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Enforcement rights agreed for consumer ‘mass harm’

Beefed-up enforcement rights for consumers have been approved by the Government.

Leo Varadkar (Tánaiste and Minister for Enterprise, Trade and Employment) will begin drafting a law that will give designated qualified entities new powers to take enforcement action, on behalf of a group of consumers whose rights have been breached, either in Ireland or in another EU country.

The move is an EU-wide response to recent mass consumer-rights breaches by private companies, such as the 2015 car-emissions scandal and mass flight cancellations in 2017.

Infringement

It will allow for several cross-border qualified entities to come together to represent European consumers where they have been harmed by the same alleged infringement.

“This new law will make it easier for consumers to group together and seek redress when a large group of them have been affected by a breach of their rights – either at home or in another European country.

"It will allow a designated qualified entity to take a company to the High Court, on behalf of a group of individual customers,” the Tánaiste said.

“I know people can often feel intimidated and powerless when there’s been a large-scale consumer-rights breach. By providing a way for them to act collectively with representation from a qualified entity, this new law will massively strengthen their position.”

Ireland currently has no mechanism for collective redress.

Non-profit entities 

“This is different to the US class-action regime. Only certain, non-specified, non-profit entities will be allowed to take a case. 

“It follows on from the Consumer Rights Bill, approved by Government for publication last month, which extends rights over digital goods and services, and makes fake reviews and other commercial practices illegal.”

Not-for-profit organisations will be able to apply to the Minister for Enterprise, Trade and Employment for designation as qualified entities, and thus enable them to use the procedural mechanism for representative actions.

There will be mechanisms in the collective redress system to prevent abusive and opportunistic litigation. 

There will be provision, also, in the collective redress system to facilitate an out-of-court informal resolution for a grievance.

Minister Robert Troy said that the directive modernises the current European injunctions regime and aims to improve tools for stopping illegal practices.

High Court action

Once implemented, when the rights of many consumers are violated by the same business, a qualified entity can launch a representative action on their behalf before the High Court.

“This will be a first in Irish law, and will further strengthen consumers’ rights in Ireland and across the EU,” he added.

High Court action

The proposal repeals the current Directive 2009/22/EC