Empty Link Skip to Content

Commercial Litigation and Dispute Resolution

This year will see the progression of civil justice reform at an unprecedented level, together with the continuing transformation of the regulatory landscape.

The Government's Justice Plan and the wide-ranging reforms recommended by the Kelly Report will continue to be implemented during 2023. This year is also predicted to see the introduction of a form of consumer class action in Ireland for the first time, which will enhance the litigation tools available for mass claims.

A continued expansion of regulatory and compliance activity is also expected through 2023, with the passing of the landmark Central Bank (Individual Accountability Framework) Act 2023, considered in detail in the section on  Financial Services Regulation,  the implementation of the Online Safety and Media Regulation Act 2022, as well as the introduction of other key new pieces of regulatory legislation.

Separately, the Irish insolvency landscape continues to evolve following the changes that were introduced by way of the Preventive Restructuring Regulations (which transposed the mandatory provisions of the EU Preventive Restructuring Directive) in 2022. Those developments, in parallel with an increasingly challenging trading environment, will require company directors to be vigilant for any signs of financial distress. 

Key Themes in Commercial Litigation and Dispute Resolution

Civil Litigation Reform - A New Era for Consumer Claims?

The most immediate reform expected in this area is the enactment of the recently published Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022,  which is required by 25 June 2023. This legislation will fundamentally alter the civil litigation landscape in Ireland by enabling consumers to be represented collectively by "qualified entities" in claims concerning a wide range of consumer-facing industries, including financial services, technology and health.

The success of the legislation will, however, depend on the ability of the qualified entities, who are required to be non-profit, to fund mass actions on behalf of consumers. This was a key concern raised in the pre-legislative scrutiny of the bill. Funding of litigation by third parties remains largely prohibited in Ireland but, as illustrated by the following, the issue remains an area of ongoing debate and review:

  • amendments have recently been introduced to the draft Courts and Civil Law (Miscellaneous Provisions) Bill 2022 to clarify that the prohibition on third party funding does not apply to international arbitration;
  • the Kelly Report Implementation Plan provides for legislation to be drafted this year to allow a limited form of litigation funding for insolvency proceedings; a similar recommendation was made in the Company Law Review Group Report (December 2021) in relation to insolvency proceedings;
  • a target date of Q1 2024 is set for the completion of a wider policy review in relation to third party funding by the Law Reform Commission and
  • in September 2022 the European Parliament adopted a resolution recommending that a new directive should be proposed to establish common minimum standards for third-party litigation funding across the EU.

Separately, the Kelly Report Implementation Plan provides for legislation to be drafted this year for the introduction of a comprehensive multi-party action procedure (similar to the Group Litigation Order process in the UK) by 2024. Collective actions beyond the consumer domain may therefore also soon become part of the litigation landscape in Ireland.

"This [Representative Actions] Directive is an important development to improve consumers’ access to justice, contribute to fairer competition, and create a level playing field for businesses operating in the internal market. It modernises the current European Injunctions regime and aims to improve tools for stopping illegal practices. Once implemented, when the rights of a large number of consumers are violated by the same business, a qualified entity can launch a representative action on their behalf before the High Court. This will be a first in Irish law, and will further strengthen consumers’ rights in Ireland and across the EU”.

Robert Troy TD, Minister for Trade Promotion, Digital and Company Regulation

Resources:

Regulatory Reform – Significant Expansion of Enforcement Powers 

Against a backdrop of a marked increase in regulatory investigation and enforcement activity through 2022, regulatory reform will sweep across multiple sectors as significant legislative changes are due to be introduced this year.

Compliance continues to be forced up the agenda for financial service providers in particular as a result of the recently passed Central Bank (Individual Accountability Framework) Act. This landmark legislation seeks to strengthen and enhance individual accountability in the financial services industry. Following its enactment, it is anticipated that the Central Bank will publish draft regulations and supporting guidance throughout this year, with a view to the commencement of the new Senior Executive Accountability Regime and Conduct Standards followed shortly afterwards.  This legislation is discussed further in our Financial Services – Regulation section.

Regulatory reform will also be central for the digital economy this year and Matheson's dedicated Digital Economy Group is monitoring these developments closely. This includes the recently enacted Online Safety and Media Regulation Act 2022, which established the Irish Media Commission (Coimisiún na Meán) to oversee a new regulatory framework for traditional broadcasting services, video-on-demand services as well as, online services, the oversight of which is included for the first time in Ireland. The Media Commission will have wide ranging investigative and enforcement powers, including the power to conduct oral hearings.

Separately, the EU Digital Markets Act, (the "DMA") which aims to foster fair competition between big-tech companies, will become enforceable in May 2023, leading to a potential rise in damages claims for infringement. This, together with the EU Digital Services Act, (the "DSA"), marks a significant watershed in digital regulation. The new Digital Services Bill, introduced as priority legislation in the Spring Legislative Programme, will designate the Media Commission as the Digital Services Coordinator for Ireland under the DSA, as well as implementing the rest of the DSA. The DSA is discussed further in our Data Protection and Privacy section.

"Today marks another milestone in our modernisation of the regulation of the media and digital services in Ireland. In the coming years, Coimisiún na Meán will play a vital role as both a regulatory body and media development agency. The Ministerial Orders I have signed today will not only formally establish Coimisiún na Meán as a statutory body, but will confer it with the powers necessary to begin the work of protecting people in Ireland as we interact with one another in the online world. We want Ireland to be known for the effective and fair regulation of media and digital services. The establishment of Coimisiún na Meán marks an important step in this direction.”

Catherine Martin TD, Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media

Resources:

Insolvency Reform - Navigating an Evolving Landscape 

Businesses are continuing to face numerous challenges, including global supply chain disruptions, higher energy prices and increasing interest rates. However, the predicted steep rise in corporate insolvencies has not yet materialised, likely due at least in part to the extension to 2024 of the Revenue Debt Warehousing Scheme and the increased threshold at which a company is deemed unable to pay its debts.

Against that background, directors' duties to consider creditors when a company is in financial difficulty have been reinforced by the European Union (Preventive Restructuring) Regulations 2022 (the "PRR") which put those duties on a statutory footing, clarifying that the duties extend to situations where insolvency is merely likely. In addition, the Corporate Enforcement Authority published an Information Note in January 2023 which sets out a non-exhaustive list of indicators of actual, or potentially approaching,  situations of financial difficulty that directors should have regard to.

Employee rights on insolvency also continue to be to the fore as illustrated by the following:

  • the Companies (Protection of Employees' Rights in Liquidations) Bill 2021, which seeks, amongst other things, to afford preferential status to employees in collective redundancy situations, is under consideration by the Joint Committee on Enterprise, Trade and Employment. This is a private members' bill. The government sponsored legislation mentioned in the following paragraph takes a somewhat different approach to the protection of employees on insolvency.
  • the Spring Legislative Programme lists two new bills addressing employee rights on insolvency as under preparation: the Companies (Administrative Governance & Insolvency Amendment) Bill and the Protection of Employees (Employer's Insolvency) (Amendment) Bill;
  • the EU Preventive Restructuring Directive included an optional extension of employee rights that is being considered by the Government as part of a wider review of the Irish examinership regime.

Separately, EU-wide insolvency changes are on the horizon following the European Commission's publication of a proposal for a directive on harmonising certain aspects of insolvency law, which would potentially affect corporate insolvencies, as well as personal insolvencies and bankruptcy law. See  Procedure 2022/0408/COD. 

"…having regard to the challenging environment within which companies are currently operating – in which increasing interest rates, significant currency fluctuations, supply chain challenges, energy pricing/supply constraints and uncertainty in the UK’s economic outlook etc. are all features – it would be responsible of directors to incorporate consideration of these matters into the review and assessment of current and future likely profitability, cash generation and capacity to discharge debts etc. as they fall due."

CEA Information Note

Resources:

 

The Latest Developments in Litigation

Read the Full Report