Class actions in Argentina – recent cases linked to private health plans

Juan Edgardo Pringles
Noetinger & Armando, Buenos Aires

Argentina doesn’t have any particular legislation related to class actions, although isolated clauses in the Consumer Act and the Environment Act refer to them. In spite of this, Argentina is flooded with class actions, especially focused on consumer law matters. Businesses in many sectors have been sued, such as banks, credit card issuers, retailers, supermarkets, insurance companies, airlines companies, health companies and so on.

As a consequence of the absence of particular legislation that guides class actions, the Supreme Court of Justice urged the Argentinian parliament to legislate for an adequate process to give certainty to the parties participating in them.

Meanwhile, the Supreme Court announced its intention to create some guides or incentives to manage class actions until the parliament regulates a formal law – although this hasn’t occurred yet.

Since the end of 2023, Argentina has been living a process of economic change. One of the most important recent developments in Argentina’s economy is the end of the strict policy of price controls maintained by the former administration. Healthcare is a sector that has been drastically affected by such price controls. Under the old system, any proposed increase in prices had to be authorised by the government before it could be implemented.

As permitted by decree number 70/2023 (the ‘Decree’), and based on its provisions, health companies have significantly increased the costs of monthly payment plans, at a rate exceeding Argentina’s monthly inflation rate (which is also very high). Charges have increased by over 300 per cent in less than four months, whilst salaries have not increased at the same rate.

In Argentina, private medical plans are used by many people and are very regulated. As a matter of health, it is considered a very important service for citizens, especially for senior citizens.

That’s why the increase of the medical plan rates was a target of the consumers’ associations and the government, which – ironically – was obliged to analyse measures to control the exorbitant increase of the rates.

Focusing on class actions, health companies were sued in three federal courts by the state and by two individual clients who were supported by a consumer association. The lawsuits aimed to:

• cease the unlimited increase of rates;

• limit the increase of fees to the official inflation rate published monthly; and

• to reimburse the clients an amount equivalent to the excess between the inflation rate and the fees they paid.

The state reported the companies based on potential antitrust conduct which violates the Antitrust Act.

In the framework of this lawsuit, the state obtained a preventative measure that ordered the companies to restructure the fees in advance, according to the inflation rate published by the national organisation in charge of statistics.

Recently, health companies and the state reached a settlement that allows clients to receive the excess of fees that were paid in concept of fees, plus a very low interest rate.

The settlement does not satisfy the requirements demanded by the Consumer Act (for example, the intervention of the prosecutor is absent and doesn’t establish the possibility for clients to exercise the opt in/out option), but at least it is an advantage for citizens.

The other two lawsuits were filed against only two health companies, and their effects will also include all the clients of those companies. In these cases, parties have challenged the constitutional validity of the decree.

These two lawsuits are still open, while in Argentina practitioners are still waiting for a specific regulation for class actions.