21 May New Laws on Class Actions, Debt Collection, and Mortgage Relief
Civil Class Actions Available in Thailand’s Courts of Justice
Thailand’s Civil Procedure Code has been amended to allow class action suits in the Kingdom’s courts, previously not a procedural option in the legal system. The amendment has received royal endorsement and been published in the Royal Gazette. It will become effective on December 4, 2015. The new class action law is based on US class action law and has similar rules. In a class action, a group of individuals or business entities can collectively bring a claim to court, and now in Thailand, groups can now file class action suits for breach of contract and on labor law, consumer protection, and trade competition, among others. Members of a class action suit also have the right to opt out and pursue individual claims. The jurisdiction for a class action case will rest in the court which is empowered to hear an individual case on the same matter. For example, for a class action case on trade protection, the competent court will be the Intellectual Property and International Trade Court. In class action matters, courts will be able to summon expert witnesses and appeals will be limited to matters on judgment debt, not points of law or fact.
Debt Collection Procedure Law
Thailand’s first debt-collection law will become effective in September 2015 and protect debtors from abusive and unfair debt collection practices. Violators will be subject to either 3-5 years in prison or a THB 300,000-500,000 fine, or both. Prohibited practices now include using abusive or libelous language, calling after the permitted time frame for telephone calls, threatening to publicly disclose names or impound assets and salaries, charging excessive fees, and any deceptive practices like using fake documents or posing as a lawyer or court official.
Mortgage Relief Law
An amendment to the guarantee and mortgage law in the Thai Civil & Commercial Code became effective on February 11, 2015. The amendment will help protect guarantors and mortgagors and affect guarantees, suretyships, and third-party mortgages. Limits have been placed on the liability of loan guarantors and guarantor obligations have been reduced. A guarantee must now specify the guarantor’s obligation including amount, description of the debt, and duration. If a guarantor is jointly liable with the borrower, the guarantee is void. Banks must notify a guarantor within 60 days if a borrower is in default and must first try to collect from the defaulting borrower before the guarantor. For any debt restructuring, a lender must inform the guarantor, and the guarantor will not be obliged by the guarantee without consent. For mortgages, a lender can no longer require a mortgagor to provide a guarantee along with the mortgage if the lender has gotten a guarantee from a third party. If a lender does so, the guarantee will be void. Lenders must now give a borrower 60 days’ notice for any enforcement actions.
Disclaimer: All material provided here by Dej-Udom & Associates is for informational purposes only. It does not constitute legal advice from this law firm nor any of its attorneys. It was compiled from multiple sources, and while every effort has been made to verify the material, a country’s laws and regulations can change suddenly with no notice. Before acting on any of the information contained herein, please obtain professional advice from a qualified lawyer in the respective country.