Louise O'Reilly (Dublin Fingal, Sinn Fein) | Oireachtas source

I thank the Minister of State for his remarks. Sinn Féin supports this Bill but will be putting forward amendments on Committee Stage, so it not all good news.

This Bill 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. The reason for the need for a representative action system is to protect the collective interests of consumers. Take, for example, the 2015 so-called dieselgate scandal which affected thousands of consumers across the EU. This scandal, among others, highlighted gaps in consumer rights law across the EU's Internal Market. At the time, 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. Closer to home, the tracker mortgage scandal is an example of a group of people who were treated egregiously by Irish banks and have been denied access to justice due to the high costs involved. Many of these families considered taking the banks to court but were concerned about dealing with the issue of costs, about what would happen if the case were to go against them, and about how they could take on a multibillion euro company if it appealed the case all the way to the Supreme Court. That made for David and Goliath situations. People took the only option they felt they had by not taking an action they might well have won. People in such situations have to ask how much of their lives it will take up and what will happen if it does not work out. It is into this space that multiparty action procedures should fit.

The transposition of the directive on representative actions means that, for the first time in Irish law, a group of consumers can take an action through a qualified entity. The directive on representative actions creates this process - representative action by qualified entities - for groups of consumers to enforce their rights. This new 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 set out in the directive. Actions can be brought on a domestic or cross-border basis. An example of litigation before this directive is the French leaseback situation, where consumers from all over Europe, including Irish consumers, bought properties in France with the guarantee of a leaseback and then found it did not work out as envisaged. The relevant French consumer agency is investigating complaints on people's behalf. If this legislation had been in place at the time, there may have been a case for a representative action to have been taken in France, with consumers from all over the EU joining it. This Bill, in essence, compels the establishment of a multiparty action system for consumers.

Sinn Féin has been to the fore in campaigning for the introduction of a comprehensive multiparty action system. Movement in the area of multiparty actions was driven by the then Sinn Féin justice spokesperson, Deputy Ó Laoghaire, who introduced the Multi-Party Actions Bill 2017 in the previous Dáil term. Sinn Féin's work in the area compelled the then Minister for Justice and Equality to establish a review group to investigate the matter. Currently there is no recourse to multiparty action in this State. In 2005, the Law Reform Commission, LRC, conducted a review of the law regarding multiparty 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 the aforementioned Private Members' Bill on multiparty actions by Sinn Féin, the then Minister for Justice and Equality referred to the question of the introduction of an multiparty action, MPA, procedure in the Irish legal system to the administration of civil justice review group established in 2017 and chaired by 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 there was "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 concluded that in addition to Directive (EU) 2020/1828 on representative actions, there was a further rationale for the introduction of a new and more comprehensive multiparty action procedure to accommodate mass claims. More specifically, while acknowledging the importance of public law redress mechanisms like those provided for in Directive (EU) 2020/1828, the Kelly report concluded that in addition it seemed clear that there was an objective need to legislate for a comprehensive multiparty action procedure in Ireland. The legislation does not do this. It transposes the EU directive but it goes no further than this to deliver a comprehensive multiparty action procedure. Sinn Féin believes this Bill should have been an opportunity to revolutionise the way our courts handle cases and could give countless numbers of people greater access to justice than heretofore. I understand that this is the purpose of it, but we think there is scope for amendments to broaden it out and not simply do the minimum that is required.

Steps could and should have been taken to deliver a fairer, more equitable justice system. Very often large institutions are in a position of strength in legal proceedings because of the issue of costs. This situation has needed to be addressed for some time and it is unfortunate that this Bill does not go further to deliver a comprehensive multiparty action procedure while also transposing the EU directive. We are far behind comparable jurisdictions in not having an avenue for justice through a multiparty action procedure and without significantly strengthening this Bill, that deficit will unfortunately remain. However, it should be noted that in advocating for a comprehensive multiparty action procedure, Sinn Féin seeks reforms which are carefully balanced. We know it is important to prevent spurious and excessive litigation. We should not let the fear of that prevent us from going that little bit further to encompass more people in it.

We believe the Bill does not go far enough in that it only transposes the minimum standards set out in the EU directive. We want to see the Bill go further and the Government should use this opportunity to introduce a comprehensive multiparty action procedure. This will require the input of the Department of Justice, but we see no reason the Minister for Enterprise, Trade and Employment cannot work with the Minister for Justice to achieve this.

Furthermore, the sole use of qualified entities to commence representative actions on behalf of consumers may limit access to multiparty actions as groups of individual consumers cannot bring representative actions. Consideration should be given to the use of qualified entities and groups of individual consumers to pursue representative actions. The Bill also ignores the administrative costs that will be demanded of a qualified entity to commence a representative action.

The legislation places considerable administrative burdens on the qualified entity, such as the provision of information about representative actions online, transparency as to the funding of the qualified entity to avoid conflicts of interest and interactions with consumers prior to commencement of a representative action. In that case, the qualified entity would need to have a well-resourced office with staff to complete the task of instigating representative actions. Without some form of funding from the Government or co-operative assistance from the Competition and Consumer Protection Commission it is doubtful if this directive will be fully enacted for the benefit of Irish consumers.

The directive requires that Ireland ensure that non-profit bodies are able to bring sufficient funding to take legal proceedings to protect consumers. If the Bill is not amended to provide for litigation funding, I believe Ireland will be breach of EU law as the right to litigate under the directive will essentially not exist. This is also the view of the Irish Council for Civil Liberties, and the matter must be addressed on Committee Stage.

Article 20(1) of the directive provides that "member states shall take account of the non-profit making character of qualified entities and ensure that a lack of funding is not a bar to bringing representative actions". Perhaps consideration should be given to allowing non-profit organisations to source some funding for collective actions given that it is not going to be free or, indeed, cheap to take such actions. There is significant concern that the Bill and any additional regulations will not be in place by the time this directive is to be operational on 25 June 2023.

I thank the Chair for the time to speak and I thank the Minister of State for his attention to my remarks. I look forward to working with the Minister of State and my colleagues on Committee Stage to amend and improve the legislation.

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