Multi party actions and litigation funding - back on the radar?

The Joint Committee on Justice and Equality's Report on the Multi-Party Actions Bill 2017 contains interesting conclusions. This Private Members' Bill was introduced by Sinn Féin last November to provide for group litigation or class actions, allowing multiple claimants to bring a single legal action arising from common facts or issues. The Bill reflects a Law Reform Commission paper issued in 2005 which recommended the facilitation of multi-party litigation, a recommendation which was not adopted by the Government of the day.

Currently, where many claimants have similar claims, the litigation is typically progressed by lead cases (often called "pathfinders") which proceed as a 'test case'. However, like every litigant, the claimant in a test case faces the risk of costs potentially being awarded against them if they lose, potentially leaving them solely liable for the litigation costs. Advocates of the Bill consider that it would reduce the costs of litigation, make better use of court resources and improve access to justice.

An alternative view, and one which may well have been a factor as to why the Law Reform Commission recommendation in 2005 was not implemented, is that the introduction of such measures might lead to a significant increase in litigation, including claims against the State with a consequential impact on the public finances. Indeed, this has been the experience in some other jurisdictions which introduced such procedures.

A more detailed consideration of the provisions of the Bill can be found here. In summary, it provides that a judge can certify proceedings as a 'multi-party action' if the litigation involves multiple parties and common or related issues of fact or law. If proceedings are so certified, the Judge will make an order establishing a Register which other affected parties could apply to join. All parties on the Register would then be jointly and severally liable for the costs of the litigation.

The Joint Committee Report is broadly supportive of the Bill. It observed that current mechanisms in Ireland for group litigation are inadequate "in a number of respects", and the Bill represents the best option currently available for dealing with multi-party litigation.

Interestingly, the Committee called for the issue of litigation funding to be addressed to enhance access to justice and to enable the public to "vindicate their rights" .This reflects the recent acknowledgment by the Supreme Court in the Persona Digital Telephony proceedings of the difficulties facing financially constrained plaintiffs in pursuing litigation in Ireland. The Committee noted that the legal aid system is too restrictive and in need of reform and that consideration should be given to removing the prohibition on solicitors and barristers charging contingency fees based on a percentage or proportion of any Court awards or settlement. 

The Committee also commented that the Courts are not the only forum by which disputes can be resolved and that multi-party litigation should ultimately be a remedy of last resort. The Committee's view was that an integrated model made up of various tools, such as regulation, alternative dispute resolution, and consumer ombudsmen might prove to be the optimum approach in achieving collective redress.

Where to next?

While the Committee concluded that the Bill should proceed to Committee Stage, it remains to be seen if the Bill will be supported by the Government or other political parties. The Minister for Justice in his submission to the Joint Committee noted that the Law Reform Commission will be reporting on litigation funding. The Minister also referenced the ongoing Review of Civil Justice Administration spearheaded by Mr Justice Peter Kelly and noted that the Government wishes to take into account the findings of that review and the forthcoming Law Reform Commission reports in its consideration of this proposed legislation. The review by Mr Justice Peter Kelly is due to conclude within two years and that the legislature may be reluctant to overhaul the law in this area without the benefit of Mr Justice Peter Kelly's recommendations.

For more information please contact Don Collins, Associate or Ciarán Ó Conluain Associate or a member of A&L Goodbodys Disputes team.

Date published: 9 October 2018