Mexican consumers can now fight the power

The Congress of Mexico publishes new law allowing customers to bring class-action suits

The spirit of Pancho Villa apparently rides on as Mexican consumers will soon have the ability to wage class action war on the forces of tyrannical corporate oppression.

The General Congress of the United Mexican States enacted the first law allowing consumers to bring class action suits in April, but the law was finally published this week in the country’s official government publication, the Official Gazette of the Federation. The law is slated to take effect March 1, 2012.

The effects of the new legislation will have widespread implications for companies across numerous sectors. The law will allow three types of class action claims: consumer, financial and environmental, and will be divided into three categories dependent upon the types of rights as defined by legal doctrine in civil law countries.

The legislation, however, includes broadly defined requirements that must be satisfied in order for a claim to proceed as a class action, according to a release from Chadbourne & Parke, “including that the prospective class members must be in the same common factual or legal circumstances, and that a clear relationship exist between the initiated action and the damage to the class. In addition, in order to obtain the benefit of the statute’s provisions, the subject matter of the claim must be proper for class-wide disposition.”

Another tenet is that the law includes a loser pays provision, and holds that attorney’s fees will be subject to caps in an effort to avoid abuse.

For more insight into the new legislation, read coverage in the Wall Street Journal and analysis from Shook, Hardy & Bacon.

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