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Ireland: The EU Directive on representative actions

01 February 2023

There is no statutory process for group actions in Ireland. An action can be brought be way of representative action or by way of test cases, although test cases have no formal footing and the term is largely colloquial.

Representative Actions

Pursuant to the Rules of the Supreme Court: Where there are numerous persons having the same interest in one cause or matter, one or more of such persons may sue or be sued, or may be authorised by the Court to defend, in such cause or matter, on behalf, or for the benefit, of all persons so interested.

In cases of wrongful death the Civil Liabilities Act 1961 s48 allows dependants of the deceased to be represented by a Plaintiff who can bring action against a defendant.

Representative actions have to show a "common interest, common grievance and relief in its nature beneficial to all". Representative actions do not extend to claims in tort (Moore v AG) unless for injunctive relief and are usually found in cases brought by the beneficial owners of property (often by shareholders).

To commence a representative action you must make an application to the Court. It has to show that there is a common interest and application has to be grounded on affidavit with authority clearly given on the indorsement of claim from each represented party.

Test cases

There is no formal mechanism surrounding test cases. The Court has jurisdiction to stay similar proceedings if it is faced with a sizeable number of almost identical claims. The Commercial Court did this when faced with 50 cases against Bernie Madoff brought by shareholders and funds. Two of the Shareholder cases and two of the cases brought by funds were heard in sequence to act as test cases.

FBD business interruption test cases are the most high profile recent examples. Cases were taken by Hyper Trust Ltd (t/a as the Leopardstown Inn); Aberken Ltd (t/a as Sinnotts); Inn on Hibernian Way Ltd (t/a as Lemon & Duke); and Leinster Overview Concepts Ltd (t/a as Seán’s Bar). The cases were taken against FBD for recovery of losses for business interruption arising out of Covid-19.  Test cases do not bind any parties and if there are unique facts then a trial can still go forward. For example in the Lemon and Duke case v FBD the operators of Lemon and Duke had purchased their insurance policy after Covid-19 broke out and as such their facts were slightly different. No party is bound by the findings in a test case but in reality most defendants will seek to settle if the finding against them has been adverse.

Is a disclosure and/or discovery mechanism given in the group action regulation?

There is no specific disclosure or discovery mechanisms outside of the general court procedures which do apply.

How easy is it to access litigation funding?

Third party funding is prohibited in Irish law under Maintenance and Embracey Act (Ireland) 1634. This has been affirmed in Persona Digital Telephony Ltd & Another v Minister for Public Enterprise & other [2017] IESC 27. The Only way it is allowed is if the third party has a legitimate interest in the case. An example of this is shareholders or creditors of a company involved in proceedings (Thema International Fund v HSBC Institutional Trust Services (Ireland) Limited [2011] 3 I.R. 654.

In the Persona case Clarke J did leave open the possibility for third party funding if it contravened a plaintiff's right to access the Courts but there has been calls for legislative action on this.

The EU Directive will allow a 'qualified entity' to bring an action on behalf of consumers. The directive requires each Member State to designate at least one ‘qualified entity’ to bring actions on behalf of consumers. Qualified entities, such as consumer organisations, will be empowered to bring collective action cases on behalf of consumers for alleged breaches of a wide range of EU Directives and Regulations.

How this is funded is yet to be seen The Directive leaves open the possibility of such funding in representative actions, subject to the laws of each Member State. Significantly, the Representative Actions Bill 2022 does not explicitly prohibit third party funding. Rather it states that where a representative action is funded by a third party, insofar as it is permitted under Irish law, the Court shall ensure that any conflicts of interests are prevented and that funding by third parties that have an economic interest in the bringing or the outcome of the representative action does not divert the representative action away from the protection of the collective interests of consumers.

Are there group action opt-out procedures in place?

The Court is strict on the need for each party to have clearly opted in. this will have to be contained in any application.

What is the status of the implementation of the EU’s Representative Action Directive?

Draft bill was published in March 2022.  The Directive itself was published on 4 December 2020.

Ireland and the other Member States are required to adopt implementing measures by 25 December 2022, with the measures applying from 25 June 2023.

To what extent are ESG and related commitments prevalent within large businesses ?

ESG is central to business and all organisations in Northern Ireland.

Click here to go back to the EU Directive hub

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