Seanad Éireann debate -
Thursday, 29 Jun 2023

Táim an-sásta a bheith sa Seanad chun an Bille tábhachtach seo a mholadh. The Bill transposes Directive (EU) 2020/1828 of the European Parliament and the European Council of 25 November 2020 on representative action for the protection of the collective interests of consumers. This directive requires member states to have a mechanism for consumers to seek collective redress when they claim to have been harmed by a business through breaches of certain EU consumer laws. The directive aims to ensure that consumers have access to an effective means to stop and remedy mass harm situations for breaches of these EU rights by traders.

No new consumer rights are created in this Bill and no new liabilities are placed on traders. The legislation will allow consumers to opt into a collective action and seek redress as a result of a trader's breach of their rights. Transposing this directive into our existing common law system is complex for several reasons. First, Ireland is required to create a new procedural mechanism for representative actions brought by groups of consumers. This will be the first time consumers can be represented collectively in an Irish court by a designated not-for-profit organisation. Second, the qualified entities that will bring the action on behalf of consumers will be non-profit organisations, meaning they must bear the cost of bringing the action, including paying their legal fees so the consumers and not the entity will obtain the benefits of any court order. Third, the directive applies to consumer rights set out in 66 distinct EU laws. This long list comprises a broad range of sectors from financial services to travel to data protection.

The transposition deadline for this directive was 25 December 2022. Unfortunately, we are late in doing this. Ireland, along with the majority of member states, did not meet the December deadline and the European Commission has commenced infringement proceedings. The Bill allows the Minister for Enterprise, Trade and Employment of the day to designate organisations as qualified entities to represent consumers. Organisations that apply to be designated will need to meet strict set criteria, such as being independent in their activities, having a track record in representing the interests of consumers and be operating on a non-profit basis. The Department and the European Commission will publish a list of qualified entities designated in Ireland and all member states retrospectively.

The Bill provides for a comprehensive designation process and monitoring of qualified entities and also requires qualified entities to publish information about their activities, funding and past and future cases so consumers can have confidence in the entities who will represent them and their interests.

Qualified entities will only represent consumers who have opted to join an action. No consumer will be forced to be part of any action and consumers who join an action will be entitled to redress obtained by the qualified entity. Qualified entities will be able to seek injunctions or redress measures or both for consumers. Redress measures can vary from repair, to compensation, to replacement. Consumers will receive the direct benefit of any redress measures granted in court. When this legislation is in place, the High Court can hear domestic and cross-border representative actions brought by qualified entities designated in Ireland and in member states. In a representative action, a qualified entity will take the role of the plaintiff or claimant party and will have all the rights and obligations of any plaintiff bringing an action before the High Court. As is currently the case, the High Court will have the power to grant both injunctive relief or redress measures or both where it considers either of these measures to be justified, as well as having the power to strike out unsubstantiated claims. All representative actions will be heard before the High Court because of that court’s experience of managing and directing complex multiparty cases. I am satisfied that the High Court will perform a vital role in ensuring that collective consumer grievances are dealt with in a way that ensures that consumer rights are vindicated and traders avoid dealing with unsubstantiated or vexatious cases.

I am mindful of the restrictions which apply to accessing third-party funding for litigation in Ireland and the implications this has for how the legal mechanism can be used by qualified entities in due course. The common law offences of champerty and maintenance prevent the funding of a civil action by uninvolved third parties. The report of the review of the administration of civil justice - the report by Mr. Justice Peter Kelly - considered whether these rules should be removed in whole or in part. It recommended a policy review of the matter. The issue is currently under consideration by the Law Reform Commission. In response to my queries, the Minister, Deputy McEntee, informed me that a paper may be published shortly. In this context, I wrote to the Minister of State at the Department of Justice, Deputy James Browne, explaining how the current restrictions make it very difficult for a qualified entity to source the necessary funding to launch a representative action. The Minister for Justice has asked the Law Reform Commission to examine a very complex issue; I am keen to see its report issued in due course. There is a risk that by making limited amendments to the current rules on champerty and maintenance, this could have unintended consequences. I am anxious to see the law in this area reformed in a coherent way, in order that the measures set out in this Bill will be more likely to be taken up. While these matters are the policy responsibility of the Minister for Justice, I have agreed to attend the Oireachtas Joint Committee on Enterprise, Trade and Employment again in six months, if invited, to report on progress of how the legislation is being implemented. However, in order to meet our transposition obligations for the directive, I did not have the available time to wait for the outcome of the review of third-party funding before tabling today's Bill.

This Bill is divided into three parts and contains 34 sections. It also contains a significant Schedule of relevant enactments. I will now set out some of the main components of the Bill. Sections 1 to 6, inclusive, of Part 1 provide for standard provisions such as the Short Title, definitions, regulation-making powers and the scope of the Bill. Section 7 of Part 1 deals with expenses incurred by the Minister for Enterprise, Trade and Employment in the context of the Bill. Part 2 deals with qualified entities and, among other matters, allows the Minister, in section 8, to designate organisations as qualified entities if they can meet the designating criteria in the Bill. The Minister may refuse designation in section 9, revoke in section 11 and review in section 13, a qualified entity’s designation. Section 15 of the Bill provides that the Minister can also request further information, or, under section 10, issue a directions notice, if it seems that a qualified entity no longer complies with any of the criteria for designation. In section 12 of Part 2, qualified entities can make representations if they are notified that the Minister intends to refuse or revoke designation. Section 14 of Part 2 provides that qualified entities may also seek an independent review of the refusal or revocation. Section 18 of Part 2 requires qualified entities to publish certain information on their websites about their structure, remit and past and future representative actions. Section 16 of Part 2 requires the Minister to establish and maintain a register of qualified entities in Ireland. Once designated by the Minister, a qualified entity will be permitted to bring a representative action in Ireland and before the nominated courts and administrative authorities of all other EU member states.

Part 3, among other matters, allows only qualified entities designated in Ireland or another member state to bring a representative action before the High Court under section 19. Section 20 provides that multiple qualified entities can join together to take one representative action. Section 21 sets out that before seeking an injunction against a trader, a qualified entity must attempt to enter into consultations with that trader to resolve the issue so that the trader is given an opportunity to cease a practice before the case is formally brought before a court. This Part sets out the mechanism for disclosure of evidence between the parties, in section 34, and for the High Court to deal with injunctions, redress measures, settlements and allocations of costs in representative actions under sections 23, 26, 30 and 31. Where the Bill is silent on any issue, existing High Court rules, orders, practice and procedure will apply in the normal way. Where a consumer opts to join a representative action, section 24 of the Bill sets out the steps a consumer must follow in their request to be represented by the qualified entity. Section 25 provides that consumers must also declare that they have not already received redress from the same trader for the same issue. Joining an action will preclude a consumer from receiving double compensation by separately bringing their own action against the same trader for the same cause of action. Consumers may be charged a modest fee when joining a representative action and a cap on such a fee will be set by regulation under section 29. Section 27 requires that certain disclosures be made to the High Court about the qualified entity’s funding at the commencement of the case to satisfy that no potential conflicts of interest arise. The time periods for the Statute of Limitations are paused for the duration of the representative action and are set out in section 28. In section 32, arrangements are set out to deal with the admissibility of the decisions of courts in other member states. Part 3 of the Bill allows, in section 33, for the court to order that the outcomes of representative actions are published by the trader or qualified entity, and, if compensation is to be paid to consumers, how and when they can obtain that compensation.

In spring 2021, the Department commenced a public consultation on how the directive should be transposed. While much of the directive is mandatory in nature, some elements of the detail of transposition provide member states with a degree of discretion on how to do this. Comprehensive submissions were received from industry representative organisations, consumer representative organisations and legal and insurance firms. These submissions - with different perspectives - informed the policy decisions taken by the Department when transposing those discretionary elements of the directive. The Oireachtas Joint Committee on Enterprise, Trade and Employment held hearings on the general scheme of this proposed legislation in June and September of 2022. The committee identified a known limitation in the Bill, which I referred to earlier, in relation to the lack of provision for litigation funding. As I already mentioned, the broad issue of third-party funding of litigation is within the policy remit of the Department of Justice and work is under way in that context. I reiterate that I wrote to the Minister of State at the Department of Justice, Deputy James Browne, with responsibility for law reform on 20 September 2022, and underlined the importance of reform in this area in support of consumers exercising their rights through a qualified entity under this legislation. In his response, Deputy Browne, and in a further response, the Minister for Justice, Deputy McEntee, noted the matter as important and informed me that the Law Reform Commission is reviewing the current situation and its report will be published shortly. The issue of third-party funding is hugely complex, as I already said. It is right and proper that the Law Reform Commission, and, in due course, the Minister for Justice, be given time to consider these issues.

I interrupt the Minister of State, Deputy Calleary, to welcome the said Minister of State, Deputy James Browne, to the Chamber. He is with a United Nations grouping that is working on the issue of sustainable development.

They have been in Enniscorthy in recent days. We welcome them to the House along with Councillor Barbara-Anne Murphy. I thank them for being here.

I welcome the Minister of State, Deputy Browne, and Councillor Murphy. He is welcome to give this speech.

The legislation is good news for consumers. It is equally good news for business because it recognises responsible traders and holds to account those traders who flout consumer protection laws. I am confident that once the legislation is enacted, it will strengthen consumers' efforts to correct malpractice by traders. It will do so by providing consumers with a mechanism to take a collective action against an errant trader. I commend the Bill to the House.

I welcome both Ministers of State to the House. It is nice to have the two Ministers responsible for the introduction of the Bill in the Chamber. There are no excuses for any more delays. I welcome Councillor Murphy as well.

The EU already boasts some of the most stringent consumer protection regulations in the world. Recent incidents such as the dieselgate scandal, however, have revealed the challenges in fully enforcing these rules. In response, the EU has introduced a new law spanning all member states to address mass breaches of consumer rights committed by private companies, including the 2015 car emissions scandal and the 2017 mass flight cancellations.

The Bill enables multi-party qualified entities to collaborate and represent European consumers who have suffered harm as a result of alleged violation by traders in multiple member states. It is important to note that these measures do not burden businesses with additional administrative requirements and do not impact the majority of traders, who provide good customer services. As the Minister of State noted, the European Commission launched a new deal for consumers package back in 2018, with the aim of facilitating co-ordination and effective action among national consumer authorities at EU level. The purpose is to enhance public enforcement action and improve consumer rights protection. The Bill will implement this directive, which is a welcome development. As the Minister of State observed, we are already behind time in introducing it. I thank him and his officials for bringing forward the Bill.

I will be brief. I welcome the Minister of State, Deputy Calleary, to the House. He stated that the Minister of State, Deputy Browne, who was present, needed time to consider the Bill. We should have asked him which areas he considered.

The Bill is welcome news for consumers, as well as for traders. Good traders who practise well and within the law have nothing to worry about here. The Bill pertains to traders who do not take that approach. As stated, the EU has some of the strongest consumer rights laws in the world. That does not mean they cannot be enhanced further, however, which is what the Bill attempts to do. It is about trying to protect the rights of consumers, regardless of where they are in the EU, with alignment across all EU members. From a business perspective, it is important to recognise there is no extra red tape or administrative burden on businesses.

I compliment the Department and the Minister of State on the work that has been done on the Bill. In the context of stakeholder engagement, it is important that this has not just been done by the Minister of State and his Department. They reached out and got submissions from organisations and representatives regarding how best to do this. That was the right approach to take.

There will be few objections to the Bill, although I suspect amendments will be tabled when it comes before the House next week for Committee Stage. I look forward to discussing it in more detail on that Stage. In the broader sense, the Bill must be welcomed. I look forward to working with the Minister of State in the coming week.

As always, it is good to see the Minister of State. Sinn Féin supports the Bill, albeit with reservations as we believe it only does the bare minimum required. It is another Bill deriving from an EU directive aimed at protecting the collective interests of consumers. Prior to that EU legislation, there was no tool across the EU to allow consumers in mass harm situations to litigate and be represented in large groups by another entity. The tracker mortgage scandal here in Ireland is an example of a group of people who were treated badly by Irish banks but were denied access to justice simply due to the high costs involved in taking cases to the courts. This directive being transposed should mean that, for the first time in Irish law, a group of consumers will be able to take an action through a qualified entity as it creates a process for groups of consumers to enforce their rights.

The Law Reform Commission has had concerns in respect of this area of law since 2005. Sinn Féin has been campaigning for the introduction of a comprehensive multi-party action system. In the previous Dáil term, my colleague, Deputy Ó Laoghaire, then Sinn Féin spokesperson on justice, introduced the Multi-Party Actions Bill 2017. In January 2018, the European Commission published a report and study on collective redress mechanisms in member states. It found there was "no dedicated mechanism for bringing collective claims in Ireland" and continued: "Rather, mass claims are dealt with under the general rules of civil procedure which only allow for collective claims in very limited circumstances." The transposing of this directive is welcome. Sinn Féin believes there is scope for the Bill to broaden the narrow interpretation of the legislation rather than having a Bill that just does the minimum that is required. Ireland has been found to be severely lacking in providing fair access to multi-party action compared with other jurisdictions. If the Bill is not strengthened, it may continue to be found lacking in that regard.

I wish to be clear that in advocating for a comprehensive multi-party action procedure, Sinn Féin seeks reforms that are carefully balanced. It is important to prevent spurious and excessive litigation but we cannot let that fear prevent us from going a little further and broadening the Bill sufficiently to capture those who need access to justice. The legislation places considerable administrative burdens on the qualified entity. My colleague, Deputy O'Reilly, tried to bring forward amendments to improve the Bill in that respect. We will likely bring forward similar amendments on Committee Stage here in the Seanad. It is important that we use this opportunity to ensure the Bill goes far enough to fully transpose not just the bare minimum of the directive, but also the spirit and intention of the legislation in providing fair access to justice.

I thank the Minister of State for coming to the Chamber. The Labour Party very much supports the Bill and its intent. We have been awaiting it for quite some time. Its importance is evident when one considers how badly served groups of consumers in this country were for several decades, particularly in the context of insurance and banking.

The issue of qualified entities came up in pre-legislative scrutiny. The Oireachtas Joint Committee on Enterprise, Trade and Employment submitted a recommendation in respect of defining qualified entities in the legislation. I know there is a commitment to secondary legislation but the rationale for separating out that process is not clear. It is regrettable that the opportunity to set out that qualified entity has not been taken, particularly given the importance of ensuring the right to take this action. That is narrowly defined in the Bill, and to a certain extent the Labour Party agrees with that in the context of precluding vexatious claims, but if there is confusion regarding who can take action, as well as the administrative burden of detailing who is or is not a qualified entity, that will mean the legislation is weaker than it needs to be.

Probably the most profound point to be made in respect of the Bill relates to the fact that the directive was transposed in 2020, three years ago. There is nothing new about directives being late in their transposition. The Minister of State made the point that the Government is under pressure to transpose it but we need to ask why it is being rushed through while a report is being prepared by the Law Reform Commission. I very much welcome his indication that the report is due in the coming weeks. I did not catch all of his contribution. There may be a proposal to delay Committee Stage until after the report is furnished.

I think it would be madness now to proceed to the next Stage of this Bill in the absence of the report from the Law Reform Commission. Ultimately, we want this legislation to work, but what is the point in acknowledging that not-for-profit organisations or other organisations representing groups of consumers should have a right to take legal action, when they do not have the mechanism to be able to raise funding? There is a very significant gap in the Bill. In that context, I ask that we would pause the passage of the legislation through this House until we have sight of the Law Reform Commission's report, to allow then for amendments on the part of the Minister but also on our part to ensure we get legislation that is fit for purpose.

Gabhaim buíochas leis an gceathrar Seanadóirí as a ráitis. I thank the Senators for being here on a Thursday and for their contributions. Senator Sherlock did not miss the substance, but I think it is important that we proceed, and that we have this Bill in place. We are continuing to place pressure on the Department of Justice. Senator Gavan referred to the Multi-Party Actions Bill 2017 introduced by Deputy Ó Laoghaire. There was also a report on multi-party litigation in 2005. It is frustrating. I share Senator Sherlock's frustration, but I want to get this legislation in place. Equally, we are keeping the pressure on. The Minister of State, Deputy James Browne, is in the Gallery, so there is a sense of the pressure here. He is getting that pressure from me. In fairness to the Minister, Deputy McEntee, literally in her first week back she responded to the pressure that we even put on her last week to get a sense of it. What she did say to me is that it will be due in the near future. We did not mention weeks, just for clarity and in fairness to her.

Senator Sherlock is correct: I want to get this issue of funding resolved because I think it will make the Bill much more effective and more relevant to consumers. I want to have the Bill in place when this is resolved so that consumers can hit straight away.

In terms of the whole area of multi-party action, Senator Casey referred to dieselgate. Senator Gavan referred to mortgage issues and tracker mortgages. We could speak to so many more. We will continue, with the legislation in place.

I do not know if Senator Sherlock picked up on the commitment I made to go back to the Oireachtas joint committee in six months in regard to the pressure we are putting on funding. I will be keeping the pressure on the Department of Justice to get this resolved.

I am loath to use a car reference in the context of Senator Casey's comment, but this Bill is the engine and we need the engine in place before we can get it moving. I think this is the engine.

We dealt with Deputy O'Reilly's amendments, many of which had to do with the whole area of champerty and of this space. We can tease those through again next week.

I thank Senators, the Leas-Chathaoirleach and the Seanad team. I thank the officials in my Department who are here with us. They have put a huge amount of work into this Bill over the past seven or eight years and I thank them for that.