Representative Actions: Irish Act is Commenced

Speed Read

On Wednesday 30 April 2024, the Minister for Enterprise, Trade and Employment (the Minister) announced the signing of regulations which commenced the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the Act). By the end of last week, we saw the publication of three separate regulations, as well as certain forms and registers which set out the operational framework whereby Qualified Entities (QE) will bring claims on behalf of individuals. 

The Act was signed by the President on 11 July 2023, having completed its passage through both Houses of the Oireachtas on 4 July 2023. This Act transposes the EU Collective Redress Directive (EU) 2020/1828 (the Directive). For the first time in this jurisdiction, this legislation will allow groups of consumers, who have suffered material loss or adverse consequence due to a breach of a range of EU consumer protection laws (e.g., financial services, data, products, travel) to come together in a type of class action, known as a representative action, to seek redress. Actions will be brought by QEs.

On Friday 3 May, more information became available with the publication of the regulations referred to in the Ministerial press release from earlier that week, as well as two accompanying regulations. These Statutory Instruments (SIs) were all signed on 30 April. While this is to be welcomed, as discussed in some detail in past briefings, the funding of these actions in Ireland remains the outstanding piece of the puzzle.

Commencement Regulation

The SI entitled Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (Commencement) Order 2024 (S.I. No. 181 of 2024) brings the entirety of the Act into operation, as of 30 April 2024. The Act had provided under section 1(2) that commencement could occur on “different days….for different purposes or different provisions” but this has not happened.

Forms Regulation

The SI entitled Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (Prescribed Forms) Regulations 2024 (S.I. No. 182 of 2024) sets out different forms in the Schedule. These forms can also be accessed on the website of the Department of Enterprise, Trade and Employment (DETE).

  • Form 1- Application for Designation as a Qualified Entity under section 8 of the Act

This form sets out the specific information to be provided by a body making an application to become a QE. The criteria to be met by a QE are amplified by way of “Guidelines” which set out the type of information which it is expected will be submitted in order to demonstrate certain of the criteria. For example, in terms of the requirement that a QE can demonstrate that it has a legitimate interest in protecting consumer interests in the twelve months prior to the application, the Guidelines state that examples of supporting documentation that will be acceptable include but are not limited to the following: “Links to website content, social media content, contribution to public consultations, presentations at relevant conferences, online or hard copy advertisements, published articles, either online or in traditional media mediums such as newspaper, magazine, TV or radio.” There is also guidance in terms of the evidence to demonstrate legal personality for both applicants established in Ireland and other Member States.

To note, both the Act and the regulations are silent as to the time period within which a decision on the application is to be made.

One important point to mention is that section 8 of the Act provides that a body may apply to be designated as a QE for the purposes of taking domestic representative actions, or cross-border representative actions, or both.  Member States are to keep the European Commission (the Commission) appraised of any QEs designated for the purpose of bringing cross-border actions, which will be maintained on a Commission register. The form itself does not provide for the applicant to nominate which type of designation is being sought.

  • Form 2 – Application for a request of a review of refusal of designation or revocation of designation

The Act provides (section 14) that an applicant whose application for designation is refused or whose designation is revoked, may within 28 days from the date of notification, request a review in writing of that decision. This form is the form to use for such a review request. The Act provides that the Minister shall appoint an independent reviewer, who shall review the refusal/revocation “as soon as practicable” and advise the Minister as to the reviewer’s recommendations. It is the reviewer who shall, within 14 days of making that recommendation, inform the person making the review request, of the outcome.

  • Form 3 – Notification by a consumer to be represented by a Qualified Entity for redress measures

This form allows a consumer, per the provisions of section 24 of the Act, to notify a QE that the consumer (who must be ordinarily resident in the State or habitually resident in another Member State) wishes to be represented by a QE in a representative action for redress measures against a trader. This notification can happen any time up until the action has been deemed admissible by the Irish High Court. The signing of this form will bind the consumer into the outcome of the representative action.

  • Form 4 – Notification by a Qualified Entity to consumers regarding the determination of admissibility of a representative action for redress under section 24 of the Act / Form 4A - Notification by a Qualified Entity to consumers regarding the outcome of the determination of admissibility of a representative action for redress under section 24 of the Act 

These forms are grouped together, and both relate to section 24(3) of the Act, which provides that a QE is to inform any consumer who has notified the QE that it wishes to be represented by it of:

“any determination made by the Court in respect of which that consumer is affected, relating to-
admissibility of the representative action in accordance with section 19, or
the outcome of the determination of admissibility of the representative action.”

Form 4 appears to act as a notification by the QE to the individual consumer as to the finding of admissibility of the action by the High Court, providing that the relevant court order be appended, where available. Form 4A appears to be for use in a case where the “outcome of the determination of the admissibility of the representative action” is that it is non-admissible, although this is not expressly stated in either the Act or the regulation in question. Again, it provides for the appending of the relevant court order, where available.

  • Form 5 – Notification by a consumer to be no longer represented by a Qualified Entity for redress measures under section 24 of the Act

This form allows a consumer to withdraw from being part of a representative action.

  • Form 6 –Notification by a Qualified Entity to consumers of the particulars of any redress measures ordered by the Court in the action concerned under section 26 of the Act

Finally, the last form provides for notification by the QE to the consumer of details of the order for any redress made by the Irish High Court, include details of the period of time within which the consumer may avail of the redress measures. The types of remedies which are “redress measures” are set out in more detail in section 26 of the Act and can include compensation, repair, contract termination etc.

DETE has also published a Register of QEs and a Register of Representative Actions on its website. Both of these do not contain any information at present, which is to be expected.

Fees Regulation

The SI entitled Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (Section 29) (Maximum Fee) Regulations 2024 (S.I. No. 183 of 2024)  prescribes a fee of 25 euros to be charged by a QE to a consumer, which is the “modest” fee envisaged under section 29(7) of the Act.

What Next?

The key question now is: which bodies will apply for designation as a QE in Ireland? Article 5 of the Directive had provided that each Member State would communicate to the Commission a list of the QEs that it has designated for the purpose of bringing cross-border representative actions, including the name and statutory purpose of those QEs, by 26 December 2023. To date, the only Member States with designated QEs appearing on the relevant register are Croatia, Denmark, Finland, Hungary, Lithuania, Portugal, Slovakia and Sweden, representing a mix of government bodies, regulators and consumer interest organisations.

As bodies are designated, we will expect to see them appear on either the DETE register, or the DETE and Commission registers, if cross-border designation has been granted.

However, as we have discussed in some detail in past briefings, the funding of these actions in Ireland remains a major open question.  The Act as passed does not provide any express provisions for QEs to access funding by a third party, simply leaving the door open for the possibility “insofar as permitted in accordance with law”. The overall policy review, currently awaited from the Law Reform Commission following a 2023 consultation process, on the possible reform of the existing rules on the funding of litigation in this jurisdiction, will likely shape what happens to the law on funding going forward. It is hard to see how representative actions can gain any real momentum here, until that issue has been bottomed out, even as QEs start to gain designated status.

For more information please contact Orla Clayton, Knowledge Consultant, or your usual A&L Goodbody Disputes and Investigations team contact.

Date published: 7 May 2024