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Out-Law Analysis 6 min. read

Mass actions reform in Ireland anticipated with new Bill

Draft legislation introduced in Ireland could drive an increase in mass consumer claims and have an impact on financial services firms in particular, though a complete shift to a US-style system of opt out class actions has not been proposed.

The General Scheme of Representative Actions for the Protection of the Collective Interests of Consumers Bill was published earlier this year by the Department of Enterprise, Trade and Employment. Once enacted, the Bill will allow so-called ‘qualified entities’ to bring a representative action against businesses on behalf of impacted consumers for breaches of a wide range of consumer legislation. Financial services legislation, both EU and Irish domestic implementing legislation, has been specifically identified as being in scope of the Bill.

Background to the Bill

The Bill proposes to give effect to the EU Directive on Representative Actions, which came into force in December 2020 and must now be implemented into the national laws of EU member states. Both the Bill and the Directive reflect the European Commission’s commitment to provide for a more robust framework of mass consumer rights protection. 

The Bill is at a very preliminary stage and will be subject to review and input by both the Dáil and the Seanad – the Irish houses of parliament known as the Oireachtas. However, the Directive is required to be implemented into Irish law by 25 December 2022, with the resulting measures to be applied from June 2023 at the latest, and so we expect that the Bill will be considered and debated relatively quickly.

The main provisions of the Bill in its current draft are set out below. 

Qualified entities

As required by the Directive, a qualified entity must bring a representative action under the Bill on behalf of impacted consumers. Qualified entities are likely to be consumer or trade organisations, or public bodies. Their role is central to the consumer protection focus of the Directive – for example, individual consumers will not generally be liable for any costs.

The Bill provides for two categories of qualified entities: qualified entities to bring cross-border representative actions; and qualified entities to bring domestic representative actions. The minister for enterprise, trade and employment in Ireland may designate a qualified entity as such if the following criteria is met:

  • An organisation has a minimum of 12 months public activity in the protection of consumer interests;
  • Its articles of association demonstrates that it has a legitimate interest in protecting consumer interests;
  • It is non-profit making;
  • It is solvent;
  • It is independent and not influenced by persons other than consumers, in particular by traders and funders; and
  • It makes publicly available on its website in plain and intelligible language that demonstrates its independence and public activity in the protection of consumer interests, and explains the sources of its funding and its structure.

These criteria equally apply for qualified entities taking domestic representative actions, cross border representative actions, or both. This demonstrates that the Irish legislature intends to take a consistent approach for all qualified entities, notwithstanding that the Directive gives member states flexibility as to the criteria that would apply for qualified entities taking domestic representative actions only.

In the event that a number of qualified entities bring a singular representative action, one qualified entity will be nominated to lead the conduct of the representative action. All qualified entities will be bound by the outcome of the proceedings.

It is not clear yet which entities the minister might designate as qualified entities. Ireland has a wide range of sector-specific bodies which might play a role, such as the Financial Services and Pensions Ombudsman, the Central Bank of Ireland, the Data Protection Commission, the Commission for Communications Regulation and the Competition and Consumer Protection Commission.

Scope of the Bill

According to the Bill, designated qualified entities will be able to bring representative actions if the underlying claims relate to a breach of any one of 66 pieces of EU law, together with their implementing domestic legislation. Examples of the legislation in scope of the Bill include rules concerning defective products and unfair terms in consumer contracts, as well as misleading marketing communications and consumer credit. The Bill applies to both domestic and cross-border infringements. 

The Bill, once enacted, will sit alongside Ireland’s pre-existing “test case” regime which allows multiple plaintiffs to pursue similar claims against a single defendant or group of defendants, and Ireland’s representative action procedure.

Procedure and redress

The Bill provides that the qualified entity will be afforded all existing rights and obligations associated with claims brought by individual claimants, which include by way of example, rights and obligations relating to interrogatories, discovery and inspection.

A qualified entity may seek injunctive relief and/or redress measures from the High Court when seeking redress on behalf of consumers.

When seeking an injunction, which includes interim, interlocutory and permanent injunctions, a qualified entity must first enter into consultations with the relevant trader with the express purpose of having the trader cease the infringement. If the trader has not ceased the alleged infringement within two weeks after the conclusion of any such process, including refusal, the qualified entity can immediately bring a representative action for injunctive relief.

Consumers are not required to opt-in for the purposes of a qualified entity seeking injunctive relief. When seeking an injunction, qualified entities are also not required to prove actual loss or damage by individual consumers or indeed intent or negligence on the part of the trader.

When seeking redress, a qualified entity may only proceed if consumers have suffered material loss or any adverse consequence arising from an alleged infringement by a trader of any of the legislation identified in the Bill. Redress measures include remedies such as compensation, repair, replacement, price reduction, contract termination or a refund as far as available and appropriate under Irish or EU law.

Unlike injunctions, a consumer resident in Ireland or in another member state who wishes to benefit from a representative action for redress must opt in by writing to the qualified entity. They can do this at any time until the defendant trader has entered an appearance to the proceedings. If the consumer has not opted in by that time, they will not be represented by the qualified entity and cannot benefit from any remedies subsequently obtained in respect of the representative action. This applies to both domestic and cross-border representative actions and will provide comfort to traders that Ireland does not intend to adopt a “US style” opt out class action procedure.

Statute of limitations

The relevant limitation period under the Statute of Limitations will be suspended when a pending representative action is started.


A consumer may be charged a “modest entry fee” in order to be represented by a qualified entity. The costs of the representative action will be borne by the qualified entity and not the individual consumer it represents. However, the Bill provides that the High Court may make a partial costs order against a specific consumer for the costs incurred by any party as a result of intentional or negligent conduct by that consumer. 

The Bill also provides that the normal rules in Ireland concerning the award of legal costs will apply. This means that the costs of the proceedings are left to the discretion of the court in the exercise of its powers under the Legal Services Regulation Act 2015 and Order 99 of the Rules of the Superior Courts. As such, it is likely that in most cases costs will follow the event, i.e. an order for costs will be awarded to the successful party.

Third party funding

The Bill does not interfere with Ireland’s current stance that third party funding is generally prohibited under Irish law, subject to limited exceptions. It does provide that where a representative action for redress is funded by a third party insofar as permitted under Irish law, the court must ensure that any conflicts of interests are prevented and that funding by third parties that have an economic interest in the outcome of the representative action does not divert the action away from the protection of the collective interests of consumers.

It will be interesting to see whether the Bill has been drafted in this manner to facilitate future legislative changes which may occur in respect of third party funding, in light of judicial and third party commentary recommending the broadening of third party funding principles in Ireland.

ADR and settlement agreements

The Bill allows for parties to engage in alternative dispute resolution and to settle any representative action. Any such settlement is subject to the approval of the High Court and, if approved, will be binding on the qualified entity, the trader and the individual consumers concerned. The court must refuse to approve any settlement which contains terms which appear to be unfair.

Next steps

Notwithstanding the fact that the Bill is at a very preliminary stage and may be subject to amendment as it proceeds through the legislature, its publication provides some clarity on how Ireland intends to implement the EU Directive on Representative Actions.

The Bill could be amended as it passes through the Oireachtas, and further regulations addressing issues such as the application process for becoming a qualified entity and the maximum “modest fee” to be payable by consumers are expected. It is also likely that new rules to be published by the Superior Courts Rules Committee will address procedural issues relevant to the operation of representative actions in practice.

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