Global Class Actions

Art. 2 of SC Reg 1/2002 sets out the requirements for bringing a class action. One key requirement is the commonality of claims of the class representative and the class members. Beyond commonality of claims, the regulation also requires: (i) commonality facts or events; and (ii) commonality of legal basis — both of which must be substantially the same.

SC Reg 1/2002 does not define what counts as “substantial” commonality when assessing commonality of facts and legal grounds. Legal doctrine suggests that substantial differences may exist, and thus bar a class action, if there is a conflict of interest between the class representative and the class members. In another example, Banjarmasin District Court Decision No. 55/Pdt.G/2022/PN Bjm ruled that disputes over land ownership inherently require individual proof by each plaintiff, thereby rendering the class action lawsuit incapable of being carried out. Without such commonality, the case will fail to meet the formal requirements for a class action.

Class Certification

Under Art. 5(1) of SC Reg 1/2002, every class action must undergo an initial judicial review, or a “certification.” This process determines whether the claim satisfies the requirements under Art. 2. In addition to commonality of claims, facts, and legal grounds, Art. 2 requires that:

1. the class is so numerous that individual or joint lawsuits would be neither effective nor efficient;
2. the class representative demonstrates honesty and commitment to protecting the interests of the class members; and
3. the judge may recommend replacing counsel if the attorney acts against the duty to defend and protect the interests of the class members.

A class action must also satisfy the formal requirements set out under Art. 3 of SC Reg 1/2002, namely that the statement of claim shall at a minimum contain:

1. the complete and clear identity of the class representative;
2. a detailed and specific definition of the class, without the necessity of listing the names of each class member;
3. information concerning class members as necessary in relation to the obligation to provide notification;
4. the statement of facts of the entire class, including both identified and unidentified class members, presented clearly and in detail;
5. a division of the class or subclasses, if the claims are not identical due to differing nature or types of damages;
6. a prayer for relief for damages, set out clearly and in detail, including proposals on the mechanism or procedures for distribution of compensation to all class members, as well as proposals for the establishment of a team or panel to facilitate such distribution

After certification, the judge issues a determination (penetapan) on whether the requirements in Art. 2 and the lawsuit formalities in Art. 3 have been met. If the court finds that the class action mechanism is invalid, the claim will be declared inadmissible and the proceedings will be terminated.

SC Reg 1/2002 adopts an opt-out system for class actions. Under Article 7, once the court has certified the use of the class action mechanism, the class representative must promptly notify all class members. This notice, which requires prior approval from the judge, must include at least, among others:

1. the definition of the class;
2. the consequences of being included as a class member; and
3. the right of individuals within the class definition to opt out.

After the notice is issued, class members are granted a period determined by the judge to declare their withdrawal. Such declarations must be made using the prescribed form. Any individual who formally opts out will not be legally bound by the judgment rendered in the class action.

SC Reg 1/2002 does not, however, provide for an opt-in system, nor does it specify a cut-off date for individuals to register as class members. In practice, this leaves class membership defined primarily by the court-approved class definition and the opt-out declarations made within the prescribed timeframe.

A judgment on the merits in a class action case may be appealed to the relevant High Court at the provincial level. Although SC Reg 1/2002 does not specifically regulate appeals, Art. 9 provides that the Indonesian Civil Procedural Code applies to issues not expressly addressed in the regulation. Accordingly, ordinary appellate remedies are available.

A decision rejecting a class action at the certification stage may also be subject to further legal remedy. While SC Reg 1/2002 is silent on this point, Supreme Court practice indicates otherwise. In several cases, the Supreme Court has granted cassation applications filed by class representatives challenging District Court and High Court rulings that declared class actions inadmissible for failing to meet the requirements under Articles 2 and 3 of SC Reg 1/2002.

By contrast, certification orders that grant class action status are treated differently. Such orders are considered interlocutory decisions—that is, procedural rulings issued before a final judgment on the merits. Under Indonesian procedural law, interlocutory decisions are generally not subject to immediate appeal in order to prevent unnecessary delays in the proceedings. Therefore, any challenge to a certification order that approves class action status may only be raised together with an appeal or cassation against the final judgment once it has been rendered.

SC Reg 1/2002 does not specifically regulate litigation funding. Under Indonesian civil procedure, the initial costs of litigation must be borne by the party filing the lawsuit. Only after a final judgment is issued may the judge order the losing party to reimburse litigation expenses.

Given the absence of regulation under SC Reg 1/2002, litigation funding by a third party to initiate a class action is, in principle, permissible. The regulation does not provide any criteria regarding the propriety of third-party funding — for example, restrictions that would prevent a competitor of the defendant from acting as a funder. However, any third-party involvement must not compromise the class representative’s obligation under Art. 2 of SC Reg 1/2002 to demonstrate honesty and commitment to protecting the interests of the class members, rather than the interests of an external funder. Ultimately, the assessment of whether third-party involvement undermines this requirement is left to the judge’s discretion on a case-by-case basis.