Ireland
Implementation of the European Directive on representative actions
Which national regulations transpose the Directive into national law?
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the Act) transposes Directive (EU) 2020/1828 into Irish law. The Act came into force on 30 April 2024 and introduces a framework that enables representative actions to be taken. The Act applies to infringements that harm the collective interests of consumers which occur on or after 25 June 2023.
Who is entitled to bring a representative action?
A representative action may be brought by a “qualified entity” (QE) before the Irish High Court. These entities must be designated by the Department of Enterprise, Trade and Employment. Section 8 of the Act outlines the criteria for an organisation to be designated as a QE, which includes being a legal person, demonstrating 12 months of consumer protection activity, having a non-profit character, and being independent from trader influence. Once designated, a QE is added to the public register of QEs.
Pursuant to Section 20 of the Act, multiple QEs from different Member States can jointly bring a representative action if the infringement affects consumers across multiple Member States. In such a case, the QEs will nominate one QE as lead to prosecute the claim, with all others being bound by the result of the representative action.
What can be the subject matter of a representative action?
The Act allows a representative action to be brought in Ireland on behalf of a group of consumers where a “trader” (as defined in the Act) has infringed a “relevant enactment” (as defined in the Act). The relevant enactments are listed in a schedule to the Act and encompass a wide range of areas such as financial services, travel and tourism, energy, health, telecommunications, and data protection.
Which individual consumers are represented in a representative action?
Individual consumers represented in a representative action must, in accordance section 24 of the Act, notify the QE before the court determining that the action is admissible as a representative action. They must also sign a declaration confirming they haven’t already received redress from the trader and understand that receiving compensation from this action precludes any future claims against the trader for the same rights infringement. This requirement does not apply to actions seeking injunctive relief. Consumers who opt-in by submitting a form and paying a fee (up to €25) to the QE are represented in the action and are bound by its outcome.
What will be the outcome of a representative action?
The court can order redress measures if it finds that a trader has infringed upon consumer rights. Pursuant to section 26(2) of the Act, the court may require the trader to provide one or more of the following remedies:
- Compensation
- Repair
- Replacement
- Price reduction
- Contract termination
- Reimbursement of the price paid
Are there particular rules for the disclosure of evidence?
The usual rules and procedures under Irish law regarding the disclosure of evidence apply for representative actions brought pursuant to the Act. In addition, section 34 of the Act provides that a if a QE brings a representative action to court and needs more evidence that is held by the defendant in the representative action or a third party, the court can order that this evidence be disclosed. Similarly, if the defendant needs evidence held by the QE or a third party, the court can order that this evidence be disclosed to the defendant.
Is third party funding possible?
The Act allows for third-party funding of representative actions “insofar as permitted in accordance with law”. However, this does not change the long-standing prohibition under Irish law against third-party funding by entities with no interest in the dispute due to the rules on maintenance and champerty.
Where there is a third party funding the representative action, the court has an enhanced role. Specifically, it shall ensure that there is no conflict of interest between the third-party funder and the protection of consumer interests, in particular, in determining whether to agree a settlement. The QE must deliver an overview of sources of funding to the court and the court is entitled to require the QE to refuse or change certain sources of funding or even refuse the application of the QE to bring the representative action in the first place. A court will also look to ensure that a competitor of the trader is not funding the representative action.
Conclusion
The Act marks a significant advancement in consumer protection within Ireland. By enabling QEs to bring representative actions on behalf of consumers, the Act ensures that collective consumer rights are safeguarded against infringements. The framework established by the Act not only facilitates cross-border cooperation among Member States but also provides a robust mechanism for redress, including compensation, repair, and reimbursement.
Contact
Pamela O’Neill
T: +35 3 16 64 42 41 E: pamelaoneill@eversheds-sutherland.ie
Norman Fitzgerald
T: +35 3 16 64 42 39 E: normanfitzgerald@eversheds-sutherland.ie
Ciara Geraghty
T: +35 3 16 64 43 36 E: ciarageraghty@eversheds-sutherland.ie
Aidan Kirrane
T: +35 3 16 64 42 56 E: aidankirrane@eversheds-sutherland.ie
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