Ms Clare McNamara:

I thank the Chair and the committee members for the opportunity to discuss the scheme of the Bill. As the Chair said, I am joined by my colleagues, Mr. Paul Brennan and Ms Sadhbh McGrath. We very much welcome the opportunity to contribute to the committee’s scrutiny of the scheme and to assist it in any way we can. I intend to outline the context for introducing the scheme and then set out its main provisions after which we will look forward to hearing the member’s views and answer questions.

This scheme transposes Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and it repeals Directive 2009/22/EC. Member states have until 25 December 2022 to transpose this directive.

The 2015 Dieselgate scandal affected thousands of consumers across the EU. This scandal, among others, highlighted gaps in consumer rights law across the EU’s internal market. Back then there was no tool across the EU that would have allowed consumers, in mass harm situations, to litigate and be represented in large groups by another entity. The directive on representative actions creates such a new tool: representative action by qualified entities for groups of consumers to enforce their rights. It is different from the US class action system. The US class action system is a for-profit mechanism where consumers can be responsible for the costs, while the EU system is non-profit and consumers do not cover the costs. It does not create any new consumer rights. The directive on representative actions applies to a specific list of EU laws, 66 in total. Actions can be brought on a domestic or cross-border basis. A public consultation was conducted in the spring of 2021. There were 17 responses from varied stakeholders ranging from law firms to consumer rights organisations.

The transposition of the directive on representative actions means for the first time in Irish law, a group of consumers can take an action through a qualified entity. Traders compliant with consumer protection legislation have nothing to fear as this Bill does not impose any new obligations on them. The scheme of the Bill under scrutiny by the committee today was approved for drafting by the Government on 22 March this year. Given the time limitation, the Chair will excuse me for not going through the scheme provision by provision. Instead, I will summarise as far as it is possible to do so.

The scheme contains three parts and one schedule. In the main, the directive on representative actions is a maximum harmonisation directive giving member states little discretion as to its implementation.

Member states have discretion on measures such as how qualified entities are funded and whether consumers should opt in or opt out of representative actions.

Part 1 includes heads 1 to 4, inclusive, and deals with preliminary matters. Heads 1 and 2 deal with standard provisions, such as the Short Title and definitions. Head 3 permits the Minister to make regulations for the process of designating qualified entities and permits the Minister for Justice to make regulations for the process of bringing a representative action to the High Court. Head 4 permits the Superior Courts Rules Committee to make rules of court in relation to the conduct of representative actions pursuant to Part 2 of the Act.

Part 2 incorporates heads 5 to 15, inclusive, and covers representative actions. This part provides overall for representative actions which a designated qualified entity may bring and the High Court's role.

A qualified entity may bring a representative action to the High Court on behalf of consumers who have opted in to the action. The Statute of Limitations periods are suspended during a representative action. A qualified entity may seek any combination of an injunction or redress measures. However, the action can only be taken against a trader for an alleged breach of one of the EU or national consumer protection provisions listed in Schedule 1 of the Act.

Qualified entities bear the costs of the representative action, not the consumers. Any costs orders made by the court, apart from exceptional circumstances, will be made against the qualified entities. The qualified entity must enter into pre-litigation consultation with the trader.

The High Court must assess the admissibility of the representative action and can dismiss manifestly unfounded cases. The High Court must ensure there are no conflicts of interest between the qualified entity and any third-party funder. The inclusion of qualified entities designated in another member state on the Commission's qualified entity list is proof of standing. A court decision from another member state about the same trader for the same practice can be used as evidence. The High Court can order either party to inform consumers about the result of the representative action and impose penalties on any party failing to comply with the court order.

Part 3, on qualified entities, provides the mechanism whereby organisations which have a track record in representing the collective interests of consumers, and which meet other criteria, can be designated by the Minister as qualified entities.

An appeals mechanism is set out and the Minister can revoke designation where it is determined that the organisation no longer meets the designating criteria. Qualified entities can charge consumers an entry fee. A qualified entity is also required to notify consumers about representative actions it has brought or intends to bring, and how consumers can notify the qualified entity of their wish to be represented in a representative action.

The Schedule lists the European Union measures and Irish measures under which a representative action may be brought against a trader for alleged infringements.

I am happy to discuss the provisions of the scheme in more detail and to respond to questions from members of the committee.