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Consumer Representative Actions - Legislation Passed

The Representative Actions for the Protection of the Collective Interests of Consumers Bill 2023 (the "Bill") has, as of yesterday, 4 July 2023, been passed by both Houses of the Oireachtas and now awaits being signed into law by the President. Whilst various technical amendments were made to the legislation during the debates, the Bill has not been substantively changed from the draft initiated in the Dáil.

As we have discussed in our previous updates (available here and here), the Bill, once signed into law, will give effect in Ireland to the EU Representative Actions Directive (the "Directive"). This is a significant milestone as it will provide, for the first time in Ireland, for collective domestic and cross-border actions to be taken on behalf of impacted consumers in relation to infringements of a wide range of EU consumer protection legislation.

It will, however, likely be some time before such actions take off here, not least given the question of how they may be funded by non-profit 'qualified entities' in circumstances where Ireland has a continuing prohibition on third-party funding of litigation. The issue of third-party funding, and in particular the requirement of Article 20 of the Directive, which provides that Member States must ensure that the costs of the proceedings are not a bar to representative actions being brought, was raised once again in the Seanad debate yesterday evening.  The Minister responded by saying he is continuing to put pressure on the Department of Justice in relation to the long-awaited report from the Law Reform Commission in relation to third-party funding and has been told it will issue "shortly". He said that he will continue to keep that pressure on once the legislation has passed, including in relation to implementing any recommendations from the report. 

In addition, a big unanswered question remains as to which Irish body / bodies will be designated as 'qualified entities', and thus entitled to bring collective actions on behalf of consumers. As noted previously, there was a suggestion in the pre-legislative scrutiny report on the Bill that the Competition and Consumer Protection Commission ("CCPC") might be designated. That remains to be confirmed. If this were to happen, might it also raise a question as to whether regulators with competence in other relevant areas of EU law (eg, life sciences, food, privacy, financial services) might also be designated in relation to their area of competence for consistency? In any event, the legislation will not be effective in Ireland until such time as an appropriate entity is designated to act on behalf of consumers in this jurisdiction, although Irish businesses with a consumer base across the EU may still be the subject of a consumer representative action commenced in another Member State.

EU Member States, including Ireland, were required to fully transpose the Directive by 25 December 2022, to come into effect from 25 June 2023. The Injunctions Directive 2009/22/EC is also repealed and replaced as and from that date. The passing of the Bill (which is still to be signed into law by the President) is therefore well after that initial transposition deadline. Against that background, it is expected that the President will sign the legislation into law without delay and it will come into operation once commenced by Order of the Minister for Enterprise, Trade and Employment.

Separately, the European Commission has launched an online platform called 'EC-REACT' – Representative Actions Collaboration Tool, which is designed to allow the exchange of information on representative actions across EU Member States. That platform will, amongst other things, identify the qualified entities designated by each EU Member State; facilitate co-operation between qualified entities, judges and administrative authorities in cross-border actions; and allow for reporting on the functioning of the new regime.  In this regard, Article 23 of the Directive also provides for the European Commission to carry out an evaluation of the Directive no sooner than 26 June 2028 and also to evaluate by that date whether a European Ombudsman for Representative Actions should be appointed.

Should you require further information in relation to this legislation, please contact Commercial Litigation and Dispute Resolution partners Julie Murphy-O'Connor, Michael Byrne or Competition and Regulation partner Kate McKenna or your usual Matheson contact.