Representative Actions Bill clears Dáil and moves to Seanad

Speed Read

With Member States supposed to apply the EU Collective Redress Directive (EU) 2020/1828 (the Directive) from 25 June 2023, Ireland’s journey to enact domestic transposing legislation continues – now with some pace.

Having (along with many other Member States) failed to adopt the domestic law needed to transpose the Directive by the deadline of 25 December 2022, Ireland received an infringement notice from the European Commission – see our briefing here.

In March, the government published the Representative Actions Bill (see our analysis) and that Bill’s journey through the legislative process is now well underway. Having completed all stages in the Dáil on 21 June and now moving to the Seanad, the enactment of this legislation, whilst not by the June 2023 deadline, seems almost within touching distance. Not surprisingly, the issue of funding of representative actions has been a recurring theme during the Bill’s legislative passage so far.

Here, we look at some of the key points arising since our last update.

19 April 2023 – Bill passes Dáil second stage

Dara Calleary, Minister of State, Department of Enterprise, Trade and Employment (the Minister) made a number of points when presenting the Bill and much of the debate surrounded the issue of funding of representative actions. Given the current almost total restriction on third party litigation funding in this jurisdiction, it is not surprising that this issue continues to be in the spotlight when the full operation of the Bill is being discussed.

The Minister noted that this was a complex transposition, that this was a completely new mechanism and that this Bill creates no new rights for consumers or new liabilities for traders.

The High Court was chosen as the forum for actions under the Bill due to that Court's experience in managing and directing complex multi - party cases. Where the bill is silent on any issue, the Minister said that existing High Court rules, practice and procedure will apply in the normal way.

The process for the review of the position in relation to third party litigation funding was restated as being that the Minister for Justice (policy responsibility resting within that department) is awaiting a Law Reform Commission review with a report expected in 2024, with that report then to be evaluated (see previous briefing where we cover this).

In order to meet obligations and to transpose the Directive, the Minister was clear that the outcome of that process could not be awaited in tabling this bill.

14 June 2023 – Select Committee on Enterprise, Trade and Employment

There were a small number of technical amendments made at Committee stage as put forward by the government, which essentially update/tidy the Schedule of domestic legislation. One opposition amendment had been put forward but was ruled out of order. The Committee stage was brief.

In terms of funding of these actions, the Minister stated that he had been in communication with the Department of Justice and the Minister of State, James Browne, and was “continuing to keep pressure on the Minister of State, Deputy Browne, because without that kind of support in place, we will not be able to maximise the benefits of this Bill.”

Notably, there was an agreement that the Committee would ask the Minister along with Minister Browne to appear before the Committee, in approximately six months’ time,

21 June 2023 – Report and Final Stages in Dáil

The Bill was received for final consideration, with an opposition amendment ruled out of order. That amendment again related to the ability of the Qualified Entities to source funding, so that this is not a bar to their bringing representative actions. The Minister repeated that “the whole issue of champerty and maintenance is being considered by the Law Reform Commission” and the Bill was then sent to the Seanad.

Clearly, the outcome of the Law Reform Commission’s review, which will shape policy this area, is at the crux of the full operation of the legislation in this jurisdiction.

Funding across the EU bloc

On the wider European front, the European Parliament in September 2022 called on the European Commission to closely monitor and analyse the development of third-party litigation funding in Member States, with specific reference to the implementation of this Directive. Additionally, the European Parliament requested that following the expiry of the deadline for the application of the Directive and consideration of its effects, the European Commission submit a proposal for a Directive to establish common minimum standards on third party litigation funding, at Union level.

Given the awaited reform in the overall funding space, we may soon have a law for collective redress for consumers in place but with a further period of evolution to come.

We will continue to monitor developments in this area. For more information, please contact Orla Clayton, Knowledge Consultant, or your usual ALG Disputes & Investigations team contact.

Date published: 27 June 2023