Taiwan adopts the civil law system and therefore the legal bases for group actions are stipulated in statutory laws. Below is a brief description of the four types of group actions permitted by the CCP. As can be seen below, the system in Taiwan is different from that in the United States in that Taiwan adopts an opt-in mechanism where the express consent of each de facto claimant to join the lawsuit is required. For the avoidance of confusion, throughout this chapter of this book, we refer to Taiwan’s system as ‘group actions’, rather than ‘class actions’.
Type A - joinder of parties
Article 53 of the CCP provides that two or more persons may be a party to the same lawsuit in certain situations, namely:
- where the rights or obligations that are the claims of the suit are common to them;
- where the rights or obligations that are the claims of the suit are based on the same factual or legal grounds; or
- where the rights or obligations that are the claims of the suit are of the same type and the factual or legal grounds on which the claims are based are also the same type; provided, however, that the domiciles of the defendants must be located in the jurisdiction area of the same court or the suit must be subject to a common court as provided by articles 4 to 19 of the CCP.
Type B - lawsuit brought by appointees
According to article 41 of the CCP, multiple persons having a common interest may appoint one or more persons from among themselves as the appointees to institute a lawsuit on behalf of the appointees and appointers.
If a Type B group action is initiated owing to public nuisance, traffic accidents, product defects or by claimants who have a common interest owing to the same factual grounds, the court may, after obtaining consent from the appointees, or pursuant to the motion of the appointees that the court finds appropriate or application by other persons with a common interest, publish a notice requesting other persons with a common interest to apply to join the suit by specifying the facts, evidence and relief sought within a specified period of time (article 44-2 of the CCP). The persons who come forward and make an application based on the public notice of the court are deemed to have made an appointment under article 41 of the CCP.
Type C - lawsuit brought by an appointed incorporated non-profit association
Pursuant to article 44-1 of the CCP, members of the same incorporated non-profit association who have a common interest, may appoint such association to institute a lawsuit to the extent consistent with the purpose of said association as stated in its charter documents.
Type D - representative lawsuit
Article 44-3 of the CCP provides that, with the approval of the competent authorities and to the extent consistent with the purpose stated in its charter documents, an incorporated non-profit association or foundation may institute a lawsuit against a person who has infringed upon the rights of multiple persons to seek injunctive relief prohibiting specific acts. In order to obtain approval from the competent authorities to initiate a suit under article 44-3, an incorporated non-profit association or foundation must satisfy the following conditions:
- the incorporated non-profit association must have 500 or more members; the value of the registered assets of the foundation must be NT$10 million or higher;
- the initiation of a suit for injunctive relief is consistent with the purpose of the association stipulated in its charter documents and has been approved by its board of directors; and
- at least 20 people are alleged to have been harmed by the defendant’s actions.
In addition to the above, there are rules on group actions for specific areas of laws such as protection of consumers and securities and futures investors.
Consumer Protection Act
Similar to article 44-2 of the CCP, article 54 of the Consumer Protection Act provides that when multiple persons who have suffered damages owing to the same consumer relationship appoint one or more persons to institute a lawsuit pursuant to article 41 of the CCP, the court may, after obtaining the consent of the appointees, publish a notice requesting other victims to join the suit by submitting an application to the court specifying the facts, evidence and relief sought.
Articles 49 and 50 of the Consumer Protection Act provide that a qualified consumer protection organisation may institute a lawsuit in its name after at least 20 consumers who have suffered from the same factual grounds assign their rights to claim to such consumer protection organisation. To be a qualified consumer protection organisation, the organisation must have been established for two years or longer, retained a staff for consumer protection matters and been given a rating of ‘excellence’ in an appraisal by the Executive Yuan. The consumer protection organisation must engage legal counsels for this type of lawsuit. The suit would not be affected if during the proceeding any of the consumers terminate the assignment and as a result the consumer protection organisation receives assignments by fewer than 20 consumers. When a qualified consumer protection organisation institutes a suit based on article 50 of the Consumer Protection Act, the court fees for the portion of the claim in excess of NT$600,000 should be exempted.
Article 53 of the Consumer Protection Act states that a consumer protection officer or qualified consumer protection organisation may petition the court for injunctive relief for a material violation of consumer protection regulations by business operators. Legal representation is also required for a suit brought under article 53 of the Consumer Protection Act. The qualification requirements for the consumer protection organisation are the same as those stated in the preceding paragraph. The plaintiff of this type of lawsuit is exempted from paying court fees.
Securities Investors and Futures Traders Protection Act
With regards to securities investments, according to article 28 of the Securities Investors and Futures Traders Protection Act (SIFTPA), in order to protect public interest, the Securities and Futures Investors Protection Centre, a ‘protection institute’ established under the SIFTPA, may initiate a lawsuit or arbitration in its name after receiving authorisation from 20 or more securities or futures investors who have suffered damage owing to the same cause.
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