Tuesday, 14 November 2017
Multi-Party Actions Bill 2017: Second Stage
I move: "That the Bill be now read a Second Time."
I bring it to the attention of the House that Ireland has scored, which is a good start to the evening. The last time I took part in a late evening debate, Cork City won the league while I was here. I hope that is a good omen and that the result goes our way.
Is dóigh liom gur féidir leis an píosa reachtaíochta seo difríocht shuntasach a dhéanamh sa tslí a dhéanann na cúirteanna láimhseáil ar chásanna ina bhfuil éagóir déanta ar chatagóir mhór daoine agus tabharfaidh sé deis do níos mó daoine cóir a bhaint amach.
The Multi-Party Actions Bill 2017 will revolutionise the way our courts handle cases and could give countless numbers of people greater access to justice than heretofore. The Bill represents a significant step towards a fairer, more equitable justice system. At the launch of the Law Reform Commission paper on multi-party actions in 2005, Ms Justice Susan Denham, as she then was, said that the law was too expensive, too slow and too unequal. Unfortunately, that remains the case yet the proposals developed in that paper have sat on a shelf ever since. The legislation is a potential game changer in terms of how the courts deal with large numbers of people affected by a particular injustice or inequity whose cases share a common issue of fact or law. The Bill has a very wide potential application. For example, it would have been of utility in the instance of the DePuy hip replacement cases. It could apply to a wide range of cases involving institutional abuse, especially the current tracker mortgage scandal, making it much easier and more realistic for the victims of this rip-off to sue the banks. I will return to the application of the proposal to this issue.
Multi-party litigation relates to groups of cases that share characteristics sufficient to allow them to be dealt with collectively. This is about access to justice, but it is also about efficiency and case management. At the moment, there is no comprehensive procedure in the Irish legal system which can deal with such claims. The representative case model is deficient for this purpose and of no use to many of the people our Bill would benefit because it only provides injunctive or declaratory relief. That one cannot seek damages is a major deficiency.
Currently, the only real option is for a test case to proceed and related cases to follow subsequently on the basis of that precedent. This model has significant drawbacks too. First and most significantly, the person taking a test case faces the very significant consideration that an order for costs will be made for which he or she alone will be liable. This is an enormous disincentive to taking any case, particularly for people who may be on limited incomes or dealing with debt already, such as someone in mortgage arrears. It also means that the person taking the case has no direct responsibility to others in the same or similar situations who do not have to be notified. It is essentially a single case on a single set of facts, even if the Judiciary has skilfully used the model to deal with classes of cases. That is constructive administration and, ultimately, not a sustainable model for dealing with these kinds of case. It is not possible to calculate the potential overall liability of all cases in the class or category of cases under this model. This is obviously difficult for the defendant, but also for potential plaintiffs for whom there might be nothing left after the first or initial cases.
There is obviously also the issue of legal representation and duplication of costs. To quote the Law Reform Commission paper on this matter: "The test case approach encourages, even if it does not validate, the multiplication rather than the division of costs for the generic issue among the members of the group." I note that our proposals are based largely on the 2005 paper. I pay tribute to those who worked on that recommendation, in particular the lead researcher, Mr. Ronan Flanagan. The paper continues:
This is principally because the test case is not a recognised, and therefore controlled, procedure. Each case within the group is regarded as an independent unit requiring individual and separate attention. In this way, the test case fails to acknowledge the overlap among the group on the generic issue and thus allows for a separate billing of costs for individual cases.
In essence, there is duplication of legal representation and of the costs of litigation. The existing processes are totally inadequate for many people, and categories of people, who are seeking justice for the wrong inflicted upon them. While they offer some benefits, there is no reason they could not coexist with the model we propose. That model is much more dynamic and its major benefits are that it would reduce the cost of litigation, reduce duplication and cost of representation, make better use of court resources and, crucially, improve access to justice.
The process would work as follows. A group of persons affected by some injury or injustice who wish to take a case would first contact the Courts Service to see if there was any previously certified relevant multi-party action. If not, a nominated judge could certify that there is a common or related issue of law or fact and that a multi-party action offers a fair, appropriate and efficient procedure for resolution. This is governed under section 2. We have also sought to implement the Law Reform Commission recommendation on commonality as a requirement, rather than the condition of "sameness", which is far too restrictive. A requirement for sameness can restrict the ability of plaintiffs to join a case currently. Under the proposed procedure, a judge would issue a multi-party action order, as set out in section 3, including criteria by which permission to be entered on the register shall be considered. The order would also contain directions on the publication of the multi-party action, which is an important mechanism to ensure that other people who have been affected by the issues would be notified of the case and their ability to join it. That is dealt with in section 4. This is crucial given that there is every possibility that, as with the tracker mortgage issue, the affected parties will be spread across the country. They would be unaware, save for newspaper reports, that a case was being taken. As such, this procedure allows them to be notified.
We have again gone along with the Law Reform Commission's recommendation of an opt-in mechanism, rather than an opt-out mechanism, for reasons of efficiency and certainty. This is subject to a power of the court to oblige that an action to be joined to an existing multi-party action. The judge's directions will also contain a closing date after which people cannot join the multi-party action. Section 5 relates to the directions the judge may give as to the resolution of the order. The documentation must include the cause of action and the order may contain any further directions required for the appropriate fair and efficient resolution of the multi-party action issues. This provision is crucial in terms of the flexibility the judge will require in case management. I reiterate that efficient case management and administration goes to the heart of this process.
Section 6 relates to the lead solicitor who will lead the action and his or her appointment. This efficiency in legal representation is a central benefit of the model. Section 7 relates to the lead case or cases to be agreed by case conference to represent the central and common issues in the set of cases. Section 8 relates to the effect of a multi-party action order and the circumstances in which it is binding. Section 9 provides for costs, which shall be divided equally unless the nominated judge orders otherwise. Liability for costs shall be joint and several. Section 10 provides that nothing in the legislation shall be construed as limiting or reducing the power of an authority to make rules regarding a court, provided they are consistent with the provisions of the Bill. Section 11 provides for the Short Title and commencement.
The Bill offers radical reforms which could make a considerable difference to people's ability to take cases as a class. We are far behind comparable jurisdictions in not having an avenue to justice like this.
It could have a similar effect and impact as processes such as the class action in the United States, or the group legal order in the UK. There are many people out there who are the victims of such injustices and who would have an actionable case but the cost of taking it on themselves makes it effectively impossible. This brings access to justice within their grasp. It is not difficult to think of the many categories of people who could have and can benefit from the ability to take cases. For example, victims of institutional abuse could have taken cases against the institutions which allowed that to happen - together rather than as individual cases. Victims of related medical negligence, or malpractices, could have taken actions against the hospital or doctor responsible. People who suffered due to faulty products, medical or otherwise, could band together in an action under this process. The most current example is the tracker mortgage scandal. The manner in which the banks have treated the victims of the tracker mortgage scandal has been duplicitous, deceptive and scandalous, and the Government has essentially facilitated them, coalescing in their timelines. The banks have essentially taken advantage of the fact that those affected are often not in a position to take an action themselves, because of the financial cost in doing so alone. Very often, large institutions are in a position of strength in legal proceedings because of the issue of costs. This Bill redresses that balance.
I believe that this Bill will allow for people to proceed on the basis of strength in numbers and will embolden many to become part of an action where previously the fear of costs would have intimidated them. We want to give those affected by the tracker mortgage scandal and other injustices the tools to take on the banks or any other such institution, body or individual, to bring them to justice and to get what people are entitled to. We hope that all parties will support this legislation and allow it to pass through these Houses without delay. It makes sense in terms of court administration, the cost of litigation and representation, and access to justice.
Tá mé thar a bheith sásta labhairt ar an mBille seo. Cé gur mhaith liom bheith ag amharc ar an gcluiche, tá an reachtaíocht seo iontach tábhachtach agus tá ard-mholadh tuillte ag an Teachta Ó Laoghaire agus a oifig as ucht é a thabhairt chun tosaigh anocht.
I commend Deputy Ó Laoghaire and his office on bringing forward this excellent Bill. I extend my thanks to Padraic Kissane, somebody we have heard a lot about in recent days and weeks, as have those who have been following the tracker mortgage issue for many years. He sent an email and drew my attention to class action and the question of why we did not have it here. That was the spark that inspired us to look into this issue and to bring the legislation forward. Having done so, we found out that, lo and behold, the legislation had already been drafted. It was done 12 years ago by the Law Reform Commission in an excellent report on the need for class action.
I have listened to the stories of the many victims and some of them are personal friends of mine, while some are extended family. They have considered taking the banks to court but they have had to deal with the issue of costs, of what happens if the case goes against them and how they can take on a multibillion euro company if it appeals the case all the way to the Supreme Court. They have to ask how much of their lives it will take up and what will happen if it does not work out.
We have all, including the Taoiseach, criticised the banks and spoken of them stealing money from their own customers. The original estimate was some €500 million but it is now approaching €1 billion with the number of victims being added to week in and week out. Last Thursday, Bank of Ireland told us that it robbed 6,000 other customers, including 1,800 of its own staff. There are over 20,000 victims so far and the number is expected to reach 30,000 by the time the investigations are over.
Each of those individuals or families must contact a solicitor to start their case and if things progress they need to pay for a barrister to take their case to court. The mere mention of the word “barrister” will see many people simply give up at that point. That is the reality. Access to the courts is simply beyond the means of many of our citizens. How many times have we been contacted by constituents exasperated and exhausted because their only resort is the courts but they simply cannot afford or ever imagine affording the fees of the courts? I am very proud that legislation I drafted and brought through both Houses of the Oireachtas was signed into law earlier this year. It allows for many tracker mortgage victims to go to the ombudsman to seek redress but many more want their day in court.
What if, for once, in this country the law allowed all the little people to gang together and take on the banks or whatever other institutions had wronged them? What if, for once, the law was on the side of the victims? That is what this Bill proposes to do. It is tempting to say the tracker scandal is rock bottom for Irish banks but I have been around too long to be so naive. There will be another scandal, banking or otherwise, where the ordinary citizen will be abused, stole from, hurt, or otherwise harmed. It will probably take years for the truth to come out and when it does the individual victims will be left on their own having to face the High Court on their own unless we make the changes here in this Bill. The system we have is intimidating. It is designed to put off the ordinary family from accessing the legal system. It is expensive and elitist. This Bill would level the playing field and give the tracker victims or the victims of the next scandal, and the one after, the chance to stand together against the faceless banks or whatever other body with bottomless reserves of cash they have to face.
Deputy Ó Laoghaire has outlined the content of the Bill. He has shown how the current test case system disadvantages the claimant. The main drawback is the costs associated with an individual taking a case. As the Law Reform Commission states, the test case system multiplies costs while the representative case model only provides injunctive and declaratory relief. We are proposing a better, more democratic model which would reduce the cost of litigation, reduce duplication and cost of representation and make better use of court resources, thereby improving access to justice. Put simply, if a group of people with a common grievance against a particular body or company decides to do so, they can approach the Courts Service and, if they qualify, could be considered a multi-party action. As Deputy Ó Laoghaire has outlined, ideally a change to the civil legal aid rules is in order too so that litigants with limited financial means will be able to access this new system. They are then a part of a group taking a case for justice together as a class of people. Mar a deir an seanfhocal, ní neart go cur le chéile.
This Bill is not some sort of kneejerk reaction to the tracker issue. The Law Reform Commission mapped out all these issues and this solution in 2005, in a comprehensive and well-researched report. However, Government after Government let it gather dust. When I recently asked the Minister for Justice and Equality if he planned to finally act on this report he told me, "I will continue to bear it in mind for discussion and possible action in the general context of any upcoming reforms in the civil justice area." There is clearly absolutely no Government intention to bring forward this legislation so I am proud that Sinn Féin has done so. I hope all sides can get together and carry this Bill forward, not just to Committee Stage but to passing it into law as soon as possible.
We have condemned the banks and expressed sympathy with the victims of trackers and now is the time for action. We owe it to the victims of the tracker mortgage scandal, and so many other scandals this State has seen and sometimes played a role in, to not only continue to stand up for them but to also show that we are learning lessons and changing. My party is ready to work with all sides to progress this Bill. We accept there may be legitimate concerns and there may also be some scaremongering and circling of the wagons inside and outside this Chamber. However, I have met legal representatives with more than 100 cases before the courts and it is crucially important because the victims of the tracker scandal want their day in court. I have met advocates who have victims who want to have their day in court.
The question we need to ask ourselves is whether we will make them have to take each case individually, and bear that cost, risk and pressure, or do we listen to what the Law Reform Commission said in 2005, when it wrote legislation, on which this Bill is based, to allow for multiple action, or class action, suits to be introduced in the State. The time for words is over and it is now time of action, and I ask the Dáil to pass Second Stage today. I ask Members to encourage, through their parties and groups, that it is expedited through Committee Stage so we can tell the 30,000 tracker mortgage holders that if they wish to go to court they can join another victim, or hundreds or thousands of other victims, and take on the banks, and that we in the Parliament are levelling the playing field for them.
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.
I welcome the Bill introduced by my Sinn Féin colleagues and I am pleased to be able to speak on it. As has been mentioned, the Bill replicates many of the findings and recommendations from the 2005 Law Reform Commission report on multi-party litigation, known as class actions in other jurisdictions.
The Minister and others have mentioned the current test case procedure that comes before a court, whereby the doctrine of precedent upholds the law. That is meant to filter down into other cases, but unfortunately and as has been mentioned, many people who try to access justice and the courts are inhibited and prevented from doing so because of the lack of progress on procedures we have seen in comparative European jurisdictions and also in the US. If the approach that is being proposed in this legislation is adapted and amended accordingly, it will allow for a collective multi-party approach and thereby rebalance what we are seeing in Irish society right now. We have monsters of banks that are able to absorb individuals who have little financial capacity or ability to take on anybody, even in cases of criminal matters. That is why action beyond an investigation or an exploration by Mr. Justice Peter Kelly is required and why this House should examine this Bill further.
It is important to note that as the Minister of State has mentioned, a civil law review group under the President of the High Court is looking at a range of topics, including access to class actions in Ireland. Fianna Fáil is supporting this Bill on Second Stage and would like to see it progress to Committee Stage and to pre-legislative scrutiny. It is important for the President of the High Court to expedite his investigation into this matter so that both initiatives can be intertwined in the context of improved probability of people being able to access class actions in an Irish context. As a party, we are happy to facilitate the progression of this Bill. We will support it so that it can go to the justice committee for pre-legislative scrutiny, which is an important part of oversight. If we stop the progress of this Bill at this stage, we will prevent the courts system from having an opportunity to give people the right to a class action.
This issue, which has been dealt with properly in other countries, is highly topical. It is having a daily impact on many individuals for whom access to justice is impossible. The Free Legal Advice Centres, FLAC, has highlighted Helen Hershkoff's contention that the use of the public interest litigation model has been directed towards finding a social and legal voice for the disadvantaged and other vulnerable groups. As we know, across Ireland justice on a civil basis is accessible only to those who have deep pockets. It is unfair that many people in Ireland, particularly in the financial sector at present, cannot take on those who have hundreds of lawyers. This is not how the system was calibrated from the start in this country. As Mel Cousins has mentioned, this institutional barrier is a restriction on access to justice in the courts. By blocking the Bill on Second Stage, the Minister is not providing for any proactive engagement at Government level to try to make the Bill workable in the interests of ensuring people potentially have the capacity to take class actions in the future.
I am a member of the Joint Committee on Justice and Equality, which is examining legislative proposals in this area. This Bill is particularly topical in the light of recent revelations about the banks' treatment of customers on tracker and fixed-rate mortgages. Multi-party actions could be affective in addressing institutional abuses or where faulty medical products like those mentioned earlier have affected a large number of people. At present, there is no mechanism for complainants to come together to take a united case against another party. Instead, an individual test case can be taken, even if there is no place in legislation for such a case, and the judgment in that case acts as a precedent for future legal cases. It is a question of the ability to litigate and to take on whatever the flip side is. I know we are speaking about banks and the tracker mortgage scandal in this context, but the State often uses its resources to inhibit individuals and prevent them from exercising their constitutional rights. It is important to mention that the State is a big opponent of class actions across many areas where it has failed to provide services to individuals.
It is regrettable there is no set mechanism for collective cases. This legislation seeks to change this, essentially by empowering people to come together to take class actions or multi-party actions. It is about trying to level the playing field and ensure everyone has a route to justice. The justice system must serve everyone fairly and equally, but many people are currently finding it impossible to take on big banks and corporations. It is important for the Oireachtas to move proactively to provide a procedural change that will empower individuals to come together while also acting as a deterrent to the banks. In many cases that are taken in an Irish judicial context, the banks know they can defend the indefensible and the illegal. That is happening across the board. They know that individuals will not have access to justice and will not be able to make progress with their cases to the point where they see their constitutional rights vindicated. This Bill will act as a deterrent in the white-collar sector by ensuring individuals and corporations do not undermine the rights of individuals.
We have heard at length the painful testimony of those caught up in the tracker mortgage scandal. We have heard about the isolation and vulnerability experienced by customers of banks who have been wronged and treated deplorably and who feel they do not have the power or the ability to take on the banks that make multimillion euro profits. AIB, which employs more than 10,000 people, announced an operating profit of €814 million earlier this year on the back of €1.5 billion in income. Crucially, it was revealed last year that AIB employs 114 solicitors, which is more than most practising law firms. This is an illustration of the plight of individuals when they take on conglomerates. They face barrier after barrier, and legal representative after legal representative.
It is important that we make progress with this Bill on behalf of people who are in negative equity and facing potential bankruptcy because of the criminality of the banks. In effect, the banks are a big class action in themselves. The same can be said of the State. They have limitless finance and capacity to take on individuals and appeal particular judgments. For the individual in each case, it is the difference between having a home and not having a home; or between having his or her rights vindicated and not having them vindicated. How on earth can an ordinary citizen take on a bank that has 114 solicitors? A rebalancing must occur. The Government should allow this legislation to progress to the pre-legislative scrutiny stage so that we can amend it appropriately and incorporate Mr. Justice Peter Kelly's recommendations into it. Such procedural changes should be made by this House.
Bank of Ireland, which has more than 11,000 employees, recorded a profit of more than €1 billion in its accounts for 2016. Again, there are walls of solicitors taking on vulnerable families and individuals. That is not an appropriate context for the vindication of people's rights. How on earth can families that are trying to meet all the costs already imposed on them try take on such massive organisations? Ultimately, they cannot do so. That is why we have seen the deplorable treatment of bank customers. Other examples of cases in which we could have had collective class actions were mentioned earlier. The ripple effect on the State was actually greater because issues were not settled. Butterworths Journal of International Banking and Financial Law stated clearly in a recent publication that more than 70% of EU citizens would exercise their rights with other claimants in the event of joint proceedings. It has also found that due to the pressure of mass class actions in a US context and because of the nature of US procedural law, these claims are often settled successfully, appropriately and to the benefit and vindication of the individuals in these scenarios. That is the type of rebalancing that we need to see occurring in an Irish context.
This is not just about the banks. The availability of multi-party actions will empower ordinary people who are wronged to take on huge conglomerates. We need to counterbalance the incredible power these firms possess. Individual cases can be hugely costly for litigants. The collective approach being proposed in this Bill should keep costs for individuals down. By enabling plaintiffs to play a more passive role in high-profile cases that can be enormously complex and adversarial, we will limit the extent to which they face huge public attention as individuals, which can cause enormous stress in individual family lives. There are savings for the State too. Individual cases that are taken one after another can be a considerable drain on court time and resources.
Multi-action cases could in certain cases remove this and a scenario where multiple cases are taken. There are examples where despite the precedent of the High Court and test cases, the State still appeals. In effect, it generates this Ponzi scheme that is only to the benefit of lawyers, who are the intermediaries, and not the individuals, who have seen their colleagues win test cases before them but who are left to vindicate their own rights with massive legal costs. This will provide a lesson for the State to take the individual seriously and rebalance the current inequity.
The introduction of such a system may also act as a strong deterrent against firms committing acts of wrongdoing. This would be particularly welcome in a climate where massively rich organisations have at times appeared to operate without fear of punishment or probity. This is a reckless scenario in the current Irish constitutional context where we should be vindicating the rights of individuals. In examining this area, we are guided by the recommendations of the Law Reform Commission report and the word being undertaken by the civil law reform group. However, it is also helpful to look at any other jurisdictions to see how the issue of collective redress systems is implemented. Across the EU, different countries operate different systems, common law being applied here. In the UK, for example, one party can apply for a group litigation order, GLO, or the court might order this. The application includes a summary of the request for a legal remedy as well as the number of parties affected and the common legal issue that pervades each affected party's complaint. If a GLO is issued, a group register is set up containing the necessary information, including the registration deadline among other things. The legislation, as originally drafted and reintroduced by Deputy Ó Laoghaire, goes through the different sections. There is a threshold, balancing and safety valve whereby the President of the High Court would have to approve the multi-party action. This is prudent and also provides for the authorisation of a multi-party action at quite a senior level in our judicial system. The fact that a nominated judge can give directions in certain matters for the fair and efficient resolution of a multi-party action as per section 5 is another feature. This is not the doomsday mentioned by the Minister of State, Deputy Stanton.
We need to move away from the reflective and consultative approach mentioned by the Minister of State, Deputy Catherine Byrne, so that the Government embraces this Bill, moves it beyond Second Stage and works with it and the recommendations of Mr. Justice Peter Kelly. The UK context mirrors much of what has been recommended in an Irish context. In the Netherlands, class action suits have been allowed since 2005 where a legally binding settlement can be reached between the offending party and a foundation or association with full legal capacity representing the injured parties. Similarly in France, recognised associations can take on cases for consumers who have suffered damages in some way. However, there are strict rules in that associations cannot actively advertise or seek out injured parties. The same is true in Spain where consumer associates can claim collective damages, however, there are some exceptions here that differ slightly from other countries. Ultimately, there is great variety and a great learning curve for the officials in the Department and the Minister of State, Deputy Stanton, so that they do not have to reinvent the wheel and consult for months or years in an attempt to delay this piece of legislation. If we look beyond our shores, we can see that it has worked elsewhere. It is important that the Government embraces this legislative and procedural change in the Irish context. Ideally, we should look to pick and choose what parts work best elsewhere. The European Commission has done excellent work to provide the comparator in a European context. To repeat, we should be ultimately guided by the 2005 Law Reform Commission report and the ongoing work by the civil law review group. Fianna Fáil is happy to support this legislation through Second Stage so that it can receive pre-legislative scrutiny and the recommendations of Mr. Justice Peter Kelly. We hope it receives support from both sides of this House.
On behalf of the Labour Party, I unequivocally indicate our wholehearted support for this legislation. Indeed it would be contrary to what I did two weeks ago if we opposed it because two weeks ago, I drafted a similar Bill, which had 12 sections in total with a detailed explanatory memorandum of four or five pages. It was sent to the office of the Ceann Comhairle last week and details were published in the media. It received a very hearty welcome from individuals and organisations who contacted me and other colleagues. Some people were effusive in their support. The Bill had been through a period of time in gestation with me as a practising barrister. I could not understand why the rules of court never facilitated actions that are multi-party in nature and that arise in other jurisdictions across the globe. As Deputy Jack Chambers noted, they have been permitted in the Netherlands for the past 12 years while they are also permitted in France and a number of other countries. The issue is that there are rules and regulations to circumscribe the situation, which is important. I included them in my Bill. I was prompted to get on with the Bill in a definitive fashion about four weeks ago when I heard the Chief Justice, Mr. Justice Frank Clarke, make what I believe were very welcome comments championing the principle of access to the courts, which is a well-established constitutional principle. It has been interpreted by Mr. Justice Walsh and others down through the years in respect of articles of the Constitution. This blended well with the Chief Justice's stated objectives. It blends with and is complementary to that. I have no doubt that members of the Judiciary will welcome the implementation of the objectives of multi-party actions, be they enshrined in legislation, which is the preference of the Labour Party or by a substantial amendment to the current rules of court. The Law Reform Commission report of 2005 mentioned amending the rules of court but we are 12 years down the road and the matter has not been progressed. It must get an impetus from the legislative arm of Government.
I note that Sinn Féin was aware of the existence of our Bill and I am somewhat disappointed it did not contact me because a joint approach would provide it with greater strength. I have no doubt that the amalgamation of both Bills would be good because the Sinn Féin Bill is stronger in some areas while my Bill is stronger in others. I was hoping that this is what would happen because of the era of new politics or this new political dispensation. I am not a great believer in it but so be it. It would be a more coherent and stronger piece of legislation which would be to everybody's benefit.
Over the years, I have seen members of the Judiciary trying through judicial ingenuity to deal with groups of cases such as the asbestos cases or the hip implant cases. Mr. Justice Cross was innovative in the way he tried to deal with the hip implant cases. What we are dealing with is a group of cases that share common and indeed adequate or sufficient characteristics to allow them to be dealt with collectively. Mr. Justice Cross devised such a mechanism to deal with hip implant cases. Some people may argue for alternative dispute resolution, ADR, which has been used successfully to deal with multi-party scenarios without resorting to legislation. I discovered that ADR was used to successfully resolve the issue of the unlawful retention by a number of hospitals in the UK of organs and tissue from young children. Examples of multi-party type litigation in Ireland include social welfare equality cases and the Army deafness cases. The Law Reform Commission report indicated that these cases highlighted the need for reform in this area of procedure and emphasised why reform was necessary and the case-by-case random approach with which such litigation was being treated. I am of the view that the Sinn Féin Bill and my Bill would remedy such approaches because consistency is important. The social welfare equality cases involved the implementation of an equality directive from 1978 whereby the State could not discriminate on the grounds of gender or marital status. The Army deafness cases arising in the early 1990s involved complaints of noise-induced hearing loss by former members of the Defence Forces. It eventually became clear that there was huge liability on the part of the State on the substantive issue that it was negligent regarding the prevention of noise-induced hearing loss in respect of serving and former members of the Defence Forces. The Department of Health established the expert group to determine the appropriate standard for measuring hearing loss and tinnitus arising from hearing loss.
By consent, all Army deafness claims were adjourned pending the outcome of deliberations of the expert group. Then we had the green book which gave us the measures. The Civil Liability (Assessment of Hearing Injury) Act then came out of that. The Supreme Court then set out a stream of damages with regard to that and the early settlement scheme. This is important legislation in the context of the tracker mortgages scandal and the impact it has had on the victims of illegal activity, which some of my colleagues spoke about. It is nothing short of illegal activity by the subject financial institutions. This will be important for thousands of people who have been so victimised and who will be able to join a collective action to secure their rights. It would be very important because this legislation will ensure that people of limited means or who are virtually impecunious can get access to the courts and join an action. No one will compel them to join the action. They can join it themselves. We have to be very careful. There is free enterprise and freedom of contract for every individual. There is a right to a fair hearing. The European Convention on Human Rights is also involved.
I am fully conversant with the issues that must be addressed in the context of such legislation if it is successfully implemented. That is no excuse for more delay. We have representative actions here but they are of a very limited nature. They are only declaratory or injunctive. One cannot get damages. What one could get today in terms of the bank cases, which is an absolute scandal, is a declaratory action saying specific people are entitled to something. That is not damages. The last thing they want is to have to chase around again. The test case is also limited. There are two different categories. Sometimes one can choose the most appropriate to go forward from a pool of litigants which presupposes a degree of organisation among them. Sometimes without express co-ordination the outcome of a vanguard case can be awaited by others and that will provide guidance as to the possible outcomes of later actions.
In a test case, the plaintiff acts in his or her own interest with no responsibility or duties towards the rest of the pool, either in the institution or any subsequent trial. That is important. This is critical legislation which should pass Second Stage. It should be referred to committee and undergo further legislative scrutiny. The Civil Law Reform Group and outside bodies might have an input in it. We could have a hearing on it. I am sure Sinn Féin will be eager for the Bill to go to the next step so we get an opportunity to have all the submissions from various parties. The last thing we want to do is long-finger it. It is prospective legislation. The Minister of State said it may impact actions already in being. That is not so. If it has to be prospective, so be it. The prospectivity in terms of the tracker scandal is very clear and evident. Nobody has taken an opportunity yet to take them to court and the quicker, the better.
I will start with a question. How many solicitors does AIB have? I am not talking about the hired guns they hire from outside the bank. I am talking about in-house solicitors employed by the bank. According to the Law Society, the answer to that question is 114. If one were to take those 114 solicitors, cut them adrift from AIB and set them up as a separate company, it would be the seventh largest law firm in the State. That is the little army of solicitors employed by one bank alone. What chance does an ordinary citizen have against a machine like that?
It could be argued the ordinary citizen has access to civil legal aid. In reality, for the vast majority of citizens, that is not the case. A person does not have a chance of getting civil legal aid unless he or she earns below the €18,000 per year threshold. A Bill such as the Multi-Party Actions Bill 2017, which would allow a form of class action and allow people to band together to take a joint case against the likes of a bank or powerful institution is a progressive reform. It is a step forward. It is something that Solidarity-People Before Profit will support going to the next Stage. It is not a magic wand. The legal system is very biased against the ordinary man and woman. This does not create a level playing pitch but if the Bill is passed it means the playing pitch is not as unbalanced or as tilted against the ordinary person as it was the day before.
We see what powerful institutions like banks do when they feel they have a free hand. The tracker mortgage scandal is a case in point. To date, there have been more than 27,500 cases that we know of. On account of this scandal, 23 mortgageholders have lost their homes and 79 people have lost their homes as a result of buy-to-let properties being repossessed. This was not a mistake. It is not something that was magicked up by a computer or a robot. It was a conscious cold-blooded decision made by men and women in the senior management of the banks to rob and defraud ordinary citizens and householders. If the Multi-Party Action Bill in even a small way can redress that imbalance of power and allow ordinary citizens to strike out for justice on an issue such as this, it would be a positive thing.
The Bill would not just relate to people ripped off by the banks in the tracker mortgage scandal. It would relate to people dealing with profit-hungry developers who have ripped them off on the pyrite scandal. It would also relate to the State which has treated people scandalously in the likes of the Magdalen laundries and so on. It is telling that we do not have class action legislation of this kind in the State. The absence of legislation such as this says a lot about the Fianna Fáil Party and the Fine Gael Party which have led Governments down through the years. It is shameful that the Government is setting its face against this legislation. We will not do so. We will back it and will continue the discussion on the next Stage.
Every time I hear the expression, "the tracker mortgage scandal", I cannot help thinking of the advertisement that was used to get people to buy into tracker mortgages. There are a dozen people sitting on an Imp bus going through the city of Dublin saying to each other out loud, "I don't know what a tracker mortgage is." It turns out the bankers did not seem to know what a tracker mortgage is either. However, we are in a situation where nobody can access justice against the banks for what they did to tens of thousands of people.
The main purpose of the Bill is to deal with that situation so we very much welcome it. It will benefit others who find themselves at odds with an arcane legal system that insists that even when a case affects dozens or hundreds of people, individuals must take cases separately. As Deputy Barry said, it is quite alarming that we have gone through this many decades of a so-called modern state and we do not already have that facility in law. Any bias against ordinary people taking cases, for example, against wealthy corporations, would be addressed by the Bill. Ordinary people generally do not have the ability to spend the hundreds of thousands of euro that is required to pay lawyers in this archaic legal system. This type of legislation might make it more possible for them. It will not rock the Casbah; it exists in America, but so does injustice at a high level and great scale. It will give people more access to a level playing field. There are many cases that we have seen in the United States in which people have won class actions, particularly on environmental issues, such as the community living in Love Canal. We welcome this attempt to reform a court system that was very much condemned by ourselves and others in this House earlier in the year when Deputy Jim O'Callaghan introduced a Bill which would reform the Judiciary. It will open the secret worlds of the Kings Inns and the Law Society to a certain degree. I hope it will make it financially possible for ordinary citizens to access some kind of justice in a system that continues to fail them, not only against corporations and banks but also against the State.
There are other scandals involving homes being built with pyrite and without basic fire safety measures, institutional abuse of women and children and the degradation of local communities by abuse of the environment. In that regard, I mention the communities in west Dublin where I live that put up with considerable interference from environmental companies which are so-called clean and friendly but which actually impose considerable degradation, trouble and hassle with implications for the community. Perhaps the Bill might open the way for such communities to take cases against them.
There is also the case of Volkswagen's falsification of emissions and the resulting data breach. Throughout the world people are taking actions against corporations over coal, oil, gas, etc. because environmental destruction and interference are huge issues and related to the big question of climate change. For all of these reasons, we welcome the Bill which I do not think is a revolutionary measure. If we could get justice for communities and individuals across the globe by such measures, that would be the way forward. Unfortunately, even where there are those measures, gross injustices continue to be imposed on communities and individuals. If the Bill was to allow a little more light into the judicial system and balance the scales slightly in favour of communities and ordinary people, we absolutely welcome it and will work with others to see it through.
I appreciate the opportunity to speak about the important Multi-Party Action Bill 2017 and commend Sinn Féin Deputies Donnchadh Ó Laoghaire and Pearse Doherty on introducing it. I welcome it and will be supporting it fully.
Like many other Deputies, including the Acting Chairman, there have been many times throughout my political career when I have thought that access to multi-party or class actions would be of immense use to citizens and for society at large. There have always been issues that have affected citizens very profoundly and damaged their lives and I believed they should have had the remedy of class action type legislation. As a colleague just said, these are cases in which individuals face powerful companies and corporations. The current tracker mortgage scandal is a prime example where banks illegally refused to offer tracker mortgage rates to customers in line with the original mortgage agreements. The earlier scandal of endowment mortgages where consumers were badly misled by mortgage and insurance companies would also have benefited from mass-harm legislation and multi-party actions. The Acting Chairman will remember that particular major scandal.
The huge suffering and costs imposed on households, families and local authorities after the discovery of pyrite in boomtime housing also called out for mass-harm legal remedies and class action against those ultimately responsible. Of course, there have been also many health, education, housing and other social deficiencies over the decades where deeply affected citizens would also have benefited greatly from multi-party legislation.
Many countries, in particular other common law jurisdictions, have had multi-party actions for many years. People often think first of the United States when class actions are mentioned. People remember, for example, class actions against the tobacco industry, the car industry and other powerful sectors of the US economy. Sometimes class actions have been criticised there on the grounds that the legal profession gains most from them and that class lawsuits often bind all participants in an action to a lower settlement than might reasonably have been secured in a solo action. However, the US Class Action Fairness Act of 2005 addressed some of these concerns.
In the United Kingdom the civil procedure rules of the courts of England and Wales introduced from 1999 have provided for representative actions. There is also a sectoral mechanism under the Consumer Rights Act 2015 for breaches of competition law which is very helpful for citizens.
In the Canadian provinces class actions are also permitted. Quebec began class action proceedings in 1978 and was followed by most of the other provinces. There is also multi-party action in the Federal Court of Canada. Quebec citizens were fortunate to have this legislation in place when their pyrite scandal erupted about 25 years ago. There was much more accountability there than there has been in Ireland.
Under the Federal Court of Australia Act, in 1992 Australia introduced "representative proceedings" along the lines of American class actions. In New Zealand multi-party actions can be brought under High Court rules and the emergence of litigation funders has played a major role in progressing class actions. There are also class actions and multi-party legislation in many of our European neighbours, including France, Germany, Italy, Austria, the Netherlands, Spain and so on.
In 2005 the Law Reform Commission produced a comprehensive report on multi-party litigation and, of course, many of its recommendations are reflected in the Bill. Last year I asked the Tánaiste and then Minister for Justice and Equality, Deputy Frances Fitzgerald, to urgently introduce mass-harm or multi-party legislation based on the 2005 report. As she indicated, the Government was considering this legislation; therefore, the Minister, Deputy Charles Flanagan, has an opportunity to support and progress the Bill.
The Law Reform Commission's report of 2005 followed on from its work in 2003 and is a comprehensive guide to the framing of rules for superior courts to permit class actions and the methods of funding of multi-party legislation. It cites case studies such as the social welfare equality cases and the Army deafness claims and sets out principles of procedural fairness and efficiency which could underpin mass-harm actions. It addresses key elements of multi-party litigation, including defining the common interest of plaintiffs, the characteristics of representative cases and the idea of a single or lead solicitor, which is very much reflected in the Bill. Rereading this very thorough research and the Bill which is based on it, it is difficult to understand why the past four Governments resolutely ignored the commission's report and chose not to institute class action legislation.
Outstanding work has been carried out on mass-harm and multi-party legislation by the distinguished academic Dr. Joanne Blennerhassett who lectures in the Sutherland School of Law in UCD and has recently been working in Oxford. She has researched the subject following her chance meeting with the environmentalist Ms Erin Brockovich. She focused on this lacuna in the legal system and published her research in a book, A Comparative Examination of Multi-Party Actions- The Case of Environmental Mass Harm. Her doctoral research and subsequent book examine the phenomenon of mass harm and how affected citizens may seek legal redress. The book looks at environmental mass harm as a case study and explores the best solutions for citizens to pursue legal remedies. Dr. Blennerhassett believes multi-party action may be absolutely necessary in certain circumstances where other avenues of redress have failed and that all those involved in mass litigation, the defendants, judges and the courts system, could benefit from a multi-party litigation procedure. She has been in touch with me a few times in recent years and I hope the outcome of her research will be reflected today. I am sure she is delighted that the legislation is before us.
Regarding the specifics of the Bill, section 2 outlines the application process for the certification for a multi-party action. The authors have carefully framed the section such that applicants will need to apply to the Courts Service for a certificate and to see if there have been previous relevant actions. The application must be made to the President of the High Court who will, in turn, nominate a judge to deal with the certification, following which the matter will be a multi-party action order.
Section 3 sets out the details of the order which will establish a register, specify the multi-party action issues and so on. The order will also include a direction that after a certain date a party wishing to be removed from the register will have to obtain permission from the judge. Section 4 provides for how a party will gain access to the multi-party action register.
Sections 6 and 7 make provisions for the appointment of a lead solicitor and the selection of a lead case. They are particularly well framed, for which I commend the authors. Section 6(1) states there shall be consultation and agreement on the appointment, while subsection (3) makes provision for instances where a lead solicitor cannot be agreed, in which case the nominated judge will make the appointment. Subsection (4) provides for the appointment of more than one lead solicitor should the judge decide. Section 7(2) states the lead case must satisfy the judge that it "fairly and adequately represents all interests of all those on the Register". Section 9 deals with the matter of costs incurred and indicates that the members will all be liable for these costs.
In general, the Bill is well founded on the outstanding research of the Law Reform Commission. I said earlier in the House that we should utilise the work of the commission in the codification of road traffic law. The work done here and also by the distinguished young Irish academic Dr. Blennerhassett on this legal procedure are well reflected in the Bill which the House, including Government Members, should support. We should allow mass-harm, multi-party actions to be a key legal device for citizens.
I will lead off. I would like to speak in favour of this Bill. The proposal in this Bill is broadly similar to what are known as class actions in the United States and, thus, is worth considering seriously. Clearly, there are a number of advantages associated with this form of litigation. However, there are also some disadvantages but I will deal with advantages first. As has been pointed out, multi-party actions will lead to lower litigation costs as they will be divided among the class members, thus giving people greater access to the courts. The model offers an opportunity for plaintiffs to seek relief at a lower cost. It will be much cheaper for people with limited resources to seek relief in a way that the traditional lawsuit cannot do at present. Importantly, a class action is decided in one court, leading to greater judicial efficiency. Class action litigation takes up less cumulative court time and involves fewer judges. Also, since only one decision by one court will be made, plaintiffs' recoveries should be consistent.
However, in the United States there are some noted disadvantages, one being a lack of decision-making control. Representatives of the affected class make the important litigation decisions, including when to settle. The power of the individual plaintiff to have a say in whether to settle is diluted. Also, another consideration is that cases may also settle for financial compensation of some kind, whereas if the plaintiff is seeking other types of compensation, this can be problematic. It also appears that if the class action is unsuccessful in the lawsuit, then individual class members may not have the right to bring individual lawsuits at a later date. However, on balance, the advantages appear to outweigh the disadvantages. The introduction of a broadly similar system here would give citizens an important additional instrument in seeking justice.
Deputy Ó Laoghaire has pointed out in his Bill that this could revolutionise the way courts deal with large-scale actions and could improve justice for countless people who have faced serious injustice, for example, people affected by the tracker mortgage scandal. It is quite likely that in the future large numbers of people will need to seek redress from large institutions, companies or corporations.
I remain to be convinced that our regulatory system has sufficient robust measures to protect our citizens. In these circumstances citizens may have no choice but to go to the courts, and the multi-party action model may be the way to go.
I am astounded that the Central Bank cannot even provide information to me on tracker mortgages county by county and it could not provide information to me on the number of people affected by the tracker mortgage scandal in County Clare. I was told that the Central Bank does not have the data at this granular level. In plain English, I believe this means it does not know how many people are affected by the tracker mortgage scandal region by region. At the time I put the question, the banks said 13,000 affected customers had been identified to date nationwide, the majority of whom will receive their redress and compensation before the end of the year. Since then, Bank of Ireland has said it has discovered an additional 6,000 cases where customers were due low-rate mortgages, having been told initially they were not entitled to them. Who knows what the final figure will be.
All this leads to my conclusion that affordable access to the courts for large numbers of people is highly desirable. In an age when great financial institutions can wield unscrupulous control and where the regulatory authorities seem slow to catch up with them, I welcome the introduction of this Bill.
I, too, welcome the introduction of this Bill and I compliment its authors. It is beyond time we had a measure such as this one that would make access to the courts possible for large numbers of people. Deputy Harty referred to people affected by the tracker mortgage scandal. The predatory nature of the banks, with them literally robbing and stealing from families, has gone on unimpeded. The Central Bank seems not to know or care or want to know what has happened. It is a case of just cover it up.
How could any one person or a few people take a bank to court? If we have this multi-action measure, people might be able to come together and take a case. They are up against the might of banks which can hire the best legal people and frustrate the whole system. I have been down in the courts on numerous occasions with families dealing with banks. It is a different world. I found there was muffled talk at the top of the courtroom from the justice, in some cases, and that the top row of barristers and junior counsels tend to whisper. It has been said that justice delayed is justice denied but justice unheard is shambolic justice. People cannot hear it. I was in court with a litigant and the judge beamed at the woman that she would not be allowed to speak or have any assistance. She was terrorised, like a fox or rabbit caught in the headlights of a car. I moved up the courtroom step by step, row by row, to see if I could hear anything that was going on. I was up right beside the litigant, the person being charged by the banks, who had been taken from prison that morning after being put out of her home. She had been taken up by the prison officers and had been very well cared for by them, I might add, but she was literally treated like a piece of dirt.
We need somebody to put some respect and manners on bankers and to ensure that we get some modicum of decency and respect in the courts for individuals and families. We are not getting that at this time. I know of cases where justices had to be forced off the Bench because they did not declare their involvement with certain banking institutions, and that has happened. The lid will be completely uncovered on this one of these days very soon, and we will have a much more murky situation than we have had in other sectors. I got very disturbing information over the weekend regarding issues related to the courts, which I will not go into here until I have the full facts, but all is not well down there. The Government's response to this multi-action legislation has been woolly, furry and muffled, and its approach has been to delay. It has been a case of preserve the status quo and preserve the status of what goes on down there. The little people do not matter. Let them go to hell but look after the banks and the vulture funds. We had that experience in a committee last week when dealing with the Finance Bill when we tried to put forward an amendment to put stamp duty on vulture funds where they are selling off loans at 20% and not offering them to the unfortunate householder, farmer or business man or woman concerned.
This Bill will be passed but I hope it will not then be consigned to a shelf, delayed like many other measures have been, and not enacted for several years. The Bill is very timely and appropriate. I compliment its authors.
We can look to the United States which has had class actions for a long time and the place has not fallen in, but it also has bankers behind bars. We do not have bankers anywhere other than going to the finest restaurants in the country, rubbing their hands with glee, and their attitude is to hell with the ordinary people. That is what we are dealing with. That is not what the people fought for in 1916, 1921 and 1922. That is what we have ended up with. It is a charade, a cabal. It is time we had a legislative measure like this one. I will follow it carefully as, I hope, it proceeds to Committee Stage, and I will follow its progress when it comes back to this House. I hope it will not be completely stood on and buried by the powers that be, like most other items of well-intended legislation have been.
I welcome the opportunity to speak on this Bill and to support it. I compliment Deputies Ó Laoghaire and Pearse Doherty on bringing it forward. The basis of this Bill is the Law Reform Commission report of 2005 which recommended the idea of multi-party actions or class actions as they are probably better known. Successive Governments have long-fingered the legislation and allowed the report to gather dust. Again tonight the Fine Gael-Independent Alliance Government has opposed this legislation. It is time that we had fair and equal access to the courts for everybody. That is what this legislation is about. It is about access to justice. Unfortunately, like our health system, we have a two-tier justice system. Money talks, and those with deep pockets, the wealthy, have easy access to the courts, whereas those who are less well off are effectively excluded from the system.
The question of costs is a huge disincentive to individuals who have little or no chance when they take on banks or vulture funds. Those are supported by the failings of barristers, junior counsel and solicitors. I was in the High Court and Supreme Court with a local hospital action committee a number of years ago.
We were being represented on a pro bonobasis. The HSE had numerous senior and junior counsel and a whole array of solicitors. Access to the judicial system is not available on a fair and equal basis for ordinary people in this country.
The Bill is very welcome. It will not level the playing pitch entirely but it certainly will help. It will help in cases like the DePuy hip situation, institutional abuse, and indeed the tracker mortgages situation currently being covered in the media. The tracker mortgages issue, in particular, cannot be solved or dealt with properly unless there is a criminal investigation by the fraud squad. I call again on the Government to send in the fraud squad to the banks to thoroughly investigate. There is no doubt in my mind that there has been huge collusion between the banks.
The Bill before us will, I hope, bring about a situation in which multi-party actions or class actions are available here. They have been available in other jurisdictions for quite some time. These recommendations have been long-fingered and allowed to gather dust for over 12 years. The purpose of the Bill is to provide for procedural and other changes in civil actions so as to provide for the bringing of multi-party actions and to reduce the cost of litigation. That is a very important element, particularly for individuals who want to bring cases. The Bill also provides for other related matters. The class action or multi-party action is one in which a number of people have a similar complaint, most likely arising out of one incident or set of circumstances. It is more efficient, more effective and less costly if they come together as a group and are dealt with collectively, as opposed to each case being progressed individually. The 2005 report of the Law Reform Commission recommended that there should be a formal procedure and structure to deal with instances of multi-party litigation, which should be referred to as multi-party action. In its report, the commission made a number of recommendations as to how this system would operate, and also included a draft amendment to the rules of the superior courts to provide for it. This amendment and recommendation are mirrored in the Bill that has been brought forward by Deputies Ó Laoghaire and Pearse Doherty.
I welcome the legislation and the opportunity to support it tonight. I appeal to the Government and to the Independent Alliance to allow it to go through to Committee Stage as it is a worthwhile and long overdue piece of legislation.
Go raibh maith ag an Cheann Comhairle as ucht an deis labhartha seo a thabhairt dom anocht. I am grateful for the opportunity to speak on this issue. I commend my two colleagues, Deputies Pearse Doherty and Ó Laoghaire, for bringing forward this very worthwhile Bill. It brings into effect the recommendations of the Law Reform Commission report of 2005, when the issue was examined in detail. It provides for cases to be taken on behalf of large categories of people who are affected by a particular injustice and share a common issue of fact or law. This model would significantly reduce the costs of litigation, representation and duplication. It would make better use of court resources and, most importantly, improve access to justice.
The most recent example, as mentioned by my colleagues, is the tracker mortgage scandal. The banks that knowingly caused serious financial hardship for thousands of families took a gamble. They gambled that the individuals involved would not be in a position to access justice due to the high cost of litigation and, for the most part, they were right. Unfortunately, there are many other such examples. In my previous role as education spokesperson, I dealt with survivors of sex abuse in schools, many of whom had been persuaded to drop their cases against the State after the ruling against Louise O'Keeffe in the Supreme Court. To date, only seven of these victims have been offered any type of compensation by the State. Few of them will ever see any type of justice from the courts. One cannot help but wonder how different things would have been for them if this type of action had been available. Fianna Fáil and the Labour Party have previously commented on the need for such a model in Ireland. I call on every Deputy in the House to support this legislation.
I welcome the opportunity to speak on this and commend my colleagues, Deputies Ó Laoghaire and Pearse Doherty, for bringing forward this important piece of work. I am a trade unionist, as I have said in this Chamber before. For me, there is strength in numbers and unity is, indeed, strength. It is incumbent on all of us to come together and express our support not just for the Bill but also for those outside of this Chamber who would seek to act collectively.
I do not think there is any justification for denying people what should be their basic right. Nor am I overstating it when I say that the legislation, if passed, has the potential to revolutionise the way in which the courts deal with large-scale actions. It could improve access to justice for countless people who have faced very serious injustices, such as those affected by the sodium valproate scandal, the transvaginal mesh scandal, the tracker mortgage scandal and the people in my own constituency who bought homes that were affected by pyrite.
In particular, the Bill will be of huge benefit in the area of health, for those who have been the victims of defective medical products, and patients who have suffered side effects of medicine which were the fault of pharmaceutical companies or in some instances health care providers. Currently, the only real option for those people is for a test case to proceed and then for related cases to follow, but it is all on an individual basis. They are always on their own. The model proposed by my colleagues has significant advantages over that. The primary benefit is that it will reduce the cost of litigation. It will also reduce duplication and the cost of representation. It will make better use of court resources and, crucially, will improve access to justice.
The issue of defective mesh implant devices is one I have been looking into for the last number of months. Sooner or later the HSE and the Minister are going to have to face up to and deal with this issue. There are ongoing class actions in Australia and Britain, where women are alleging that the faulty pelvic implants are causing them debilitating pain. Ireland is no different; there are such women here. Unfortunately for them, they are forced to act only as individuals and cannot come together as a group. It is when issues like this come to light, and we see failures on an industrial scale, that we can see how important it is for people to be able to act collectively, and that is what this Bill will facilitate.
I thank my colleagues, na Teachtaí Ó Laoghaire and Pearse Doherty, for bringing forward this legislation. I also thank the other parties that have agreed to support it, Fianna Fáil, the Labour Party, Solidarity-People Before Profit, Independents 4 Change and the Rural Independent Group. I wish to express my disappointment in the Government for failing to support this Bill. The Independent Alliance will also be siding with the Government in opposing it.
The importance of the Bill has come to prominence lately due to the scandalous behaviour of the banks in robbing hundreds of millions of euro from tracker mortgage customers. Banks have once again proven that they think they are a law unto themselves. At present, investigation and prosecution of white-collar crime in Ireland is practically non-existent.
Figures I received last week show the Office of the Director of Corporate Enforcement has brought no prosecutions or achieved no convictions for white-collar crime in the past two years. It seems the State is unwilling to hold the banks to account again. If multi-party lawsuits were available to ordinary citizens, it might prove to be an effective deterrent for future wrongdoings. By allowing people wronged in a similar fashion by the same defendant to pool their resources to take collective action as one makes sense and is a worthwhile initiative. It would result in lower legal costs as similar cases could be consolidated into one. It would ensure cases which are similar do not have to clog up the courts system with individual hearings. In addition, it would allow plaintiffs who individually might be scared of or apprehensive about taking action against a defendant due to the stress or cost involved, to work with others who have been wronged in the same way, as well as allowing them to access justice they might otherwise not be able to get.
As the legal maxim states, justice delayed is justice denied. Our courts system can be guilty of this at times. It is well documented that our legal system is under significant strain with a large number of cases in the courts system. Last month, Mr. Justice Sean Ryan said the Court of Appeal was coming to the point of being overwhelmed due to the number of cases waiting to be heard. Anything which can help reduce the strain on the courts system is most welcome. The Bill, which would allow for the consolidation of cases, would address this problem by resulting in fewer individual hearings, as well as being a cost-neutral solution.
I commend Deputies Donnchadh Ó Laoghaire and Pearse Doherty on introducing the Bill and stress the importance of the cross-party support it has received. I am disappointed the Government will oppose the Bill.
The essence of the Bill is about the difference between the weakness and strength. I commend Deputies Donnchadh Ó Laoghaire and Pearse Doherty on bringing it forward.
An elderly lady, who lives not that far from me, was the victim of symphysiotomy in Manorhamilton hospital many years ago. For the most part of a decade, her two daughters went around the country to solicitors and action groups to ensure their mother would get some compensation. All the time they were told they were up against the State and the HSE, which are strong, meaning it was chancy and doubtful. Over time, as they were in contact with many others in similar positions, they found many affected elderly people went to their graves but never got any compensation or respect for what had happened. That is at the core of this legislation.
Members referred to the Johnson & Johnson hip replacement case where metals from the replacements leached into recipients' bodies and poisoned them. I know people who still have the replacements but because of other illnesses cannot get them removed. Last year, a court verdict on the same issue was handed down in Dallas, Texas, which ordered Johnson & Johnson to pay $1 billion in a multi-party action. These cases can be sorted swiftly if they are done together. The Bill is about dealing with issues swiftly and properly, as well as finding the mechanisms to do that.
Several years ago I heard the economist, Moore McDowell, brother of Senator Michael McDowell, on the radio talking about the greatest revolution of the 20th century. He claimed it was not electricity or any such technological advancements, but the formation of the limited company because it removed the constraints of the family business. What he really meant was that it removed the morality behind the family business. It meant a limited company could act as a body which could stand back from humanity. That is what we see happening with large pharmaceutical companies, banks and, in some cases, the State. They stand back, not recognising the weak person also deserves to be looked after and to be nurtured by society. The Bill is about ensuring people can come together to act as one for the common good. I would appreciate if the Government would change its mind and support the Bill for that very reason.
For the second time in less than a week, I find myself in this Chamber involved in a good and important debate. I congratulate Deputy Ó Laoghaire on bringing it forward but the House is doing the Deputy a disservice because there was no pre-legislative scrutiny of this set of important proposals. It will be debated in two hours - I have ten minutes - and the committee will do pre-legislative scrutiny after a major part of the legislative procedure has been dealt with. That is wrong. This important set of proposals should have been considered by the committee, as all Government Bills have to be first. Deputy Penrose spoke about calling for submissions and so forth. Having spent five years doing this kind of work at the justice committee, I know its value and that it is extremely useful. The pre-legislative report should be brought to the House to allow all Members have the benefit of that work. However, we are not doing this and we are flying blind in many ways.
No. I am sorry but I have listened to everybody so far. It would be far more valuable if that process had happened. However, it has not. I am on the Sub-committee on Dáil Reform where I have made the point again and again that good ideas like those suggested in the Bill need to be dealt with properly. We are not doing that, however. Instead, we are doing the Bill a disservice. The Bill could have serious flaws or serious ideas but we are missing them because we only have two hours. I only have ten minutes to respond to a whole load of ideas. I would like to debate this properly, but we cannot because the time is gone in two hours. Other Bills go on for days and we can reflect upon them. That is not the case with this Bill.
The Bill's sponsors claim it is based on the 2005 Law Reform Commission report on multi-party actions. There is an important difference, however. The Law Reform Commission proposed new draft rules for the superior courts on multi-party litigation. This Bill just copies and pastes this. It runs against the preference and recommendations of the Law Reform Commission in 2005 to deal with the multi-party action issue by rules of court rather than primarily by new legislation. A most important element of the Law Reform Commission is omitted, namely, the requirement that any person joining a multi-party action scheme agrees at, or before, the time they join it on the terms of any settlement agreement. By arbitrarily repurposing draft rules of court as primary legislation, the Bill is making something of a direct legislative intervention in the internal affairs and case management of the court and in the exercise by judges of their traditional functions. Such rules, I would contend, are the sole competence of the court rule-making bodies.
We have had the opportunity to debate the Bill to some extent, while also recognising the motivation for its introduction as providing a possible means of collective legal redress for groups of people who would be affected by such issues as the tracker mortgages scandal. While opposing the Bill for the reasons set out earlier by my colleague, the Government has sought not to be dismissive of the Bill in its intent. Rather an effort has been made to point out the complex issues which need to be dealt with in ensuring we come up with a framework for multi-party actions which is right for this jurisdiction, as well as for the people who will come to rely on it. As the various exchanges have shown, even with the best will in the world, this is no easy task to complete.
We have another set of rules, the Constitution, to which no Member referred.
I apologise if I misheard the Deputy. However, it is important we refer to the constitutionality of legislation and the risks associated.
Once we contemplate reforms that relate to the administration of justice within the courts system, we have to be extra vigilant. It may well be that the Law Reform Commission's vision of a rules of court approach to the reform of the multi-party action area will continue to be the best one to take. There is no instant solution for the introduction of multi-party actions, despite how pressing the case for them may be at this time.
We now have a process available to us which can inform us on the best way in which we can progress the multi-party action issue. This also involves the Law Reform Commission intention on the existing group action approaches taken before the courts. As the Law Reform Commission recommended, any reform in this area should be based on principles of procedural fairness, efficiency and access to justice. In particular, there should be active case management of such cases by the courts in keeping with the general trend in the reform of civil procedure. The multi-party action conceived by the commission was intended to operate as a flexible tool to deal collectively with cases which are sufficiently similar.
The Law Reform Commission also recommended that a new multi-party action procedure should operate on the basis of an opt-in system whereby individual litigants would be included in the group only if they decided to join the group action. That is very different from the US class action procedure in which individuals are deemed to be part of the class action unless they opt out of it. There is much to consider in that regard.
The Law Reform Commission report of 2005 was not carried forward by the Government at the time nor by its successors. In hindsight, that was, perhaps, a missed opportunity. The hesitancy was largely driven by an underlying concern about the potential cost burden on the Exchequer given that, as the then Minister surmised, the State would be the main object of claims. However, as has been acknowledged, the relevant policy considerations have changed in the period since the publication of the Law Reform Commission report in 2005. Multi-party actions have been road-tested in several common law jurisdictions, as Members have said, including England and Wales. The referral of the question of the introduction of a multi-party action procedure in the Irish legal system for consideration by the Honourable Mr. Justice Peter Kelly as part of the review of a civil justice administration is, therefore, a timely opportunity for us to deal with the matter in its broader civil justice setting. The initiative of the Minister, Deputy Flanagan, in that regard, as agreed by Government today, meets other parties to the debate halfway. It will provide a platform to identify the various issues that need to be tackled in opening up the possibility of the introduction of a scheme for multi-party actions in this jurisdiction.
Mention has been made of tracker mortgages and I wish to respond to some points made in this regard. The fair treatment of consumer borrowers is a key requirement of the financial services regulatory framework and the Central Bank consumer protection code. That requires all residential mortgage lenders to act honestly and fairly in the best interests of their customers and not to mislead customers about the products they provide. It also requires lenders to make a full disclosure of all relevant information to a consumer in a way that seeks to inform him or her and enable him or her to make an informed decision before entering into or changing a loan or other financial services agreement.
Since 2008, the Central Bank has warned lenders of their duty to act in the best interests of their customers when recommending that a borrower switch from a tracker mortgage to another mortgage product. It announced in October 2015 that it had commenced a broader industry-wide examination of tracker mortgage related issues that covered, among other things, transparency in communication and the contractual rights of tracker mortgage borrowers. The examination is the largest review ever carried out by the consumer protection side of the Central Bank. It covered 15 mortgage lenders who may have sold a tracker mortgage product to a consumer borrower from the time the lender commenced selling tracker mortgages until December 2015. The Central Bank subsequently confirmed that tracker issues have arisen in respect of 11 of those lenders.
The second phase of the examination involved an extensive internal review of mortgage books to identify mortgage borrowers who were impacted by banks' failings. It was due to be finalised by the end of last September. However, in its latest update, published last month, on the progress of the tracker mortgage examination, the Central Bank indicated that 13,000 impacted mortgage borrowers had been identified up to that point, although it was noted that number was expected to increase, which it did, as Members know. The other two phases of the Central Bank examination cover the calculation and payment of redress and compensation for impacted customers. The Central Bank has always made clear that those phases can run concurrently with phase two, but as yet redress and compensation have only been paid to a minority of impacted tracker borrowers.
The Minister for Finance, Deputy Donohoe, met the chief executives of the five main banks at the end of October and made it clear to them that all affected customers are to be identified and the wrongs are to be put right by means of payment of appropriate redress and compensation without any further undue delay. The Government is also determined that a range of follow-up actions will be pursued to ensure banks stand by those commitments. Banks must now actively and constructively engage with the Central Bank and provide all information required within the timeline set by the regulator.
The existing supervision and enforcement powers of the Central Bank are strong and should be used to punish wrongdoing where supported by evidence. Thus far, the Central Bank has imposed a monetary penalty of €4.5 million on Springboard Mortgage Limited for serious failings in its obligations to its tracker mortgage customers. It is also pursuing enforcement investigations in respect of PTSB, Ulster Bank and others. It is also liaising with and has statutory reporting obligations to the Garda Síochána and other relevant statutory bodies in the case that information obtained by it at any stage prior to, during or after investigation gives rise to a suspicion that a criminal act may have been committed.
The Government will be monitoring the progress and outcome of that important Central Bank examination very carefully and will consider further policy actions if necessary. Some tracker mortgage customers have been disgracefully treated by mortgage lenders and many borrowers have incurred considerable loss, in particular those who have lost their homes directly or indirectly as a result of the harmful action of lenders. I assure the House that the Government is fully aware of the seriousness of the matter and wishes to have adequate redress and compensation provided to impacted consumers as quickly as possible. The Government supports and encourages the Central Bank to complete its tracker mortgage investigation as quickly as possible.
Ba mhaith liom buíochas a ghabháil le gach duine a labhair le linn na díospóireachta seo, iad siúd a labhair i bhfábhar na reachtaíochta agus iad siúd a labhair ina choinne. Is dócha go bhfuil go leor smaoineamh le déanamh againn ar an méid atá ráite anseo anocht. Táim buíoch as an tacaíocht ata faighte agam ó go leor Teachtaí. I thank the Deputies who contributed to the debate, which was a very good, constructive and detailed one. I welcome many of the suggestions from those supporting the Bill as well as some of the points made by the Ministers of State. I am encouraged that the criticisms of the Bill made by the Government are relatively easily addressed. The majority are in respect of context and approach and there is no substantive criticism of the approach or policy intended. We can take encouragement in that regard for how the Bill will proceed through Committee Stage if the Dáil supports it on Second Stage.
In respect of pre-legislative scrutiny, I half made the point on the previous occasion the Bill was discussed that Private Members' Bills can proceed to pre-legislative scrutiny after Second Stage-----
The Mortgage Arrears Resolution (Family Home) Bill put forward by Deputy Michael McGrath went to pre-legislative scrutiny after Second Stage. If the Bill receives the support of the House, it will go to the Committee on Justice and Equality where it will be subject to pre-legislative scrutiny.
It is the case. I appreciate the Minister of State is not currently a member of a committee but that step has become part of the new politics the Government is so keen to extol. It is possible for us to deal with all of the issues raised by the Government at pre-legislative scrutiny.
The first of the Government's primary objections to the legislation is that it may not be entirely suitable for the resolution of the tracker mortgage issue. We are setting up a model. I have instanced the tracker mortgage as perhaps the most obvious contemporary example of a large-scale injustice involving common issues of fact or law such that a multi-party action would be germane to and suitable for those wishing to take a case to the courts. It may not be the best approach but is a potentially suitable example. It would be for the potential litigants and the appointed judge evaluating the application to decide whether it would be a suitable approach. Regardless of whether the tracker mortgage is a suitable case and whether individuals had a case that satisfied the appointed judge, the model would still stand on its merits and have application to a wider range of areas.
The second substantial criticism is that time has moved on since the Law Reform Commission report. In reality, very little has moved on. There has been no change to relevant legislation and the Government has done nothing on the issue. There has been very little commentary about it or progress on it and there has been no relevant legislative change in Ireland. The Minister of State, Deputy Catherine Byrne, said that:
[C]onsideration 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.
That is incorrect because those developments did not occur in the intervening period. The Law Reform Commission paper specifically references those group litigation orders, which pre-date the 2003 and 2005 consultation papers. The developments, therefore, were already taken into consideration.
The third criticism offered by the Government is that the Bill may be based too closely on the proposals of the Law Reform Commission. Not much can be said on that issue.
The fourth criticism, which is in respect of the rules of court, is probably the most substantial issue dealt with by the Ministers of State, Deputies Byrne and Stanton.
A number of issues need to be addressed in this regard. The first is that 12 years have passed and neither the Superior Courts Rules Committee nor the Government has done anything about this. I received a lengthy response from the Minister, Deputy Flanagan, to the question on whether the Government had taken any action on this. The upshot of the response was, "As such, I will continue to bear it in mind for discussion and possible action in the general context of any upcoming reforms in the civil justice area." There are no plans to deal with this on the part of either the Superior Courts Rules Committee or Government. This has implications for administration, but the costs for litigants, the manner in which a case is taken and the ability of litigants to take cases clearly constitute an area of public policy. It is very clearly within the purview of this House to make decisions in this area. How else should those Members of the House who wish to advance the case for multi-party actions do so except by way of legislation?
Another point I will make is that the only reason the Law Reform Commission supports the making of these changes to the rules of court is that this was Government policy at the time. There is no legislative or constitutional requirement for it and no statement to the effect that it would be in any way problematic. I instance the fact that much legislation passed by recent Governments and more far-off Governments, including the previous Government, makes changes to the manner in which cases are heard in respect of procedure. Such legislation amounts to public policy decisions and usually contains provisions such as those found in the Civil Liability and Courts Act 2004 which made significant changes to the way in which compensation cases were managed in the courts. Section 9 includes a provision that states:
Nothing in this Act shall be construed as limiting or reducing the power of an authority, having (for the time being) power to make rules regulating the practice and procedure of a court, to—(a) make ... rules.
This legislation came from the Minister of State's Department; much legislation does. The power is given to the Superior Courts Rules Committee by primary legislation. There is nothing in the Constitution that says the rules of court are set by the Superior Courts Rules Committee. The power is given to the committee by this House because it is in the interest of the people who deal regularly with the day-to-day changes in regulation and administration. The power rests with this House. It is practice that large areas have been delegated to the committee, but there is nothing legislatively, constitutionally or otherwise restricting this House from making such changes to the way in which the courts conduct their business. If we make a decision that we want cases to be heard in this way, it is absolutely within our gift.
I wish to respond to some of the other key points raised by other Deputies and the Minister of State. The point about potential variability was raised. I believe that sections 5 and 8 and the possibility for separation of the common and the diverse issues within the case can deal with that. Deputy Harty made the point that people might not be in a position to take separate actions but, as the Minister of State has acknowledged, the model involved here is an opt-in one. Therefore, people would be at liberty to take their own cases individually if they so wished, and that option would be open to them. Deputy Penrose instanced his own Bill, which he intends to progress at some stage. We will engage with suggestions made by Deputies Penrose, Jack Chambers and Harty and other Deputies regarding amendments.
I wish to quote the remarks Mrs. Justice Denham made at the launch of the report. She said:
It is in the State's interest, and in the interest of litigants, to embrace a form of multi-party procedure.
The report does not recommend removing the current private multi-party procedures, the representative action and the test case. Rather it recommends providing an alternative, additional approach. The Report while considering the matter practically is imaginative.
That is a belief I hold. This is fundamentally about access to justice and the better administration of how cases are heard in the courts where there are large categories of people affected by an injustice. It is about giving people the tools to take cases where previously they have been prevented from doing so because of the cost of litigation and representation. The Bill levels the field in their favour, and I hope the Dáil will support it in the vote on Thursday. I ask the Government, in the spirit of that new politics to which I have referred, whether it agrees with the legislation or not, to take the view of the Dáil on board and work with the select committee to improve the legislation, bring it into line with proper legislative procedure and tighten it up.