Táim an-sásta a bheith sa Seanad chun an Bille tábhachtach seo a mholadh. The Bill transposes Directive (EU) 2020/1828 of the European Parliament and the European Council of 25 November 2020 on representative action for the protection of the collective interests of consumers. This directive requires member states to have a mechanism for consumers to seek collective redress when they claim to have been harmed by a business through breaches of certain EU consumer laws. The directive aims to ensure that consumers have access to an effective means to stop and remedy mass harm situations for breaches of these EU rights by traders.
No new consumer rights are created in this Bill and no new liabilities are placed on traders. The legislation will allow consumers to opt into a collective action and seek redress as a result of a trader's breach of their rights. Transposing this directive into our existing common law system is complex for several reasons. First, Ireland is required to create a new procedural mechanism for representative actions brought by groups of consumers. This will be the first time consumers can be represented collectively in an Irish court by a designated not-for-profit organisation. Second, the qualified entities that will bring the action on behalf of consumers will be non-profit organisations, meaning they must bear the cost of bringing the action, including paying their legal fees so the consumers and not the entity will obtain the benefits of any court order. Third, the directive applies to consumer rights set out in 66 distinct EU laws. This long list comprises a broad range of sectors from financial services to travel to data protection.
The transposition deadline for this directive was 25 December 2022. Unfortunately, we are late in doing this. Ireland, along with the majority of member states, did not meet the December deadline and the European Commission has commenced infringement proceedings. The Bill allows the Minister for Enterprise, Trade and Employment of the day to designate organisations as qualified entities to represent consumers. Organisations that apply to be designated will need to meet strict set criteria, such as being independent in their activities, having a track record in representing the interests of consumers and be operating on a non-profit basis. The Department and the European Commission will publish a list of qualified entities designated in Ireland and all member states retrospectively.
The Bill provides for a comprehensive designation process and monitoring of qualified entities and also requires qualified entities to publish information about their activities, funding and past and future cases so consumers can have confidence in the entities who will represent them and their interests.
Qualified entities will only represent consumers who have opted to join an action. No consumer will be forced to be part of any action and consumers who join an action will be entitled to redress obtained by the qualified entity. Qualified entities will be able to seek injunctions or redress measures or both for consumers. Redress measures can vary from repair, to compensation, to replacement. Consumers will receive the direct benefit of any redress measures granted in court. When this legislation is in place, the High Court can hear domestic and cross-border representative actions brought by qualified entities designated in Ireland and in member states. In a representative action, a qualified entity will take the role of the plaintiff or claimant party and will have all the rights and obligations of any plaintiff bringing an action before the High Court. As is currently the case, the High Court will have the power to grant both injunctive relief or redress measures or both where it considers either of these measures to be justified, as well as having the power to strike out unsubstantiated claims. All representative actions will be heard before the High Court because of that court’s experience of managing and directing complex multiparty cases. I am satisfied that the High Court will perform a vital role in ensuring that collective consumer grievances are dealt with in a way that ensures that consumer rights are vindicated and traders avoid dealing with unsubstantiated or vexatious cases.
I am mindful of the restrictions which apply to accessing third-party funding for litigation in Ireland and the implications this has for how the legal mechanism can be used by qualified entities in due course. The common law offences of champerty and maintenance prevent the funding of a civil action by uninvolved third parties. The report of the review of the administration of civil justice - the report by Mr. Justice Peter Kelly - considered whether these rules should be removed in whole or in part. It recommended a policy review of the matter. The issue is currently under consideration by the Law Reform Commission. In response to my queries, the Minister, Deputy McEntee, informed me that a paper may be published shortly. In this context, I wrote to the Minister of State at the Department of Justice, Deputy James Browne, explaining how the current restrictions make it very difficult for a qualified entity to source the necessary funding to launch a representative action. The Minister for Justice has asked the Law Reform Commission to examine a very complex issue; I am keen to see its report issued in due course. There is a risk that by making limited amendments to the current rules on champerty and maintenance, this could have unintended consequences. I am anxious to see the law in this area reformed in a coherent way, in order that the measures set out in this Bill will be more likely to be taken up. While these matters are the policy responsibility of the Minister for Justice, I have agreed to attend the Oireachtas Joint Committee on Enterprise, Trade and Employment again in six months, if invited, to report on progress of how the legislation is being implemented. However, in order to meet our transposition obligations for the directive, I did not have the available time to wait for the outcome of the review of third-party funding before tabling today's Bill.
This Bill is divided into three parts and contains 34 sections. It also contains a significant Schedule of relevant enactments. I will now set out some of the main components of the Bill. Sections 1 to 6, inclusive, of Part 1 provide for standard provisions such as the Short Title, definitions, regulation-making powers and the scope of the Bill. Section 7 of Part 1 deals with expenses incurred by the Minister for Enterprise, Trade and Employment in the context of the Bill. Part 2 deals with qualified entities and, among other matters, allows the Minister, in section 8, to designate organisations as qualified entities if they can meet the designating criteria in the Bill. The Minister may refuse designation in section 9, revoke in section 11 and review in section 13, a qualified entity’s designation. Section 15 of the Bill provides that the Minister can also request further information, or, under section 10, issue a directions notice, if it seems that a qualified entity no longer complies with any of the criteria for designation. In section 12 of Part 2, qualified entities can make representations if they are notified that the Minister intends to refuse or revoke designation. Section 14 of Part 2 provides that qualified entities may also seek an independent review of the refusal or revocation. Section 18 of Part 2 requires qualified entities to publish certain information on their websites about their structure, remit and past and future representative actions. Section 16 of Part 2 requires the Minister to establish and maintain a register of qualified entities in Ireland. Once designated by the Minister, a qualified entity will be permitted to bring a representative action in Ireland and before the nominated courts and administrative authorities of all other EU member states.
Part 3, among other matters, allows only qualified entities designated in Ireland or another member state to bring a representative action before the High Court under section 19. Section 20 provides that multiple qualified entities can join together to take one representative action. Section 21 sets out that before seeking an injunction against a trader, a qualified entity must attempt to enter into consultations with that trader to resolve the issue so that the trader is given an opportunity to cease a practice before the case is formally brought before a court. This Part sets out the mechanism for disclosure of evidence between the parties, in section 34, and for the High Court to deal with injunctions, redress measures, settlements and allocations of costs in representative actions under sections 23, 26, 30 and 31. Where the Bill is silent on any issue, existing High Court rules, orders, practice and procedure will apply in the normal way. Where a consumer opts to join a representative action, section 24 of the Bill sets out the steps a consumer must follow in their request to be represented by the qualified entity. Section 25 provides that consumers must also declare that they have not already received redress from the same trader for the same issue. Joining an action will preclude a consumer from receiving double compensation by separately bringing their own action against the same trader for the same cause of action. Consumers may be charged a modest fee when joining a representative action and a cap on such a fee will be set by regulation under section 29. Section 27 requires that certain disclosures be made to the High Court about the qualified entity’s funding at the commencement of the case to satisfy that no potential conflicts of interest arise. The time periods for the Statute of Limitations are paused for the duration of the representative action and are set out in section 28. In section 32, arrangements are set out to deal with the admissibility of the decisions of courts in other member states. Part 3 of the Bill allows, in section 33, for the court to order that the outcomes of representative actions are published by the trader or qualified entity, and, if compensation is to be paid to consumers, how and when they can obtain that compensation.
In spring 2021, the Department commenced a public consultation on how the directive should be transposed. While much of the directive is mandatory in nature, some elements of the detail of transposition provide member states with a degree of discretion on how to do this. Comprehensive submissions were received from industry representative organisations, consumer representative organisations and legal and insurance firms. These submissions - with different perspectives - informed the policy decisions taken by the Department when transposing those discretionary elements of the directive. The Oireachtas Joint Committee on Enterprise, Trade and Employment held hearings on the general scheme of this proposed legislation in June and September of 2022. The committee identified a known limitation in the Bill, which I referred to earlier, in relation to the lack of provision for litigation funding. As I already mentioned, the broad issue of third-party funding of litigation is within the policy remit of the Department of Justice and work is under way in that context. I reiterate that I wrote to the Minister of State at the Department of Justice, Deputy James Browne, with responsibility for law reform on 20 September 2022, and underlined the importance of reform in this area in support of consumers exercising their rights through a qualified entity under this legislation. In his response, Deputy Browne, and in a further response, the Minister for Justice, Deputy McEntee, noted the matter as important and informed me that the Law Reform Commission is reviewing the current situation and its report will be published shortly. The issue of third-party funding is hugely complex, as I already said. It is right and proper that the Law Reform Commission, and, in due course, the Minister for Justice, be given time to consider these issues.
