EU directive 2020/1828 was an initiative of the European Commission which was intended to put in place new measures for supporting collective redress for consumers. This was a process that had been going on for decades without any real progress.
A comparison with how quickly compensation was paid to individual and class action lawsuits in the United States compared to Europe can be gleaned from what happened following the disclosure by Volkswagen in September 2015 that between 2009 and 2015 Volkswagen cars had been equipped with diesel engines, had emissions compliance “defeat devices” installed which were designed to bypass vehicles emissions control so as to result in false test outcomes.
Arising from various settlement talks across many jurisdictions in the United States, a settlement agreement in October 2016 was approved by the senior United States District Court for the Northern District of California for payment out of €15 billion relating to payments to approximately 475,000 polluting vehicles.
This can be contrasted with the experience in Europe where minimal progress was made.
As a result of increasing pressure, the commission released the directive which came into force on the 24th of December 2020.
At present, Irish Law does not provide any compensatory collective redress procedure. The options available to a litigant is to:
- Join an additional party/parties to an individual claim.
- Take a representative action.
- Consolidate separate hearings relating to separate actions and then issue a test case. While the new directive seeks to harmonize procedures across the EU it will allow member states significant discretion determining how the aims of the directive are to be achieved.
- It would not be possible for instance for law firms to bring an action on behalf of consumers. Such actions can only be brought by a “qualified entity” who must be a non-profit organization in the area of consumer protection, be independent, and have a legitimate interest in ensuring the provisions of the directive are complied with.
One very important issue that may arise from the EU Directives is the question of funding these third-party claims which would come with an enormous cost. At present, the tort of maintenance and champerty prohibits third-party litigation funding.
It is hoped that the provision within the EU of the possibility of bringing multiparty class actions will act as a detriment to large entities and force them to consider their social environmental and safety obligations and put in place appropriate safeguards to protect their customers.
If you have any queries in relation to any commercial litigation matter, please do not hesitate to contact either Conor White or Donna Phelan on 01-2960666.
