INSIGHTS | LITIGATION & DISPUTE RESOLUTION | BY SHANE GRACE
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the “Act”) which was signed into law on 11 July 2023 was commenced by the Minister for Enterprise, Trade and Employment (the “Minister”) on 30 April 2024. This is a significant development as Ireland has, until now, lacked any provision for multi-party actions and reform has long been called for in this area.
Representative Actions
The Act introduces a framework which permits a Qualified Entity to bring a representative action before the High Court where a trader has infringed specified consumer legislation. The specified legislation covers a wide range of areas including consumer products, data protection and privacy, medical devices, and package holidays.
To be designated as a Qualified Entity, an organisation must apply to the Minister and must meet certain criteria including that:
- It must be a legal person or public body able to demonstrate 12 months of actual public activity in the protection of consumer interests;
- It must have a legitimate interest in protecting consumers;
- It must be a not-for profit organisation;
- It must be solvent; and
- It must be independent and must permit its compliance, source of funding and statutory purpose to be made publicly available.
Once designated as such, a Qualified Entity is entitled to bring a representative action before the High Court seeking:
- Redress such as compensation, reimbursement, repair, or replacement;
- Injunctive relief seeking to stop a trader from continuing to engage in a prohibited practice; or
- Both redress and injunctive relief.
Representative action can be brought against “traders” which the Act defines broadly as any natural or legal person, whether privately or publicly owned, that acts for purposes relating to their trade, business, craft or profession.
Under the Act, a consumer wishing to be represented by a Qualified Entity in a representative action must opt-in to that representative action. The consumer must apply to the Qualified Entity and under regulations made by the Minister, the Qualified Entity may charge a maximum fee of €25.00 to be represented by it. Once admitted to a Qualified Entity, the consumer will be bound by the outcome of the representative action.
In addition to commencing the Act, the Minister has also published the relevant forms under the Act including applications to be designated as a Qualified Entity and applications to be admitted to a Qualified Entity.
Costs
Under the Act, consumers who have joined a representative action will, generally, not be liable to pay the costs of the proceedings, whether successful or not. Instead, this falls on the Qualified Entity, which is subject to the standard rule that the “loser pays” in respect of costs. Accordingly, if a Qualified Entity brings an unsuccessful representative action, it may be made responsible for the trader’s costs of that action.
The Act also provides that a representative action can be funded by way of third-party funding “insofar as permitted in accordance with law”. The result of this is that representative actions will be subject to the existing laws on champerty and maintenance which prohibit third party litigation funding in Ireland. It remains to be seen how Qualified Entities will fund representative actions and whether this will present an obstacle to consumers exercising their rights through Qualified Entities.
The issue of third-party funding in Ireland is another area where reform would be welcome and the Law Reform Commission is due to report on this issue this year.
Conclusion
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 is a potential milestone in Irish consumer protection law. By introducing representative actions, the Act seeks to improve consumers’ access to justice across a wide range of areas. However its success may ultimately depend on which entities will be designated as Qualified Entities and whether the issue of litigation funding will hinder the effectiveness of representative actions as a tool for consumer protection.
How We Can Help
If you have any queries, or would like to discuss the above in further detail, please feel free to contact Shane Grace in our Litigation & Dispute Resolution Department ([email protected] / +353 (0)1 440 8300).
This article is for general information purposes. Legal advice must be obtained for individual circumstances. Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.