The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 was signed into Irish law on 11 July 2023 (the “Act”). This was enacted to give effect to Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020. The Act is to apply to representative actions brought on or after 25 June 2023 in respect of infringements of traders that harm or may harm the collective interests of consumers. The Act will apply to domestic and cross-border infringements. An important aspect of the Act is the provision for third-party funding as this would make collective actions for consumers more accessible. However, third-party funding currently remains illegal in Ireland save for circumstances where the funder has a lawful interest or legitimate concern in the litigation such as shareholders’ or creditors’ interests in litigation. The Act has not yet been commenced however, there are existing mechanisms in place that allow for collective actions in the context of GDPR, and joinder or consolidation of proceedings:

1. In the context of data breaches, Article 80 of the General Data Protection Regulation 2016 provides that authorized entities can bring collective actions on behalf of data subjects and section 117 of the Data Protection Act 2018 provides that certain non-profit groups can bring collective actions on behalf of data subjects.
2. Order 18, Rule 1 of the Rules of the Superior Courts allows for plaintiffs to make a joinder application to the court where two or more plaintiffs have a similar cause of action. Where cases are joined and the defendant believes the causes of action cannot conveniently be disposed of together, the defendant may make an application of disjoinder under Order 18, Rule of the Rules of the Superior Courts.
3. Order 49, Rule 6 of the Rules of the Superior Courts allows for the consolidation of proceedings. Any party can make an application to the High Court to consolidate proceedings and consent of all parties is not required in making the application. If consolidated, the Court can decide whether to hear the cases simultaneously or consecutively. The High Court has inherent jurisdiction to give directions in respect of several proceedings regardless of whether the criteria to consolidate proceedings has been satisfied.

Another relevant mechanism, although not a collective action, is that of a Pathfinder case. This is where one case is selected to be a ‘test case’ as it has similar or identical facts to other cases before the Court. Similar proceedings to the Pathfinder case are stayed until the determination of the Pathfinder case. This mechanism is not always favorable however, as the Court is only required to determine the pathfinder case on its own merits and is not required to have regard to the impact of its decision on the stayed proceedings with a similar set of facts.

Once commenced, the Act will allow for two types of claims to be brought: (1) injunctions, and (2) Redress Measures.

(1) Injunctive Relief

In making an application for injunctive relief to the High Court, a qualified entity must be able to demonstrate their prior efforts to engage in a consultation with the trader of the proposed representative action in an effort to resolve the alleged infringement, before escalating the dispute to litigation. In particular, the qualified entity must:

• Request that the trader concerned cease the specified infringement;
• Request that the trader concerned enter into consultations with the qualified entity concerning the proposed representative action; or
• Enter into consultations with the trader concerned with the aim of having the trader cease the infringement of the subject of the proposed representative action.

If, after consultation, or after reasonable efforts are made to enter into consultation or if the trader concerned has refused to participate in the consultations, the qualified entity is of the opinion that the trader has continued to act in a manner that constitutes an infringement and a period of two weeks has elapsed since a request to enter consultation has been made, the qualified entity can proceed to bring a representative action before the Court seeking injunctive relief.

An application for injunctive relief will be brought by way of motion and the court may grant:

• An interim injunction to cease a practice or, where appropriate, to prohibit a practice, where that practice has been found by the Court to constitute an infringement.
• An injunction to cease a practice, or, where appropriate, to prohibit a practice, where that practice has been found by the court to constitute an infringement. Where this injunction is granted the Court also has the opinion to declare that the practice of the subject of the order constitutes an infringement and direct the trader concerned to publish the decision of the Court in such form as the Court considers appropriate or, in the alternative, to publish a corrective statement in such form as the Court thinks is appropriate.

When seeking an injunction, the qualified entity is not required to either prove actual loss or damage on the part of an individual consumer affected by the alleged infringement or intent or negligence on the part of the trader the subject of the application for injunctive relief.

(2) Redress Measures

Unlike an application for injunctive relief, there is no requirement under the Act for prior engagement before a qualified entity seeks to admit a representative action seeking redress to the High Court. An additional distinction between the two categories of applications is an opt-in mechanism for consumers with respect to representative actions seeking redress measures.

A consumer who is ordinarily resident in the State or habitually resident in another Member State and who has been affected by an alleged infringement by a trader can request to be represented by a qualified entity in a representative action for redress against that trader for the alleged infringement. This request can be made at any time up until the case has been deemed admissible by the High Court.

Subject to a cap to be determined by the Minister, a qualified entity can charge a modest fee to a consumer who requests to be represented in a representative action for redress.

The consumer will be required to sign a declaration provided by the qualified entity confirming that they have not previously received compensation from the same trader for the same cause of action and that they have been informed that receiving compensation in relation to the representative action concerned will preclude them from receiving any other compensation from the same trader for the same cause of action.  If a representative action is deemed admissible the qualified entity must disclose a list of the names of consumers who have requested to be represented in the representative action and who have signed the declaration. At the end of a representative action, the qualified entity must provide the trader with a list of the names of the consumers who are eligible for redress.

The qualified entity must then keep the consumer informed of any decision made by the High Court concerning the admissibility of the representative action or the outcome of the determination of the admissibility of the representative action. Once the request has been made by the consumer and any associated entry fees requested by the qualifying entity discharged, the consumer:

• is bound by the outcome of the representative action;
• cannot be represented in any other representative action with the same cause of action against the same trader; and
• cannot bring an action individually with the same cause of action against the same trader.

Any consumer who has not requested that the qualified entity represent them will not be entitled to benefit from any redress measures granted by the Court in respect of that representative action.

A qualified entity will be required to collate and provide the Court with, information concerning the class of consumers entitled to benefit from the redress measures.

Without prejudice to the High Court’s discretionary powers in relation to redress, the Court may require a trader to provide a consumer with one or more of the following redress measures:

• Compensation,
• Repair;
• Replacement;
• Price reduction;
• Contract termination; and
• Reimbursement of price paid.

If the Court order for redress does not state the individual consumers entitled to benefit from the remedies provided by the order, the Court will identify and include in the order generally the class or classes of consumers entitled to benefit from those remedies. The High Court will also determine the period within which an individual consumer can avail of any redress measure ordered by the High Court.

Once the High Court has made its findings, the obligation then rests with the qualified entity to inform the consumers it represents of any redress measures ordered by the Court and how they can benefit from those redress measures. The Act makes clear that those consumers will not have to bring a separate action to benefit from any such redress measure.

The redress measures that may be ordered in a representative action are without prejudice to any additional remedies available to consumers under any enactment or European acts that were not the subject of that representative action.

While we await the commencement of the Act, the usual reliefs that the court may grant, such as injunctions, declarations and damages, remain available to consumers should they wish to bring a case before the court.

Similarly to the Act, the court may grant injunctions, make declarations and award damages to consumers under the Data Protection Act 2018.

The Act mirrors the general rule in Irish litigation that costs follow the event, namely that the unsuccessful party will pay the costs of the successful party. The default position is that, in the event that the representative action is unsuccessful, any award of costs made will be against the qualified entity only while individual consumers, save for exceptional circumstances, will not be liable to pay the costs of the proceedings. A successful party will be able to recover the costs relating to the provision of information to consumers for the purposes of the representative action.

Section 31 of the 2023 Act further states that a successful party to a representative action may seek to recover the costs related to providing information to consumers for the purposes of the representative action.

In all cases before the Irish courts, the general rule is that the ‘costs follow the event’. In the context of any proceedings before the Irish court, as will be the case for cases under the Act once comments, defendant to the proceedings that are concerned that the plaintiff will not be able to pay legal costs, the defendant may apply to the court for an order for Security of Costs. In making an order for Security of Costs, the court will apply different legal tests where the plaintiff is a company or an individual. If an order for the Security of Costs of made, the proceedings are suspended until the plaintiff lodges the security with the court. The security is usually in the form of a bond or cash. If the security is not lodged to the court the defendant may make an application to the court to dismiss the proceedings.

In Ireland, the provisions of the Act are not operative until the Minister issues a commencement order. Currently, the Minister has not issued any commencement orders in respect of the Act.

The provisions of the Act align with Article 22 of the Directive:

• the Act will allow consumers to bring claims for redress based on an infringement, that occurred on or after 25 June 2023;
• the Act will implement provisions of Directive 2009/22/EC on injunctions for the protection of consumers’ interests;
• pending representative actions will suspend the limitation period in respect of the consumers concerned.

A consumer must request, i.e., opt-in, to be represented by a qualified entity in a representative seeking redress under the Act before the case is deemed admissible by the High Court. However, there is no opt-in to applications for injunctive relief under the Act.

This is similar to all other proceedings involving consumers. For example, in the context of consumers, where a data breach has occurred, the data subject will benefit from an injunction the court awards, however, the data subject will only benefit from damages the court awards if that data subject has ‘opted-in’ and made a claim.

Under the Act, a “qualified entity” means a legal person or public body representing consumers’ interests that has been designated as such by the Minister or a Member State (other than Ireland), as qualified to bring representative actions.

1. A legal person with 12 months of actual public activity in the protection of consumer interests;
2. Its main purpose demonstrates that it has a legitimate interest in protecting consumer interests;
3. Of a non-profit-making character;
4. Has not been declared insolvent or subject to insolvency proceedings;
5. Independent and not influenced by persons other than consumers; and
6. Have made available information publicly that shows:
   
   
1. It complies with the above (a)-(e); and
2. The sources of its funding, its organizational, management and membership structure, its statutory purpose (if any) and its activities.

The minister will maintain a register of qualified entities which will be publicly available on its website. An entity that is on the minister’s list can use this as proof of legal standing to bring cross-border representative actions seeking injunctions or redress measures before the Irish courts.

The class criteria under the Act are yet to be determined by the Minister.

The Act provides that a qualified entity can charge a modest fee for consumers who request to be represented in a representative action for redress. There is no equivalent provision for representative actions for injunctive relief.

Representative actions for redress may be funded by a third party “insofar as permitted with law”.

The High Court is required to ensure that funding by third parties who have an economic interest in the bringing or outcome of the representative action for redress, does not operate to divert the representative action from the protection of the collective interests of consumers.

Qualified entities are required to disclose to the High Court where the representative action is funded by a third party and any justified doubts in respect of the legitimacy of funding will be assessed by the court. This assessment may result in a requirement to refuse the third-party funding or indeed refusal of the application to bring the representative action.

The Act does not alter the position in Ireland that litigation funding, save for limited exceptions, is not permitted. However, a review of third-party funding of civil litigation in Ireland by the Law Reform Commission is ongoing with a report due in 2024.

The minister has committed to maintaining pressure on the Department of Justice to procure the Law Reform Commission's final report and to engage quickly with the Department of Justice on how to implement the Law Reform Commission's findings to ensure that the Act works optimally.

• Despite the provisions of the Act, the torts and offenses of maintenance and champerty still apply, i.e., third-party funding, subject to certain exceptions, remains illegal in Ireland.
• The Law Reform Commission published a consultation paper on third-party litigation funding exploring models by which third-party funding could be introduced in Irish litigation. However, it is not confirmed whether the recommendations in the paper with be incorporated into law.

Currently, third-party funding is only permitted in circumstances where the funder has a lawful interest or legitimate concern in the proceedings. The lawful interest exists separately from any agreements relating to the sharing of litigation proceeds. ATE insurance and conditional fee arrangements, in the form of deferred fees, are allowed under Irish law.

Article 11 (4) of the Directive states “Member States may lay down rules that give the individual consumers concerned by a representative action and by the subsequent settlement the possibility of accepting or refusing to be bound by settlements referred to in paragraph 1.” In this regard, the Act provides that a qualified entity and a trader may, in a representative action for redress measures, jointly propose to the Court a settlement regarding redress for the consumers represented in that action. The Court, following consultations with the qualified entity and trader, may invite the qualified entity and trader to reach a settlement within a reasonable time limit. The settlement is subject to the approval of the Court and any settlement approved shall be binding on the qualified entity and trader and the individual consumers represented in the concerned action.

If the High Court does not approve a settlement, the court shall continue to hear the representative action. In refusal to approve a settlement, the court must consider whether to refuse is contrary to any other enactment or European Act or includes conditions that cannot be enforced, taking into consideration the rights and interests of all parties, in particular, those of the consumers.

Redress measures provided through an approved settlement are without prejudice to any additional remedies available to the consumers represented which were not subject to that settlement.

A register of qualified entities will be publicly available on a website maintained by the Minister. The European Commission will also maintain a list of designated qualified entities. An entity that is on this list can use this as proof of legal standing to bring a cross-border representative action seeking an injunction or redress measures before the Irish Courts.

A designated qualified entity has information obligations and must publish information relating to the representative actions that it has brought before the High Court or other Member States, including information relating to the status and outcome of those representative actions.

A designation as a qualified entity is subject to Ministerial review, at least every 5 years, to ensure that the qualified entity continues to satisfy the designation criteria. A review will also be undertaken if concerns are raised by another Member State or the European Commission regarding compliance with the designation criteria under the Directive, which mirror the criteria outlined in the Act.

Section 34 of the Act addresses discovery. It provides that where the qualified entity has established that there is sufficient evidence for a representative action to be deemed admissible and that there is evidence in the possession or control of the defendant, the court may order disclosure of the evidence to the qualified entity. Likewise, where the defendant submits that there is evidence in the possession or control of the qualified entity, the court may order disclosure of the evidence to the defendant.

In Irish proceedings, parties will first request voluntary discovery from the other side and only bring a motion for an order for discovery where voluntary discovery has been refused. Order 32 of the Rules of the Superior Court sets out the process for obtaining discovery at the request of the court. Where a party makes discovery and the receiving party considers the discovered documentation inadequate or incomplete, an application may be made to the court seeking an order for further and better discovery.

The Act provides for equal treatment of domestic and cross-border representative actions. Section 19 states that in the case of a cross-border representative action brought by a qualified entity, the Court will accept the inclusion of the name of the qualified entity in the Commission’s list of designated qualified entities as sufficient evidence that the qualified entity is entitled to bring a cross-border representation action.

The Act does not make any provision for cy-près awards.

Time limits in relation to redress funds are dealt with in Section 28 of the Act. That section provides that in the case of an individual consumer in relation to a claim for redress based on an infringement, that occurred on or after 25 June 2023, the period beginning on the date on which a representative action is deemed admissible by the court is ending on the date which is 60 days after:

1. The representative action is dismissed by the court,
2. The qualified entity has notified the court that it has withdrawn the representative action,
3. The court has made an order for an injunction,
4. The court has made an order for a redress measure, or
5. The court approves a settlement in the representative action,

Whichever first occurs, is to be disregarded.

In Ireland, the Mediation Act 2017 obliges solicitors to advise their clients to consider mediation prior to issuing proceedings. The Act also provides that a court may, whether on the application of a party to the proceedings or of its own accord, invite the parties to the proceedings to consider mediation to resolve the dispute.

The impact of the Act once commenced will remain limited whilst third-party funded litigation remains illegal in Ireland, save for in certain circumstances where the funder has a lawful interest or legitimate concern in the litigation.