Dáil debates

Tuesday, 14 November 2017

Multi-Party Actions Bill 2017: Second Stage


8:20 pm

Photo of Jack ChambersJack Chambers (Dublin West, Fianna Fail)
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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.