Tuesday, 14 November 2017
Multi-Party Actions Bill 2017: Second Stage
I will make a statement on behalf of the Minister for Justice and Equality, Deputy Charles Flanagan. I thank Deputy Donnchadh Ó Laoghaire for introducing his proposed Multi-Party Action Bill 2017. At the same time, I assure the House that the Government will be monitoring the progress and outcome of the Central Bank's ongoing tracker mortgage examination process and will consider further policy actions if necessary. The Government is also determined to follow through on the range of follow-up actions and information deadlines to which the banks have now committed.
As the House is aware, multi-party litigation refers to situations where a number of parties are involved in a single piece of litigation and in relation to which they stand on common legal ground. Well-known examples have been the Army deafness claims, social welfare equality cases and asbestos exposure claims. A key point of reference is the report on multi-party litigation that was published by the Law Reform Commission in September 2005. It is important to note at this point of our discussion that the Law Reform Commission proposed that this new procedure be dealt with by the rules of the Superior Courts rather than primarily by legislation. At the back of its report, in Appendix A, the Law Reform Commission provided a draft of those very rules to apply to multi-party actions.
While it is claimed that tonight's Private Members' Bill has drawn from the 2005 Law Reform Commission report, the Bill takes a fundamentally different approach. Whereas the Law Reform Commission took the rules of court approach that I have just mentioned, the document before us just copied and pasted those rules word for word into the text of what is proposed to be a Bill. This was not the intended purpose. Not surprisingly, therefore, a number of fundamental issues arise. This follows the Bill's initial consideration at the Department of Justice and Equality as well as by the Courts Service and the Office of the Attorney General. On behalf of the Government, therefore, I will oppose this Private Members' Bill. The following are some of the key observations that have informed the Government's position.
The Bill is technically flawed in that it seeks, inappropriately, to enact as primary legislation a scheme that was intended by the Law Reform Commission to be in the form of rules of the Superior Courts. There are considerable doubts as to whether multi-party action measures would be of any assistance in the resolution of issues relating to mortgage contracts or tracker rates and, in the context of the timeline for actions to be addressed by the courts, it should be noted that a more efficient redress and compensation scheme is in place.
Whether multi-party actions are introduced in Ireland is a significant public policy issue, with legal and constitutional implications that would have to be carefully examined. While a Law Reform Commission report exists, it is now 12 years old and, therefore, a review of its recommendations is necessary. The President of the High Court has agreed to consider the question of multi-party actions as part of the review of civil justice administration that is under way.
Multi-party litigation is being held out as a cost effective and efficient avenue for those adversely affected by the tracker mortgage issues that have arisen. However, it is questionable whether the proposed Bill would be a viable course of action in mortgage contracts, as a series of class actions would likely be necessary given the likely multiple defendants involved, both multiple banks and a number of funds to which mortgages have been sold, and the multiple different forms of mortgage contracts involved, both within each bank and-or across banks.
The following observations on the proposed Bill can also be made. The Bill simply substitutes the formula "in this Bill" for the Law Reform Commission's original language of "In this Order". This is a crude changing of rules intended to be applied in the courts into provisions to be applied externally to the courts under primary legislation. This runs against the preference and recommendation of the Law Reform Commission in 2005 to deal with the multi-party action issue by means of rules of court rather than by new legislation.
A most important element of the Law Reform Commission proposal is omitted, namely, the requirement that any person joining a multi-party action scheme agrees, at or before the time he or she joins it, on the terms of any settlement arrangement.
The Law Reform Commission wanted its new procedure to be an alternative alongside existing options where considered more appropriate. In that light, the principal routes open to pursue privately driven multi-party litigation that remain under our law, namely, the representative action or the test case, will also have to be taken into account. Some existing rules of court apply. We would need to consider carefully the designation of a lead solicitor under a Bill in case this impinges on the right of access to the courts by an individual with a legal representative of his or her free choice.
It is also considered that the proposed Bill raises legal issues regarding the mandatory obligations imposed, for example, by section 7. These may have an impact on the independent role of the Judiciary under Articles 34 to 37 of the Constitution and the right to fair procedures of potential defendants to such class actions.
The fact this Bill purports to apply to existing proceedings may also pose legal issues regarding legislative intervention in ongoing proceedings, which may alter the outcome of those proceedings contrary to the separation of powers. It would be considered safer for any such Bill to apply to new proceedings only.
In the 12 years that have elapsed since publication of the Law Reform Commission report on multi-party litigation there have been a number of key developments. The implementation of the report after this amount of time and the introduction of any legislation to enable the type of collective legal action envisaged, would require a detailed consideration of its merits and impacts in the public interest. This would include the sustainability of a collective action regime and its potential costs to the parties concerned and to the Exchequer. Moreover, the areas of law involved span consumer protection, competition, the environment and the provision of financial and other services, and would require cross-departmental policy consultation.
It is also recognised by the Government that consideration needs to be given to the relevant intervening developments that have taken place at national, European Union and wider international levels. This includes our neighbouring jurisdictions of England and Wales, where group litigation orders have been in place for the past 15 years and from where valuable lessons regarding multi-party actions may be learned.
Taking all of these matters into account, the Minister for Justice and Equality, Deputy Charles Flanagan, has secured the agreement of the Government to refer the question of the introduction of a multi-party action procedure in the Irish legal system for consideration by Mr. Justice Peter Kelly as part of the review of civil justice administration he has recently commenced.
In opposing the Private Members' Bill for the very substantial reasons I have set out I would, at the same time, commend the initiative of the Minister, Deputy Flanagan, to the House.