(2 min read)
The Representative Actions for the Protection of the Collective Interests of Consumers Bill 2023 (the "Bill") was passed on 4 July 2023 and will soon be signed into law by the President. Once enacted the legislation will make it possible, in theory at least, to bring class action suits in Ireland for the first time. There has been much discussion and debate around the Bill, particularly in relation to the issue of costs and the funding of these actions. This represents a step forward for consumer protection in Ireland but may also lead to further developments on the law on third-party funding.
Ireland is late in transposing the Representative Action Directive (EU Directive 2020/1828) (the "Directive") into law and in fact is already in receipt of infringement proceedings from the European Commission. On that basis it is expected that the Bill will be signed into law in the short term. You can read our analysis of the key features of the Directive here.
When it comes to litigation funding, Ireland still has the criminal offences of maintenance and champerty but the Directive requires that Member States must ensure that the costs of representative actions do not operate as a bar to these proceedings brought, so how does the State square that circle?
When the Bill was brought before the Seanad for debate on 4 July 2023 Senator Paul Gavan moved an amendment that maintenance and champerty shall not apply to a representative action being brought by a qualified entity. Unsurprisingly Senator Gavan made reference to section 114 of the Courts and Civil Law (Miscellaneous Provisions) Bill 2022 which provides for a carve out to the rule against maintenance and champerty in the context of international commercial arbitrations. That bill has since been enacted and represents a significant shift in the State's position on third party funding.
In response, Deputy Dara Calleary, Minister of State at the Department of Enterprise, Trade and Employment, noted that the issue of whether the rules against maintenance and champerty should be removed in whole or in part is currently under consideration by the Law Reform Commission and the policy review should 'issue shortly'. The Bill was passed without the suggested amendment and the Law Reform Commission's policy review remains keenly anticipated as undoubtedly the issue of funding will have to be addressed in order for the Bill to have teeth.
This legislation marks a positive change for consumers in relation to access to justice but in addition to a question mark over how these actions might be funded, it remains to be seen what entities will actually run them i.e. who will qualify as a "Qualified Entity". The Bill sets out criteria that such entities must satisfy which include being not-for-profit, independent, and having a legitimate interest in protecting consumer interests. Organisations meeting the criteria will have to apply to be designated as a Qualified Entity and such application cannot be made until the organisation has 12 months of public activity in acting in the protection of consumer interests.
