Collective Actions in Mexico: Challenges and Realities

In a global scenario like the current one, in which a large part of the development of economies revolves around the mass purchase and sale of products and services in which various economic actors participate, it becomes imperative that society has at its disposal a legal action that can be taken against possible violations of the rights of a community. Mexico is no exception to the above.

Consequently, since August 30, 2011, the Federal Code of Civil Procedure (“CFPC”) was reformed in our country, to add the regulation of class actions.

Although it may not seem to be a new topic, class actions in Mexico continue to be a procedural mechanism that is little or improperly used. This is largely due to the lack of knowledge of this topic by the majority of our society.

To give a very simple definition to this concept, it could be said that class actions are a legal tool through which a group of people defend their rights against a third party who violates them. One of the most relevant advantages of exercising an action of this type is the reduction of costs and time to obtain a definitive resolution, since the claims of an entire group can be concentrated in a single lawsuit.

Now, it is important to note that the CFPC regulates three different categories of class actions:

• Diffuse collective action: It is indivisible in nature and is exercised to protect the rights of a group of undetermined persons. In this type of collective action, it is not necessary for there to be a legal link between the group and the defendant.

Its purpose is the restoration of things to the state in which they were before the damage, or where appropriate, substitute compliance.which is an alternative way of complying with a sentence– according to the impact on the rights of the community.

• Collective action in the strict sense: It is indivisible in nature and is exercised to protect the rights of a group of determined or determinable persons. In this case, there is a legal link by mandate of law between the group and the defendant.

Its purpose is to repair the damage by carrying out one or more actions (or refraining from carrying them out), and to cover the damages individually to the members of the affected group.

• Homogeneous individual collective action: It is divisible in nature and is exercised to protect individual rights of collective incidence. That is, various individuals grouped together based on common circumstances. In this case, there is a legal link between the collective and the defendant.

Its purpose is to claim the forced fulfillment of a contract or its termination, with its consequences and effects according to the applicable legislation.

On the other hand, it is also relevant to clarify that not anyone can initiate a class action in Mexico. According to the CFPC, only the following can initiate such an action: (i) the Federal Consumer Protection Agency; (ii) the Federal Attorney's Office for Environmental Protection; (iii) the National Commission for the Protection and Defense of Users of Financial Services; (iv) the Federal Economic Competition Commission; (v) the common representative of a community made up of at least thirty members; (vi) any of the non-profit Civil Associations duly authorized by the Federal Judicial Council; and (vii) the Attorney General of the Republic.

The CFPC also establishes that only District Judges can hear class actions. That is, all local court judges are prevented from hearing and processing this type of proceedings.

Having laid the foundations for what Mexican law defines as class actions, their types, who is entitled to initiate them and who is entitled to resolve them, it would seem that there is a path laid out to promote class actions as a way of protecting the rights of a community, but why have class actions in Mexico not yet generated the expected impact?

In the opinion of the author, and as already stated, much of this is due to the general lack of knowledge on the subject. There is a need for greater dissemination of information on what a collective action is, in what cases it is appropriate and the advantages it has –especially for the less favored social groups-.

Likewise, it is necessary for litigants to devote themselves with greater interest to the study and proper exercise of this type of action contemplated in the Mexican legal system. It is not uncommon that, in practice, there are lawsuits where one type of collective action is asserted when in reality it is a different one, or that this type of process is used as a method of pressure by some interested parties in obtaining disproportionate or even clearly inappropriate compensation.

The complexity of exercising collective actions also lies in the thorough analysis that must be carried out when studying a matter of this nature, because as we have already seen, this type of action not only protects collective and diffuse rights, but also individual rights that can be defended more effectively collectively.

Several authors have even criticised the current regulation in Mexico regarding class actions, describing it as limited and unclear. First, it is considered that the grounds for the admissibility of a class action are very limited and several important areas, such as cultural heritage, are left unprotected. Second, it is considered that there are gaps within the procedural regulation that limit access to justice.

The truth is that collective rights change based on changes in social realities, so it will be necessary, in the not too distant future, to carry out a new analysis of the multiplicity of rights of a community that may be affected by a third party and thus, said rights are protected in a more comprehensive and effective way.

It should also be stressed that only practice will allow us to continue identifying areas of opportunity in the legislation on collective actions, and to increase the interpretation of current regulations by both the Circuit Collegiate Courts and the Supreme Court of Justice of the Nation.

For the time being, the new National Code of Civil and Family Procedures, which will soon come into force, does not foresee any substantial changes in this area.