Government announces new law for ‘mass harm’ of consumers
The Government has announced plans for a new law that will make it easier for consumers to group together and seek redress if they have been affected by a breach of their rights, either in Ireland or in another EU country.
The legislation will give designated qualified entities new powers to take enforcement action on behalf of a group of consumers.
Such entities will be able to take a company to the High Court on behalf of a group of individual customers.
The new law is part of 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.
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 which has been caused by the same trader in several member states.
The new law is being drafted by the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar.
“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,” Mr Varadkar said.
“This is different to the US class action regime. Only certain, non-specified, non-profit entities will be able to take a case,” he added.
The Government says the new scheme will not impose an extra administrative burden on businesses and will not affect the vast majority of traders who treat their customers well.
Not-for-profit organisations will be able to apply to the Minister for Enterprise, Trade and Employment for designation as qualified entities.
There will be mechanisms in the new system to prevent abusive and opportunistic litigation and traders will enjoy the same legal rights and protections as they do in any other civil legal proceeding.