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Litigation 

The civil justice system in Ireland is in the process of undergoing some of the most radical reforms seen in the history of the State.

The Government's Justice Plan 2022 (the Justice Plan) has set ambitious targets for the next three years, including improving access to justice, modernising the courts system and accelerating innovation, digital transformation and climate action across the justice sector. Separately, as part of the implementation of the landmark Review of the Administration of Civil Justice Report (the "Kelly Report"), a comprehensive multi-party action procedure will be introduced in Ireland.

The Government's drive toward reform of the insurance sector is also continuing and it is expected that its Action Plan for Insurance Reform, which was launched in December 2020, will be fully implemented over the course of the next year.

We also expect to see an imminent increase in activity in the insolvency and restructuring sector as the Government supports introduced during the Covid-19 pandemic continue to drop away.

Key Themes in Litigation

Increased Efficiencies Across the Justice System

The Justice Plan identifies a number of areas in which the Government intends to improve access to justice in Ireland, many of which are based on the recommendations made in the Kelly Report, which was published in December 2020.

An action plan to implement the recommendations in the Kelly Report was published at the end of May 2022 (the "Kelly Implementation Plan") and a Review of the Administration of Civil Justice Bill is listed for drafting. Some key procedural recommendations to note in the Kelly Report are for the development of:

  • A new streamlined discovery regime;
  • A new multi-party litigation procedure;
  • Simplified court documents and legal terminology;
  • Limitations on adjournments
  • Provisions for automatic discontinuance of cases that are not being progressed; and
  • A potential future e-litigation model including digital access to court records.

Separately, the Judicial Appointments Commission Bill, which will modernise the way in which judges are appointed and the manner in which they operate, has already been drafted and identified as priority legislation. A Judicial Planning Working Group is also reviewing the number and types of judges required to increase court efficiency over the next five years.

A significant change is on the way for consumer-facing businesses following the publication of the General Scheme of the Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022, which will allow for a form of consumer class action for breaches of a wide-range of consumer protection legislation by June 2023.

Increased efficiencies are imminent for cross-border litigation with secondary legislation being developed to implement new EU Directives that provide for the electronic transmission of legal documents and the taking of evidence between EU Member States.

"The implementation of the recommendations of [the Kelly Report] when coupled with the roll-out of the Courts Service modernisation plan should make a very significant contribution towards allowing all court users to access our Courts system in more effective, user-friendly and ultimately significantly cheaper ways"

Former Chief Justice, Frank Clarke


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Insurance Reform Continues Apace

The Justice Plan also seeks to continue the Government's drive to reform the insurance industry in Ireland. The most recent implementation report on the Government's Action Plan for Insurance Reform (the Action Plan) indicates that approximately 80% of the actions have now been delivered and the following principal actions have been scheduled for completion this year:

  1. The General Scheme of the Personal Injuries Resolution Board Bill 2022 has been published and identified as priority legislation, with the stated aim of increasing the number of cases settled by the Personal Injuries Assessment Board (PIAB) without recourse to litigation. [Notably, PIAB will be empowered to deal with a wider range of claims under the new legislation, including those related to psychological injury alone.]
  2. Provisions will be added to the Courts and Civil Law (Miscellaneous Provisions) Bill 2022 to amend the Occupiers Liability Act 1995 in order to better balance an occupiers' duty of care with the requirement for visitors to take personal responsibility and providing a broader range of circumstances where a visitor can be deemed to have voluntarily assumed a risk resulting in harm.
  3. The Competition Amendment Bill 2022, which is currently working its way through the legislative process, is intended to further protect consumers (including insurance consumers) by preventing anti-competitive practices in the industry.

Some additional objectives of note in the Justice Plan are:

  • Moves toward publication of insurance fraud data;
  • Reform of the personal injuries discount rate; and
  • Development of a new index for periodic payment orders.

The intention is to build upon what has been deemed by the Minister for Justice as the success of the Personal Injury Guidelines, which came into force last year, in continuing to reduce the cost of insurance in Ireland.

In addition, the Insurance (Miscellaneous Provisions) Bill will be progressed, which will address various matters that have arisen since the publication of the Action Plan, including requiring the Central Bank of Ireland to report to the Government on the efficacy of the proposal to ban "price walking", the practice whereby insurance premiums increase year-on-year at renewal, from July 2022.

"There is a shared determination across Government to remove the impediment that high insurance costs have on our economy and communities – on our community groups, organisers of community events and small businesses."

Minister for Justice, Helen McEntee

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Corporate Insolvencies and Restructurings Expected to Rise

The Government provided a range of supports to businesses during the Covid-19 pandemic, which are being gradually phased out. It is anticipated that the end of those initiatives, together with the continuing global supply chain disruptions and increasing interest rates, will result in an increase in corporate insolvencies and restructurings.

The Kelly Report has paved the way for the introduction of a limited form of third party litigation funding in Ireland (which is currently prohibited) for liquidators, receivers, administrators and trustees in bankruptcy to take proceedings to increase the pool of funds available for creditors. A target has been set in the Kelly Implementation Plan for Heads of Bill to be prepared in early 2023 with a view to legislation being enacted by early 2024.

Ireland continues to be a key restructuring venue for cross-border insolvencies and there is imminent legislative change in this area by way of the Preventative Restructuring Directive (2019/1023) (the PRD), which sets down minimum standards for EU Member State restructuring and insolvency laws. Certain mandatory articles of the PRD are required to be transposed into Irish law by 17 July 2022 and will necessitate changes to the examinership provisions of the Companies Act 2014 - to be implemented by way of regulations under the European Communities Act 1972. Other optional articles of the PRD are under review by the Department of Justice as part of a wider review of the Irish examinership regime.

Ireland has also recently opted in to certain technical amendments to the Annexes of the European Insolvency Regulation 2015/848 ("EIR Recast") on the recognition and enforcement of cross-border insolvency proceedings between EU Member States. The amendments accommodate changes to restructuring procedures in certain Member States since EIR Recast was implemented.

“One of the biggest challenges facing these, and other businesses, over the coming months will be discharging their current Revenue debts as they fall due together with the payment of the warehoused liabilities."

Declan Taite, Kroll

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"The implementation of the recommendations of [the Kelly Report] when coupled with the roll-out of the Courts Service modernisation plan should make a very significant contribution towards allowing all court users to access our Courts system in more effective, user-friendly and ultimately significantly cheaper ways"

– Former Chief Justice, Frank Clarke

 

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