New Class Actions Law Introduces Risk For Companies Doing Business In Mexico

Mexico has recently passed class actions legislation putting certain Mexican businesses on edge. Although the legislation has certain unique provisions, it borrows from other Latin American class actions statutes and those of Mexico's neighbours to the north. To date, class actions have been virtually non-existent in Mexico, therefore this legislation will undoubtedly continue to garner attention as potential plaintiffs and their counsel prepare for its imminent arrival and the Mexican courts deal with this novel area of law.

In 1994, Mexico passed a consumer protection law, providing for limited collective actions in consumer matters, but only gave standing to the Federal Consumer Protection Agency. In practice, the Agency filed only a few claims and class actions were still non-existent in Mexico. After extensive debate, in July 2010 Mexico amended its Constitution to allow class proceedings to be brought by private litigants and to provide the federal courts