The Irish Government has approved the drafting of legislation, the Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022, in order to transpose the EU directive on Representative Actions for the Protection of the Collective Interests of Consumers, which Ireland is required to transpose into law by 25 December 2022, to come into effect from 25 June 2023.
The legislation will create a new civil litigation mechanism whereby a designated “qualified entity” may act as the claimant party on behalf of consumers in a domestic or cross-border representative action against a trader for the alleged breach of one of the provisions of specified EU and Irish consumer protection law, that harms or may harm the collective interests of consumers. The specified EU and Irish consumer protection law is broad in scope, capturing laws relating to travel, food safety, health, data protection, financial services, prospectuses, energy and telecommunication.
An organisation which represents the collective interests of consumers, provided it meets minimum criteria and standards, may apply to the Minister for Enterprise, Trade and Employment to be designated as a qualified entity, in order to bring a representative action in Ireland or in other EU Member States. A qualified entity may seek injunctive relief and redress measures. In Ireland, representative actions will be brought before the High Court.
Qualified entities may join together on a cross-border basis to bring a single representative action in several Member States.
While there are existing multi-party litigation avenues available in Ireland through for example test cases and representative actions they are narrow in scope and application. This legislation, once enacted, will have broader application and will bring procedural efficiencies and certainty to actions for alleged mass harm of consumers.
The government have sought to distinguish the regime from class action litigation in the US, noting that only certain, non-specified, non-profit entities will be able to take a case. There will also be a number of safeguards within the proposed legislation to protect against frivolous and opportunistic claims, including cost orders, a requirement for transparency on funding, scrutiny of potential conflicts of interest, the dismissal of manifestly unfounded cases and settlements requiring court approval.
We will continue to monitor developments and will provide a further update once the Bill is published.
In the meantime, if you would like to discuss any of the matters discussed herein in more detail, please get in touch with any member of our Litigation, Dispute Resolution and Investigations Group or our Corporate & M&A Group.