th, 2018 in case No. 910/8122/17, which confirmed the possibility of a public environmental organization to file appropriate actions in favour of an indefinite number of persons in defence of the environment-related public rights;
• Judgement of the Civil Court of Cassation as part of the Supreme Court dated March 19th, 2020 in case No. 754/8602/18, which stipulated that a public environmental organization, initiating a class (collective) action in favour of its members for damage caused as a result of violation of environmental legislation, shall act as an independent entity not within the framework of the institution of representation of victims; and hence, it should not provide documents for representation of victims' rights and powers;
• Judgement of the Grand Chamber of the Supreme Court dated June 15th, 2021 in case No. 904/6125/20, hich provides clear answers to questions about the method of commencement, parties and jurisdiction in class (collective) actions for damage caused by violation of environmental legislation: an initiator of such a class claim should be a public environmental organization that acts on its own behalf, but in favour of its members – affected persons, by their joining such an organization; the parties to the case shall be a public environmental organization as a claimant and persons guilty of causing harm as defendants, while the affected persons in whose favour the action is filed are not the participants of such proceedings; such disputes are subject to civil proceedings.

Moreover, the conclusions set out in the reasoning part of the Decision of the Constitutional Court of Ukraine No. 12-RP/2013 dated November 28th, 2013 are important for the development of the institution of class (collective) actions. According thereto, a public organization can protect the non-property and property rights of both its members and other persons who have applied for the protection, only if such powers are provided for in the statutory documents of the public organization and there is a special law granting such a right to a public organization.

Practice of class action proceedings in Ukraine

In Ukraine, the consideration of class actions commenced several years ago, and, therefore, the judicial practice is not as large-scale as in other countries of the world. However, the best practices set by the GRECO Law Company team under the leadership of Pavlo Kuftyryev and the case-law of the Supreme Court formed on the basis of these best practices paved the way for the practical implementation of this institution.

Class actions have been most widespread in the field of ecology, since it was these actions that ushered in the implementation of international experience and the institution of class actions in the Ukrainian judicial system.

Class action from victims of the Vasylkiv tragedy

Prior to the outbreak of the Russian armed aggression, the fire at an oil depot in Vasylkiv was the largest environmental disaster in Ukraine since Chernobyl catastrophe. A two-week-long fire at the oil depot with 14 thousand tons of petroleum products led to the death of 6 people and injury to 15.

In the autumn of 2016, the non-governmental organization «Fund for Overcoming the Consequences of the Vasylkiv tragedy» was registered (hereinafter referred to as the Vasylkiv Fund), under the leadership of a well-known public figure in Ukraine, A.I. Vernyk; during four months, several thousand members joined it to ensure the protection of their rights as victims of this tragedy.

Lawyers of the GRECO Law Company with the lead of Pavlo Kuftyryev provided full legal support for the submission and court hearing of the first class (collective) action in Ukraine, initiated by the Vasylkiv Fund in favour of its 2,225 members, against more than 60 legal entities responsible for conducting business, which led to the Vasylkiv tragedy. The subject of the action was the recovery of non-pecuniary damage caused to residents of Vasylkiv, totalling to UAH 2,700,000,000 (about USD 100,000,000 as of the date of adjudication of the action).

In the summer of 2018, a class (collective) action was filed. After opening of the proceedings, on September 14th, 2018, the Desnianskyi District Court of Kyiv seized all movable and immovable property of the defendants within the amount claimed.

In the autumn of 2020, three years after filing of the action and after hundreds of court hearings, a settlement agreement was reached with some of the defendants, approved by the court's ruling dated 03.11.2020 ex gratia, for a total amount of USD 1 mln. Taking into account the specifics of judicial and enforcement proceedings in Ukraine, a settlement agreement is currently the best option for both parties.

According to the settlement, the victims were paid UAH 22,000,000 (about USD 800,000), which amounted to UAH 10,000 for each person of the more than 2,000 people.

Claims against other defendants who did not participate in the signing of the settlement agreement are pending before the court of first instance.

Class action against the Mykolaiv alumina plant

The non-governmental organization «Stop Sludge» initiated a class (collective) action in favour of its 1,279 members against Mykolaiv Alumina Refinery LLC (hereinafter referred to as MAR) for non-pecuniary damage caused to members of the organization as a result of illegal burial of red sludge and its harmful impact on the environment and human life.

Legal support for this class action is also provided by lawyers of the GRECO Law Company.

A class (collective) action was brought against the largest pollutant and producer of hazardous waste in the South of Ukraine. Plant's economic activities result in generating of toxic waste – red sludge, which is buried in two MAR’s sludge storage facilities. The total volume of red sludge declared by the plant is more than 47 million tons, while the actual volume of waste disposal has never been controlled by any relevant authority of Ukraine. Waste storage facilities do not provide safe disposal of red sludge waste, and, therefore, dust storms occur that pollute the environment at a distance of tens of kilometres from these sludge storage facilities. It was within the area of MAR’s activities that the dynamics of a sharp (up to 300%) increase in diseases and deaths from cancer was observed, despite the dynamics of a decrease in these indicators in other districts of the Mykolaiv region, and in Ukraine as a whole.

With its decision dated May 26th, 2021, the Zavodskyi District Court of the city of Mykolaiv satisfied the claim and awarded from MAR’s in favor of the non-governmental organization «Stop Sludge» UAH 9,800,000,000 (over USD 300,000,000) in compensation for non-pecuniary damage caused by violation of environmental legislation to 1,279 members of the organization, with UAH 7,200,000 (over USD 240,000) for each member of the organization.

With its judgement dated December 14th, 2021, the Mykolaiv Court of Appeal reversed the decision of the court of first-instance. The case is currently pending before the Supreme Court.

Conclusions of the supreme court on class actions

Presentation of the Supreme Court’s review on the practice of class actions in Ukraine with the topic «Search for the Optimal Construction of Protection of a Certain Circle of Persons (Representative Actions)» was delivered during the Round Table «Prospects for Implementing Class Actions in Ukraine», held online on January 27th, 2023. The Round Table was initiated by EU Project Pravo-Justice and the Association of Advocates of Ukraine (hereinafter referred to as the AAU).

The judge of the Civil Court of Cassation as part of the Supreme Court Vasyl Krat, delivering his report «Search for the Optimal Construction of Protection of a Certain Circle of Persons (Representative Actions)», noted that «The construction of a class action is more inherent in the Anglo-Saxon legal tradition, so the attempts to introduce its application in the continental tradition sometimes encounter some incomprehension and misunderstanding. At the same time, according to the speaker, the European approach consists in expanding the scope of class actions beyond the regulation of consumer protection, but taking into account the legal tradition of individual member states. The application of the institution of class action can be effective in terms of reducing the burden on the judicial system. The existing private legal tools already allow using the institution of class actions of individuals, saving time, and providing rationalization of procedure».

The presented report on the current judicial practice of the Supreme Court, in particular, regarding the consideration of class actions filed by public organizations in the interests of their members, demonstrates the judgements of the Supreme Court, resolving the issues of consideration of class actions, including two practical cases accompanied by the GRECO Law Company: case No. 754/8602/18 (action of the NGO «Fund for Overcoming the Consequences of the Vasylkiv Tragedy») and case No. 487/6970/20 (action of the NGO «Stop Sludge»).

Legislative initiatives

The Ukrainian regulatory environment provides with all opportunities for filing a class action, but to bring them to a qualitatively new level, legislative changes are needed.

Borys Malyshev, the partner of the Greco Law Company, following the initiative of the Greco Law Company and under the auspices of the managing partner Pavlo Kuftyryev, co-authored the only draft law on class actions in the entire history of Ukraine’s independence – the draft Law of Ukraine «On Amendments to Certain Legislative Acts of Ukraine Concerning Class Actions on Consumer Protection and Protection of the Right to a Safe Environment for Life and Health» (draft law No. 10292).

Personally, B.V. Malyshev noted that after a significant update of the content of the Civil Procedure Code of Ukraine that happened two years ago, the issue of introducing a special procedure for considering cases on protection of the rights and legitimate interests of numerous groups of people remained open.

The draft law stipulates that an individual (a claimant-initiator) or a public organization shall have the right to apply to the court with a claim for protection of the rights and interests of a group of persons without their procedural participation in the proceedings (class action).

A class action may be filed exclusively for the protection of consumer rights, the right to a safe environment for life and health, and contain claims to stop the violation of rights, as well as to compensate for non-pecuniary and pecuniary damages. A class action is not a form of the joinder of parties.

An action is considered a class one if:

1. At least 25 individuals with identical claims based on similar grounds to one or more defendants joined the action of a claimant-initiator;
2. A public organization, in cases established by law, appealed to the court with an action, which was joined by at least 25 persons who are its members, having the same type of claims based on similar grounds, to one or more defendants.

A claimant-initiator may file a class action with the possibility of additional joining of persons belonging to the class, whose rights and legitimate interests are protected by the claim (open class action), or without such a possibility.

Without a power of attorney, the claimant-initiator represents the interests of the group members on the basis of applications of individuals for joining (on additional joining) the class action or a decision of the majority of the group members, which is drawn up in the minutes of the meeting and submitted to the court with the signatures of those who voted for such a decision.

The draft defines the specifics of all stages of the class action proceedings, starting with the commencement of proceedings and ending with the issuance of a judgement in the case. If the claim is satisfied, the awarded payments shall be distributed in accordance with preliminary agreements or a concluded agreement, or under the terms published in the announcement of the commencement of proceedings on an open class action.

In addition, as stated in the explanatory note to the draft law No. 10292, the institution of class action allows the public to control environmentally hazardous enterprises, and even control the quality of goods and services, through the use of court action tools. A class action in a developed democratic society can partially replace the functioning of numerous bureaucratic controlling state agencies, since, in this case, monitoring of the state of compliance with legislation in the field of consumer and environmental rights protection is carried out by participants of the relevant legal relations.

The adoption of such a law can significantly bring the legislation of Ukraine closer to the legal systems of such EU countries as Sweden, Portugal, Spain, Finland, Norway, Denmark, France, where the institution of class (collective) and representative actions has been successfully existing for a long time. Declaring its European aspirations, Ukraine should adopt the best judicial practices and procedural patterns in its own legal framework and, thereby, approach global trends in the development of justice.

If successful in the future, class action lawsuits in Ukraine will perform several functions, namely: provide fair compensation to victims; encourage polluters to introduce modern technologies, and manufacturers - to avoid unfair business practices that violate consumer rights; drive Ukrainian legislation to adopt drastic and significant changes. All this will have a positive impact on the health and well-being of the population of Ukraine as a whole, as well as on the environment, bringing Ukraine closer to the full implementation of the concept of sustainable development.

The role of Pavlo Kuftyryev in the development of the institution of class actions in Ukraine

As recalls Oleh Vernyk, the chairman of the public organization «Fund for Overcoming the Consequences of the Vasylkiv Tragedy» founded after the Vasylkiv tragedy, which filed the first class (collective) action in Ukraine:

“At one time, Pavlo Kuftyryev, my student and good friend, a very creative lawyer with a comprehensive vision of solving any problem, told me about the idea of introducing the institution of class action in Ukraine. And it was he who actively helped me, and advised me on legal issues, and also suggested the idea of filing a class action on the basis of Article 21 of the Law of Ukraine «On Environmental Protection».”

Pavlo Kuftyryev came up with the idea of filing class actions in Ukraine as a result of a deep study of the legislation and judicial practice of foreign countries, such as the USA, Australia, and Sweden. For the first time, legislative acts on class actions of these countries were translated and later extrapolated into Ukrainian practice under the guidance and general editorship of Pavlo Kuftyryev.

“In a situation where the rights of many citizens have been violated or the circle of victims cannot be immediately determined, class actions are the only efficient way to protect rights. Class action lawsuits in Ukraine are a way to unite people's efforts to tackle common problems.”

— according to Pavlo Kuftyryev

Thus, thanks to the efforts of Pavlo Kuftyryev and the GRECO Law Company team, the first class action from the public organization “Fund for Overcoming the Consequences of the Vasylkiv Tragedy” appeared in Ukrainian judicial practice, with a settlement agreement for USD 1 million, and after that, another major action from the public organization “Stop Sludge” for UAH 9,208,800,000, as well as, to be most importantly, the relevant judicial practice was established, based on which other persons can bring similar actions.

In addition, Pavlo Kuftyryev continues to actively work on the development of the institution of class actions in Ukraine, delivering and presenting relevant reports at conferences, seminars, round tables and discussion forums:

• Participation in the International Scientific and Practical Conference «Food and Environmental Security in the War and Post-War Period: Legal Challenges for Ukraine and the World», delivering a report on the topic «Ensuring Environmental Safety by Filing Environmental Class Actions»;
• Participation in the Conference «Compensation for Damage Caused as a Result of War» with a report on the topic «Mechanisms of Compensation for Damages and International Experience»;
• Participation in the Scientific and Practical Conference «Topical Issues of Forensic Psychological Expertise in Cases on Claims for Non-Pecuniary Damage» with a report on the topic «Problematic Aspects of Determining the Amount of Non-Pecuniary Damage when Considering Class Actions»;
• Online discussion. Compensation Front: the People of Ukraine vs Putin's Russia;
• A Lecture on his own experience of the first precedent of a successful environmental class action in Ukraine delivered for representatives of the faculty and academic staff, departments of environmental, land, and agricultural law of leading Ukrainian universities, and postgraduates;
• Participation in the V Kharkiv International Legal Discussion Forum «Ecological and Legal Aspects of Sustainable Development» with a report on the topic: «The First Precedent of an Environmental Class Action in Ukraine: Legal Reasoning and Prospects for the Development of Class Actions»;
• Participation in the IV Legal Discussion Forum of the Association of Advocates of Ukraine with a report on the topic «Class Action as an Effective Mechanism for Protecting Environmental Rights»;
• Participation in the V Legal Discussion Forum of the Association of Advocates of Ukraine as a moderator (Session II «Litigation under Martial Law»)

“The prospect of introducing class action institutions into the procedural legislation of Ukraine is not a theoretical whim of the academic community or the active public, in order to adapt the ‘fancy’ institution of Anglo-American law, but it directly follows from the trends of development of European regulation, which is already real even for those EU member states whose legal system and legal opinion recently categorically denied the expediency of this method of implementing the right to access justice.”

— according to Pavlo Kuftyryev

As for the areas of application of class actions, according to Pavlo Kuftyryev, such actions can be used in any area where there is a question about the rights of a large number or an indefinite circle of citizens: in cases of consumer protection, when it comes to food, medicines, medical supplies, for consumers of financial services, depositors or borrowers of banks and other financial institutions, investors in construction or just residents of blocks of flats, communities and individual groups of the population, shareholders, victims and temporarily displaced persons, refugees as a result of armed aggression of the Russian federation, etc.

Thus, despite the fact that the institution of class actions in Ukraine is at the stage of development, the existence of already established judicial practice is sufficient to implement this tool to protect citizens' rights even without a special law and regulation in the procedural legislation.

See also

• Incarceration in Ukraine
• Constitution of Ukraine
• Law enforcement in Ukraine
• Ministry of Justice (Ukraine)
• Judicial system of Ukraine

External links

• Mykolaiv Alumina Plant. Official website
• Oleh Vernyk. NGO «Fund for Overcoming the Consequences of the Vasylkiv Tragedy. Official website»
• Borys Malyshev. GRECO Law Company
• GRECO Law Company. Official website
• Biography of P.V. Kuftyryev
• NGO «STOP SLUDGE». Official website

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