The proposed collective actions law, which is set to be enacted by year-end, seeks to create an effective framework for safeguarding collective consumer interests in Montenegro, as stated by Željko Tomović, a representative of the Ministry of Economic Development.

“This law allows consumers, via accredited organizations, to collectively pursue not only injunctions against unlawful practices but also seek compensation for damages, refunds, price reductions, and other equitable remedies,” Tomović explained to the Mina-business agency.

He indicated that the legislation, developed with assistance from the EU-funded Strategic Legal Advisory Center for Montenegro (PLAC), addresses the limitations of the current legal system where individual claims often prove unprofitable or ineffective due to their low value, procedural complexities, or high costs.

“Moreover, the proposed legislation facilitates the prevention and punishment of systemic violations of consumer rights spanning various sectors — from financial services and energy to telecommunications, tourism, and e-commerce,” Tomović noted.

He elaborated that the implementation of this law promotes access to justice, diminishes market abuse risks, enhances fair competition, and aims for greater legal certainty for all economic participants.

Tomović highlighted that under the new law, collective lawsuits cannot be filed directly by individual citizens; they must be initiated by qualified entities — authorized organizations and associations focused on consumer protection.

“These organizations are required to meet stringent standards of independence, transparency, and active public engagement for at least a year, with their legitimacy subject to case-by-case evaluation through court proceedings,” Tomović stated.

In compensation proceedings, a crucial phase is the “certification” stage where the court verifies whether all legal criteria are satisfied — ranging from shared aspects of the damages to the representativeness of the claimant and the justification for a collective approach.

“Consumers join a collective lawsuit through an opt-in system, meaning they must explicitly express their intention to participate as part of the group seeking compensation. While not formal parties to the case, they can still benefit from the outcome of the judgment or settlement. The law also thoroughly outlines how consumers will be informed about lawsuits and verdicts, ensuring broad information access and participatory engagement,” added Tomović.

When queried about the potential establishment of new bodies to oversee the law’s implementation and assist citizens in asserting their rights, Tomović clarified that the Draft Law does not propose the creation of a new entity. Instead, the Ministry of Economic Development holds the principal role in executing and supervising the law, being responsible for consumer protection.

“The ministry maintains a register of qualified entities and all collective actions, routinely verifies whether authorized parties meet the necessary criteria, and supervises cross-border actions in collaboration with the European Commission (EC),” Tomović remarked.

Additionally, the Ministry guarantees public access to vital information on the status of collective proceedings via a dedicated electronic database.

During the damage payment phase following a verdict, the law mandates the appointment of a collective compensation administrator tasked with managing the payment process seamlessly, verifying claims, and reporting to the court.

“This framework enables the implementation of the law without creating new bodies, relying instead on the existing institutional setup,” Tomović emphasized.

He further explained that the Draft Law specifically addresses dishonest and systemic business practices identified as detrimental to a significant number of consumers.

“This includes misleading advertising, unwarranted fees, unfair contractual terms, and practices. Illustrative cases in Montenegro, such as class actions successfully pursued by the Consumer Protection Center (CEZAP) against banks for charging illegal fees for loan processing and early repayments, highlight that financial services are particularly vulnerable,” Tomović noted.

In addition to the banking sector, telecommunications, energy, tourism services, and e-commerce have also been flagged as high-risk areas.

The new legislation will allow for collective compensation for damages, not merely the cessation of unlawful actions, marking a substantial advancement in legal consumer protection.

Regarding alignment with European legislation, Tomović stated that the Draft Law fully incorporates the provisions of Directive (EU) 2020/1828 on representative actions for the safeguarding of collective consumer interests, thereby fully aligning Montenegro with modern European standards in consumer protection.

“Its enactment is a prerequisite for the preliminary closure of Chapter 28 – Consumer and Health Protection and directly responds to recommendations from the EC expert mission report. Furthermore, the law instills legal certainty in this domain and signals that Montenegro is prepared to offer its citizens a level of protection comparable to that in EU member states,” Tomović proclaimed.

The law is anticipated to be adopted by the end of this year, yet a transitional period of nine months will follow for full implementation, during which requisite bylaws will be established, adaptations made, and IT infrastructure for the public complaints registry developed.

“Certain provisions regarding cross-border collective actions and collaboration with EU institutions will be activated only upon Montenegro’s formal accession to the Union. The law is expected to be fully operational next year,” Tomović concluded.

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