Discussions about the introduction of a class action procedure in Ireland have been very much on the agenda in recent weeks amidst the tracker mortgage scandal. A private member’s bill on multi-party actions, the Multi-Party Actions Bill 2017, was introduced and debated in the Dáil in November 2017 and although opposed by the Government, the matter of class action lawsuits was referred to Mr Justice Kelly for consideration as part of the Review of Civil Justice Administration.
Under Irish law as it stands, multi-plaintiff litigation can occur via two procedures; “representative actions” and “test cases”. The Rules of Court provide for a representative action procedure whereby a named individual(s) can bring an action representing a class of persons interested in the same matter. It is generally confined to situations where the class is relatively small since the Court must be satisfied that each individual member of the class has authorised the named party. The procedure is further limited by the strict application of the rule that parties must have a similar claim, so that in essence claims must be almost identical. Considering the limitations of the representative action procedure, the preferred approach to multi-party litigation is the “test case”. A test case can arise where numerous separate claims arise out of the same circumstances. A single case is run which then sets a precedent by which the remaining cases are resolved.
There has been discussions around the introduction of class actions for some time and in 2005 the Law Reform Commission published a report recommending that a formal procedural structure be set out in the Court Rules to deal with multi-party litigation. Those recommendations remain unimplemented.
At EU level, the European Commission published a Recommendation in 2013 on collective redress which invites member states to adopt a collective redress mechanism for both injunctive and compensatory relief for breach of EU law rights. Although the Recommendation states that member states should implement the principles within two years (i.e. by mid-2015), the recommendations do not have binding legal force and there has been no changes in this jurisdiction since the Recommendation. Click here to view a 2013 William Fry article on the Recommendation.
Multi-Party Actions Bill 2017
The Bill is largely based on the Law Reform Commission’s paper on multi-party litigation from 2005. Under the Bill, proceedings which involve multiple parties (whether plaintiffs or defendants) and which involve common or related issues of fact or law, can be certified as a multi-party action by the Court. Once a party has contacted the Courts Service and confirmed that no previously certified multi-party action is relevant, a party can bring a motion seeking certification. The President of the High Court is to nominate a judge to deal with the application. If the certification application is granted, the judge will grant a multi-party action order and a register will be established pursuant to criteria set out by the judge. To join the register, a party will have to apply to the nominated judge to be entered. The appointment of a lead solicitor should be agreed by the parties and in the event that the parties fail to agree the Court will so appoint. The costs of the action will be divided equally amongst the members of the register who are liable, jointly and severally, for costs.
The Government opposed the Bill on grounds that it was technically flawed for seeking to enact as primary legislation a scheme that was intended by the Law Reform Commission to be in the form of the rules of court. While the Government was not dismissive of the Bill or its intent, it was submitted that a Bill of this nature, and the associated policy considerations, would benefit from pre-legislative scrutiny and examination as is the procedure for all government Bills. The Government informed the house that it has agreed to put the possible introduction of class action lawsuits to Mr Justice Peter Kelly for consideration as part of the Review of Civil Justice Administration which he has recently commenced.
As the current Bill lacks government support it is unlikely to progress through the legislative process, however, now the matter is clearly on the agenda we may see a procedure for class actions introduced through Court managed procedures (following President Kelly’s review) or alternatively class-actions may be marked for the Government’s legislation programme in Spring or Autumn next year.
Contributed by: Louise Mitchell
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