short and sweet_eu_2

The Norwegian Supreme Court shall decide whether third-party financing in opt-out class actions is permitted under Norwegian procedural law

| Innsikt

The Alarm Customers' Association's ("Alarmkundeforeningen") claim against the residential alarm companies Sector Alarm and Verisure is now pending before the Norwegian Supreme Court. The Court's appeal committee recently (on 25 November) decided that the Supreme Court should hear the case in full chambers.

The Association’s claim is a torts claim on behalf of approximately 400.000 residential alarm customers against the two major Norwegian alarm companies. Sector and Verisure colluded over eight years and were fined NOK 1,2 billion (120 million euros) by the Norwegian Competition Authority.

The question that the Supreme Court shall decide is whether third-party financing in opt-out class actions can be permitted under the Norwegian Dispute Act. The matter is the first opt-out class action brought in Norway with external financing. Therium funds the class. The case is of principal importance because it has yet to previously be clarified whether third-party financing costs may be deducted from the compensation awarded to the class in this type of action.

The question is of principal importance since opt-out class actions in consumer cases with many affected customers cannot effectively be brought unless the opt-out alternative is permitted because the individual claims are relatively small compared to the vast cost involved in anti-trust litigation.

The case will likely be decided in the first half of 2023. If the Supreme Court rules in favor of the plaintiff, the torts case will proceed in the Oslo City Court.

On 1 July 2021, the Alarm Customers’ Association instigated legal proceedings against Verisure and Sector Alarm before the Oslo City Court. AKF brought the claim to seek compensation for the losses suffered by the residential alarm customers due to the illegal cartel operated by Verisure and Sector from 2011-2017. The NCA issued fines against the alarm companies totaling approximately 120 million euros. The legal basis was Article 53 EEA (corresponding to Article 101 TFEU) and Section 10 of the Competition Act.

Link to the Competition Authority’s coverage: Final judgment in the Verisure case – Konkurransetilsynet