In March of this year, it was announced that the Irish Government had approved the drafting of legislation to transpose an EU Directive on representative actions for the protection of the collective interests of consumers into Irish law. The General Scheme of the Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022 was published in April 2022 and proposes to give effect to the Representative Action Directive (EU 2020/1828).
The Directive on representative actions for the protection of the collective interests of consumers (the Directive) 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.
Once in effect, the new law will harmonise the regime for collective actions to be brought on behalf of EU consumers. It also aims to balance the availability of the mechanism across Member States, while providing safeguards to prevent frivolous claims against traders.
The new mechanism will allow designated qualified entities to take enforcement action in the Irish courts on behalf of a group of consumers who allege that their rights have been breached either in Ireland or in another EU Member State. In addition to protections under general consumer law, the broad reach of the Directive is notable, covering data protection, financial services, energy and telecommunications.
To distinguish the EU regime from the more litigious US class action procedure, the criteria required in the Directive to bring a redress action are relatively strict.
Meanwhile outside of Europe, the law firm who won a $4.7 billion ruling against Johnson & Johnson in the USA over claims its talcum powder caused cancer is launching a group action to compensate alleged victims in the UK.
Lanier, Longstaff, Hedar & Roberts LLP, a firm set up to target corporate wrongdoing that has harmed people on a large scale have stated they believe that there may be thousands of people with ovarian cancer and mesothelioma who can trace their asbestos exposure back to using talc from a variety of manufacturers. The firm argues that the pharmaceutical giants have known for decades about the presence of asbestos in the talcum powder sold to the mass-consumer market and has failed to act with the interests of consumers in mind.
The US firm previously won $4.7bn for 22 women in the USA who alleged that using Johnson & Johnson’s baby powder and other talc products caused the women to develop ovarian cancer or mesothelioma. The primary ingredient, mineral talc, has been found to contain asbestos, the trial jury heard. Mark Lanier of Lanier, Longstaff, Hedar & Roberts LLP said: “For over 40 years major manufacturers of talc products have covered up evidence of asbestos in its products. With pressure mounting, these companies are finally ceasing production, but this is long overdue.”
In Ireland, class actions have long been highly restrictive and the lack of a workable representative action mechanism has been deemed a major barrier to public interest litigation in Ireland. Class actions facilitate a broader access to justice as they are an effective way for marginalised groups to vindicate their rights. Those who cannot afford to engage in litigation by themselves have the opportunity to have their grievances heard. Class actions promote efficiency and prevent time and money being wasted as, instead of many similar cases, the court only has to deal with one. Another advantage is that this creates greater consistency in the law.
The draft legislation introduced in Ireland could drive an increase in mass consumer claims and have an impact on financial services firms in particular, though a complete shift to a US-style system of opt out class actions has not been proposed.