New Class Action Law In Thailand.

 

The Thai Civil Procedure Code has been amended to allow for class action suits to be brought by large groups of plaintiffs for breach of civil wrongs, including breach of tort, breach of contract and breach of labour rights. The amendment is the product of a 14-year class-action amendment consultation process, involving collaboration between Thailand and the United States. The resulting Thai class action law is heavily based on United States class action civil procedure laws.

 

The New Class Action Law

 

Forty-nine new provisions will be incorporated into the Civil Procedure Code enabling class action suits to be brought for wrongful acts and for breach of any right protected under the law. This includes rights under environmental law, consumer protection law, securities and exchange law, competition law as well as labour law.

 

This is a significant development in Thai civil procedure law; it is the first time that plaintiffs in Thailand will have the right to bring civil action in large classes.

 

Proclaimed in the Thai Royal Gazette on 8 April 2015, the amendment will take effect on 4 December 2015.

 

Key Elements Of The New Class Action Law

 

• The amendment defines a ‘class’ to include one or more persons having similar characteristics to each other as against the defendant, where each member of the class possesses the same rights in relation to the same ‘common facts’. A person may fall within a class even if that person suffers a different kind of damage to another member of the class.
• Members of a class will be notified of a class action being initiated through a publication and notice procedure.
• All Thai Courts, except for the District Court, which ordinarily have jurisdiction to hear a claim brought by a single plaintiff, will have jurisdiction to hear a related class action. For example if the class action claim relates to breach of labour rights, the competent court will be the Labour Court as it is empowered with the jurisdiction to hear individual labour law cases.
• A prescription period (limitation period) for class members will stop running when the class action suit is filed, to prevent potential class members from being time-barred.
• Competent courts hearing class actions will have inquisitorial powers to summon qualified persons or experts to testify as witnesses in courts, in the role of an amicus curie.
• Unlike US law on class actions, the amendment only permits sub-division of classes on the ground of differing nature of damages, and not where there are differences within in the class with respect to points of facts or points of law. The explanatory memorandum attached to the amendment provides an example to explain permitted subdivision of classes. The example is a class of plaintiffs who are injured by contaminated wastewater emitted from an industrial plant into a river. The explanatory memorandum explains that subdivision of class members would be permissible as between plaintiffs who suffered injuries as a result of water extraction for agricultural purposes and plaintiffs who suffered injuries from ingesting contaminated drinking water.
• Class members only have a right of appeal in respect of judgement debt, and no right of appeal to the Appeal Court or to the Supreme Court on the grounds of error of law or fact.

 

2. An Extensive Amendment Consultation Process

 

The amendment is the product of a long consultation process, which began in 2001 when the Securities Exchange Commission of Thailand (SEC) submitted to the Office of the Council of State, a draft law on Class Actions for Securities Proceedings (draft law). The draft law proposed to enable the SEC to file a lawsuit on behalf of classes of injured debenture holders. The draft law was heavily based on Rule 23 of the United States Federal Rules of Civil Procedure.

 

The Office of Council of State referred the draft law to the Civil Procedure Code Revision Committee (CPCR) for consideration. The CPCR undertook extensive consultations, and determined that the right of class action suit should not be limited to debenture holders only, and should be extended to enable class actions to be brought in situations of extensive loss as a result of breach of tort, breach of contract or other civil rights protected under the law. The CPCR appointed a Subcommittee to undertake further consultations and draft the text of a broad class action law.

 

The Subcommittee’s consultation and drafting process was supported by USAID, under the ‘Accelerating Economic Recovery in Asia’ program, which enabled dialogue to be established between lawyers in Thailand and lawyers in the United States. These dialogues were further supported by the Kenan Institute Asia and the American Bar Association and the US Embassy in Thailand. Unsurprisingly, the new draft law is heavily based on US class action procedural law.

 

3. The Dawn Of A New Era Of Civil Litigation In Thailand

 

Companies and business operators should be prepared for the potential of increased exposure to litigation after the amendment comes into effect in December 2015.

 

Especially in the context of labour law disputes, Thailand already is an employee friendly jurisdiction and the amendment will likely be received well by labour unions and employee groups. Employers should be cautious as the new amendment takes effect, and ensure that their labour law practices and procedures comply with Thai minimum requirements to avoid the risk of a class action being brought by aggrieved employees.

 

No English translation of the amendment has yet been published. The official Thai language version of the amendment is available here.

 

 

For further information, please contact:

 

Chinnawat Thongpakdee, Partner, Herbert Smith Freehills

chinnawat.thongpakdee@hsf.com

 

Janaki Tampi, Herbert Smith Freehills

janaki.tampi@hsf.com

 

Chotika Voravongsakul

chotika.voravongsakul@hsf.com