10 May 2024
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The Introduction of Representative Consumer Actions in Ireland

To The Point
(7 min read)

The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the Act) (which was signed into law by President Micheal D. Higgins on 11 July 2023), was commenced on 30 April 2024. The Act introduces what are commonly referred to in other jurisdictions as 'class actions' and offers new redress measures to Irish consumers, and to consumers of Irish goods and services in the EU. While debate on the funding of these actions continues, this is a further step in the enhancement of consumer rights in Ireland.

The operation of the Act 

The Act allows consumers to come together and take collective actions before the Irish High Court. Consumers can seek redress such as compensation, product repair or replacement, price reduction, reimbursement, contract termination or even injunctive relief, through bodies known as a Qualified Entity (QE). QEs will be designated by the Minister for Enterprise, Trade and Employment (the Minister). The Minister maintains a register of QEs, to be reviewed at least once every five years.

In order to obtain QE designation, the Minister must be satisfied that the relevant body is independent and non-profit making, a legal person with at least one year activity protecting consumer interests, has a legitimate interest in protecting consumers, and permits its compliance, source of funding and statutory purpose to be made publicly available. The government has now published the Form 1 for applications for QE status.

Any consumer can apply to be part of a representative action (through the submission of a Form 3) and by paying the prescribed "modest" fee (maximum €25) to the QE. Once a consumer has been admitted to a QE they will be bound by the outcome of that particular representative action.

Other notable forms introduced by way of the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (Prescribed Forms) Regulations 2024 (S.I. No. 182 of 2024) include an application to request a review of refusal of designation or of revocation of designation (Form 2), notification by a QE to consumers regarding the admissibility of a representative action for redress (Form 4), notification by a consumer to be no longer represented by a QE for redress measures (Form 5) and notification by a QE to consumers of the particulars of any redress measures ordered by the Court in the action concerned (Form 6).

It is important to note that the Act only applies to claims brought on behalf of consumers and that the types of claims that can be made by way of a representative action are limited. Examples of the types of claims allowed under the Act are general consumer, financial services, package holiday, medical device and data protection claims, among others.

Who can claims be brought against and where can they be brought? 

QEs may bring claims against "traders". The definition of trader under the Act is broad, described as any natural or legal person, private or public, that acts for purposes relating to their trade, business, craft or profession. Representative actions brought by QEs can be either domestic or cross-border. Ireland and other EU member states are required to notify the European Commission of the QEs designated to take cross-border representative actions. The Commission has set up an online platform to facilitate this notification process which will publish a list of designated QEs.

Admission of a representitative action and how the litigation operates

Before allowing a representative action to proceed, the High Court must deem the representative action admissible under section 19 of the Act and can only do so once satisfied that the applicant is a QE. If injunctive relief is sought against the QE, there is no requirement for the consumer to opt-in to such proceedings, however QEs must enter into consultation with a trader before seeking injunctive relief on behalf of consumers. 

In general terms, an individual consumer who has joined a representative action will not be liable to pay the costs of any proceedings, even if they are unsuccessful. This obligation falls on the QE, which has all the rights and obligations of a plaintiff, whereas the consumer is entitled to the outcome of any relief granted by the High Court.

Litigation Funding 

As previously discussed here and here it is unclear what impact the Act will have on the somewhat controversial topic of litigation funding in Ireland. The Act provides that representative actions may be funded by third party funders "insofar as permitted in accordance with law" which, as matters stand, is in extremely limited circumstances only. Views are awaited from the Law Reform Commission on litigation funding in Ireland, following the publication of its extensive Consultation Paper on Third-Party Litigation Funding in July 2023.

What next?

It remains to be seen what entities will apply for registration as a QE in Ireland and there may only be a small number of domestic entities that would currently satisfy the criteria. It is worth noting that a number of EU member states (Croatia, Denmark, Finland, Hungary, Lithuania, Portugal and Sweden) have already designated QEs for cross-border actions. 

The question then becomes – how will they fund these actions? 


Next Steps

For further information, please contact Caoilfhionn Ní Chuanacháin, Head of Disputes (Ireland) or Ross Shaughnessy, Associate, or another member of the Dispute Resolution Team at Addleshaw Goddard Ireland. 

To the Point 

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