Mr. Philip Andrews:

I thank the Cathaoirleach, the Teachtaí Dála and the Seanadóirí for the opportunity to discuss the general scheme of the Bill. The Law Society welcomes the opportunity to contribute to the committee's scrutiny of the general scheme. I am a member of the business law committee of the Law Society of Ireland. I am a practising Irish solicitor in the area of EU competition, trade and regulating markets. My practice is mainly advisory and I do not regularly litigate cases. I am therefore not an expert in litigation procedure. I wish to extend apologies on behalf of Ms Aleksandra Pruska who is unable to attend today for health reasons.

I will set out some background and then talk about three specific points with regard to the general scheme. As I am sure is well-known to members, in 2005 the Law Reform Commission, LRC, conducted a review of the law regarding multi-party litigation and reached a preliminary conclusion that the Irish legal system "lacks a comprehensive procedure that would tackle class claims in a uniform and consistent fashion". An LRC report on foot of that assessment which was issued later in 2005 recommended that a formal procedural structure for collective redress be established. Following the introduction of a Private Members' Bill on multi-party actions, MPAs, the then Minister for Justice and Equality referred the question of the introduction of an MPA procedure in the Irish legal system to the review of the administration of civil justice review group, established in 2017 and chaired by the then president of the High Court, Mr. Justice Peter Kelly.

In January 2018 the European Commission published a report and study on collective redress mechanisms in member states. The report and study found that Ireland was an outlier among EU member states because Ireland had "no dedicated mechanism for bringing collective claims in Ireland". It continued:

Rather, mass claims are dealt with under the general rules of civil procedure which only allow for collective claims in very limited circumstances.

A 2020 report on foot of the work of the administration of civil justice review group, which I will call the Kelly group, concluded that in addition to EU Directive No. 1828 on representative actions, there was a further rationale for the introduction of a new and more comprehensive MPA procedure to accommodate mass claims. More specifically, while acknowledging the importance of public law redress mechanisms like those provided for in EU Directive No. 1828, the Kelly report concluded that in addition it seemed clear that there was an objective need to legislate for a comprehensive MPA procedure in Ireland.

In SPV v. HSBC, then Chief Justice Clarke stated, in 2018, that:

I remain very concerned that there are cases where persons or entities have suffered from wrongdoing but where those persons or entities are unable effectively to vindicate their rights because of the cost of going to court. That is a problem to which solutions require to be found. It does seem to me that this is an issue to which the legislature should give urgent consideration.

While the Law Society welcomes the directive and general scheme, it would support broader and carefully-balanced reforms that implement the recommendations of the LRC and the Kelly report. It would be important that those reforms are carefully balanced to facilitate small-harm class actions while preventing excessive litigation.

I will give one US example. In the US, courts have generally applied a very lenient standard for certification of class actions. An example is a recent class action lawsuit from May 2022, Chimienti v. Wendy’s International, in a New York district court in which the plaintiff seeks compensatory damages, disgorgement of ill-gotten gains, punitive damages and injunctive relief for alleged misrepresentations and omissions because “Wendy’s advertises its burgers to make it appear that the burgers are substantially larger in size than the actual burger served to customers”. The lawsuit goes on to claim that “the beef patties used for its advertisements are not fully cooked to make it appear that they are approximately 15-20% larger than the beef patties that are actually served to customers”. The claim is brought by the plaintiff “on his own behalf and on behalf of all other persons or entities who purchased an overstated Wendy’s menu item”, so it is really an opt-out system there. It is estimated that many thousands of new class actions are filed each year in the US federal and state courts. According to one authoritative source, “A putative class action takes no more than a single named plaintiff and a filing fee typically of several hundred US dollars”.

I will now turn to the general heads and our three comments. EU Directive 2020/1828 sets minimum standards only. It requires member states to put in place, at a minimum, at least one procedural mechanism to enable consumer organisations, called “qualified entities”, to commence representative actions on behalf of consumers. Notably, under the directive and the general scheme, only qualified entities, not individual consumers, can bring representative actions. Many, if not most, member states are expected to go beyond the minimum requirements, or already do so.

A key purpose of the directive is to enable, consistent with Article 38 of the Charter of Fundamental Rights of the EU, representative actions to ensure a high level of consumer protection. That is in recital 4 of the directive. To that end, the directive requires member states to implement, at a minimum, a type of collective representative action involving a qualified entity, but it is not a purpose of the directive to require that representative actions can only be taken by qualified entities.

Under subsection (1) in head 5 - application, the general scheme states that “a representative action may be only brought before the court by a qualified entity designated by the Minister for the purposes of bringing a domestic representative action”. A question arises as to why head 5(1), appears to suggest that only collective actions by qualified entities are permitted in Irish law. By explicit inclusion of the word “only", a question arises as to whether a limitation is incorporated into the Irish legislation that may have unintended consequences. Could this approach prevent organic emergence of representation actions in common law? Ireland currently has a relatively restricted regime for collective action, including by reference to other EU member states, as well as other common law jurisdictions such as the UK. A legislative provision that limited private-party rights to take collective or multiparty actions in such a way could also run counter to recommendations of the LRC and the calls for legislative reform by the Judiciary. The 2020 Kelly report refers-----