Between Sector-Specific and Horizontal: A New Proposal for Ireland's Implementation of Collective Litigation Mechanisms
| Date | 01 January 2018 |
| Author |
92
Between Sector-Specic and Horizontal: A New
Proposal for Ireland’s Implementation of
Collective Litigation Mechanisms
RICCARDO SAVONA SIEMENS*
e history of litigation redressing mass harm in Ireland is replete with a lack of
clarity, unimplemented policy proposals, and an overall disinterest in tackling such
matters through legislation. Last year, as a result of the tracker mortgage scandal,
calls were made to introduce legislation allowing collective litigation against the
nancial institutions at fault.1 e Multi-Party Actions Bill 2017 was draed and
debated in the Dáil and subsequently referred to the Select Committee on Justice
and Equality in November 2017.2 Aside from the tracker mortgage scandal, the
issue of collective litigation has acquired great importance recently because of the
EU’s likely push for a rmer mechanism under EU-wide legislation.3
In view of the topical nature of these issues and the growing momentum in this
area, this article addresses Ireland’s need for a mechanism allowing collective
litigation and proposes a new way to implement this. Such a proposal would draw
on two aspects: the experience of the EU and in the UK in tackling the issue of
collective litigation, and the discussion on whether this should be done at a sectoral
level (pertaining to a particular area of law) or a horizontal level (equally applicable
across all areas of law). It will be argued that the proposed Irish model for collective
litigation should apply on a horizontal level. It will also be shown that there is no
need to design the collective litigation model ex novo, in light of developments
such as the Consumer Rights Act 2015 in the UK, which oer a clear, realistic and
innovative solution that goes beyond what is currently discussed in Ireland. In this
regard, it will be argued that a sectoral mechanism can also be used, in certain cases,
horizontally across dierent areas of law.
* LL.B. (Dubl.), LL.M. (UCL), Trainee Solicitor at McCann FitzGerald.
1 As seen in the statements by the Minister for Finance Paschal Donohoe TD and in the private bill
to be introduced in the Dáil. See Ciarán D’Arcy, ‘State “may allow class action lawsuits” over tracker
scandal’ e Irish Times (Dublin, 28 October 2017); Michael O’Regan, ‘Tracker mortgage scandal:
Labour to introduce Bill allowing class action against banks’ e Irish Times (Dublin, 5 November
2017).
2 Multi-Party Actions Bill (2017) 130; Dáil Deb 16 November 2017, vol 691, no 6.
3 2017 marked the review by EU institutions of the ‘Recommendation on Collective Redress’, a
non-binding document discussing the approach that member states should take in legislating for
collective actions. See Commission Recommendation 2013/396/EU of 11 June 2013 on common
principles for injunctive and compensatory collective redress mechanisms in the Member States
concerning violations of rights granted under Union Law [2013] OJ L201/60 (hereinaer, the
‘Recommendation’).
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 93
e following discussion is divided into three sections. e rst section deals
with the Irish legal framework that applies to circumstances involving mass harm
and litigation, assessing the need to move beyond the current provisions tackling
such issues. e second section expands the picture to the EU level, discussing the
development of its collective litigation policies and whether its model should be
implemented in Ireland. e third section describes the approach of legislation in
the UK, and specically what Ireland could gain from the innovative solution there
to sectoral collective litigation and even expand on it.
Two cautionary points should be mentioned at this stage. First, the expression
‘collective litigation’ is used in this article as an umbrella term to encompass
circumstances where other terms have been used, including ‘class actions’, ‘multi-
party actions’ and ‘collective proceedings’. is is due to the fact that, despite some
of these terms presenting unique characteristics, they have been used somewhat
interchangeably in similar factual and legal contexts, with emphasis on their
dierence arguably exacerbated by ideological rhetoric.4 Secondly, this article does
not analyse the issue of costs in great detail or as a standalone topic. While the issue
of costs remains an important consideration in respect of collective litigation, its
relevance extends signicantly into individual judicial redress and thus would merit
an analysis beyond the scope of this article.
A Framework for Collective Litigation and the
CuriousCaseofIreland
Prior to discussing the provisions of Irish law which deal with collective litigation,
it is useful to frame this form of litigation within the wider concept of collective
redress. Collective redress can be described as ‘any mechanism that may accomplish
the cessation or prevention of unlawful business practices which aect a multitude
of claimants or the compensation for the harm caused by such practices’.5
In light of the above, it would be inappropriate to assert that collective litigation
is the only mechanism of redress in situations of mass harm. Redress in these
situations, as a matter of fact, is characterised by intertwined and sometimes
overlapping mechanisms.6 One such mechanism is regulatory redress, and consists
of public authorities and their power to enforce a particular regulatory law by
making individual as well as collective orders.7 Regulatory redress has become a
4 is is illustrated by Christopher Hodges, for example, when describing the EU change of terminology
in developing the policies around collective action. See Christopher Hodges, ‘Collective Redress: A
Breakthrough or a Damp Sqibb?’ (2014) 37 Journal of Consumer Policy 67, 72.
5 Commission, ‘Commission Sta Working Document – Public Consultation, Towards a Coherent
European Approach to Collective Redress’ SEC (2011) 173 nal, 3.
6 Hodges, ‘Collective Redress: A Breakthrough’ (n 4) 81.
7 Christopher Hodges, ‘Collective Redress In England & Wales – National Report’ (Empirical
Evidence on Collective Redress in Europe, University of Oxford, December 2016)
94
major collective redress mechanism and has shied matters away from private
enforcement and courts; many regulatory settlements are agreed between the
culpable entities and the regulator, with the court stepping in only to approve and
make the settlement binding.8
Another popular redress mechanism that also falls within the ADR sphere is that of
the ombudsman. e ombudsman model has developed into a number of regulated
industries, including nancial services, consumer protection, energy supply, and
environmental protection. Among the signicant features of the ombudsman
model, three stand out: process engagement, lack of costs to consumers, and
collective coordination.9 e rst feature is that the entities operating in a particular
sector are bound by the relevant ombudsman and therefore have to participate in
its processes.10 e second feature stems from the fact that the ombudsman schemes
are nanced by the entities that operate in that sector, thus relieving consumers
from paying for the scheme themselves.11 e third feature of the ombudsman
model derives from the internal capabilities and tools of a particular ombudsman,
which enable it to decide an individual case, identify and coordinate groups of
similar cases, and ensure consistency and eciency of outcomes.12
e success and eectiveness of the regulatory and ombudsman mechanisms in
collective redress has made them instrumental tools for dealing with circumstances
involving mass harm, at times in preference to collective litigation due to their
expedience and lower costs.13 Nevertheless, the complete exclusion of a mechanism
for collective litigation would be a mistaken choice. e best way to view collective
redress is holistically, as an integrated structure of dierent pillars or mechanisms
(including regulatory enforcement, ombudsman schemes and collective litigation).14
Ultimately, ‘“redress” is a goal rather than a technique or procedure’,15 and therefore,
the application of dierent techniques and tools to varying circumstances can
expand and deliver better redress.16 As this integrated model includes collective
litigation, it is therefore crucial to develop, moving forward, a strong framework for
collective litigation in Ireland akin to that found in other jurisdictions.
e Irish legal provisions that address mass harm and litigation have not evolved
signicantly in recent times. Presently, the legal framework in Ireland does
law.ox.ac.uk/sites/les/oxlaw/england_wales_1.docx> accessed 14 November 2017; Hodges,
‘Collective Redress: A Breakthrough’ (n 4) 81.
8 Hodges, ‘Collective Redress In England & Wales’ (n 7); Hodges, ‘Collective Redress: A
Breakthrough’ (n 4) 85.
9 Hodges, ‘Collective Redress In England & Wales’ (n 7).
10 ibid.
11 ibid.
12 ibid.
13 Hodges, ‘Collective Redress: A Breakthrough’ (n 4) 72.
14 John Sorabji, ‘Reections on the Commission Communication on Collective Redress’ (2014)
17(1) IJEL 62, 73.
15 Hodges, ‘Collective Redress: A Breakthrough’ (n 4) 84.
16 ibid; Sorabji (n 14).
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 95
not provide for collective litigation per se, but allows for two types of actions to
cover analogous situations: representative actions and test cases. Representative
actions stem from the Rules of the Superior Courts17 and are allowed in restricted
circumstances where there is ‘a common interest, a common grievance and relief
in its nature benecial to all.’18 is common interest is usually found in joint
benecial entitlement to property.19 Either claimant or defendant that holds the
same interest as the rest of the claimants or defendants respectively, will initiate or
defend proceedings on behalf of the group. e commencement of representative
action proceedings is made through an application to the court that would give
the defendant or claimant a representative status. Every potential member of the
class has to ‘opt-in’, that is, expressly convey to the court that he has consented to
representation. Subsequently, they will be bound by any outcome of the claim.
Broadly speaking, the courts have been reluctant to allow exibility for this type of
action, thus limiting its scope to redress mass harm.20 is is reected, for example,
in the fact that the courts have allowed representative actions in disputes involving
joint benecial entitlement to property but not in tort actions.21
Test cases, on the other hand, can be considered the preferred mechanism for
litigation involving mass harm in Ireland.22 is is due in part to their exibility,
making them a more appropriate instrument for tort and other types of action.23
e test case model is based on the court’s inherent jurisdiction to ensure that
cases and party resources are not unnecessarily duplicated.24 us, a test case is
chosen among many cases that face similar issues, with the rest stayed until the
resolution of the test case. e initiation of proceedings in test cases diers from
that of representative actions, because each party issues proceedings individually
until one of them becomes the benchmark. Even then, this does not guarantee that
the remaining similar cases will reach the same outcome unless all elements of the
claim are identical to the benchmark. While the subsequent cases are not technically
bound to follow the outcome of the test case, nevertheless, the doctrine of precedent
and the similarity to the test case may lead to the same verdict being reached.25
17 RSC Ord 15, r 9.
18 Bedford (Duke) v Ellis [1900-3] All ER Rep 694.
19 Sharon Daly and April McClements, ‘Ireland’ (2017) e Law Reviews 88,
co.uk/edition/the-class-actions-law-review-edition-1/1141387/ireland> accessed 14 November
2017.
20 Barry O’Sullivan, ‘Is a Class Action System for Consumers Desirable in Europe?’ (2010) Hibernian
Law Journal 123, 131; Liz Heernan, ‘Comparative Common Law Approaches to Multi-Party
Litigation: e American Class Action Procedure’ (2002) 25 DULJ 102.
21 Moore v Attorney General (No 2) [1930] IR 471. On this point, see the Law Reform Commission,
Multi-Party Litigation (Class Actions) (LRC CP 25-2003) 6–7.
22 Joanne Blennerhassett, A Comparative Examination of Multi-Party Actions: the Case of
Environmental Mass Harm (Hart 2016) 260.
23 Daly and McClements (n 19) 91.
24 ibid 7.
25 Law Reform Commission, Multi-Party Litigation (Class Actions) (n 21) 16–17.
96
e social welfare26 and army deafness claims27 are prime examples of litigation
involving multiple parties and managed without the formalities of collective
litigation claims. ese cases were among the rst to indicate the need for a balance
between building an ecient system and oering individual fairness.28 For instance,
a failure to implement an EU Directive on Equal Treatment in Social Welfare led
to two test cases, Cotter and McDermott v Minister for Social Welfare and Attorney
General,29 being initiated for 11,200 married women who had issued proceedings.30
A settlement was reached for the two cases and a further 2,700 of the proceedings
issued, without any admission by the State regarding liability.31 e outcome of
the case le 8,500 claims (and a total of 58,000 disadvantaged women who had
not issued proceedings at that stage) without redress. In the later case of Tate v
Minister for Social Welfare, it was found that the same entitlement arose for these
other situations too.32 At the end of these decisions, the government announced
payments to the entire group of women who had been disadvantaged by its failure
to implement the EU Directive, with a total cost amounting to £265 million.33
Another interesting dispute involves the pyrite construction claims, whereby 550
homeowner claimants issued proceedings as a result of their purchase of houses
with structural faults.34 e dispute was considered ‘one of the most expensive
court cases in the history of the State’;35 the claimants brought separate actions and
did not always use the same lawyers to represent them.36 Ultimately, a €25.5 million
fund for repairs was used as settlement.37
e above disputes reveal a system for collective litigation that is unduly fragmented
among dierent types of action, and inecient in the resolution of claims as
dierent iterations of the same factual and legal scenario had to be brought in
court.38 e clear shortcomings of this system were assessed by the Law Reform
Commission, which published, among other things, a lengthy report on what it
termed ‘multi-party litigation’ in 2005. e Law Reform Commission suggested
the adoption of ‘Multi-Party Action’ (hereinaer the ‘MPA’) through a change
26 Cotter and McDermott v Minister for Social Welfare [1987] ECR 1453; Tate v Minister for Social
Welfare [1995] 1 IR 418.
27 Flood v Minister of Defence [1999] ICLY 366; Smith v Minister of Defence [1999] ICLY 345;
Dunne v Minister of Defence [1998] ICLY 314.
28 Law Reform Commission, Multi-Party Litigation (LRC 76-2005).
29 Cotter and McDermott (n 26); Case 377/89 Cotter and McDermott v Minister for Social Welfare
(No 2) [1991] 1 ECR 1155.
30 Blennerhassett (n 22).
31 ibid.
32 Tat e (n 26).
33 Blennerhassett (n 22).
34 ibid.
35 ibid 262.
36 ibid.
37 ibid.
38 ibid.
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 97
in the Rules of Court.39 e Law Reform Commission’s recommendation for the
MPA centred on the key preliminary step of judicial certication, based on whether
the MPA would be considered an ‘appropriate, fair and ecient procedure’ to
resolve the dispute.40 In doing so, the Law Reform Commission clearly considered
such an overall assessment more suitable than a test focusing on discrete elements
such as a minimum number of people in the class or the predominance of common
issues over individual issues.41
Other provisions for the MPA model included the opt-in basis (meaning that
claimants would have had to actively express their intention to join the action),42
the selection of a lead case as representative of the group (in order ‘to litigate a
specic issue which will fairly and adequately represent the interests of individual
litigants in the MPA’),43 a deadline to enter the MPA register,44 case-management
powers to the appointed judge, and the appointment of a single legal representative
(either voluntarily chosen by the participants to the action or nominated by the
court) to deal with the common issues.45 Finally, it was also recommended that the
costs of the new model of action would be shared among the dierent participants
in equal measure.46
Despite their forward-thinking nature, the proposals of the Law Reform
Commission remained unimplemented and largely neglected until recently. e
Multi-Party Actions Bill 2017, introduced in November 2017 and recently referred
to Select Committee on Justice and Equality, changed this by taking inspiration
from the Law Reform Commission work on multi-party litigation.47 Like the Law
Reform Commission’s recommendations, the model advocated in the bill is to
be termed MPA. Once again, the appointed judge will have the role of certifying
the action where, following common or related legal or factual issues, there is a
likelihood of multiple cases arising and the MPA is considered the ‘appropriate,
fair and ecient procedure’ for resolving the dispute.48 Provisions akin to those
recommended by the Law Reform Commission apply to the other procedural
elements of the MPA, including lead cases, lead solicitors, registry of the MPA
action, etc.49
While the attempts to change the legal framework through the Multi-Party Actions
Bill 2017 are to be lauded, the current practice of multi-party litigation in Ireland
39 Law Reform Commission, Multi-Party Litigation (n 28) 17.
40 ibid [2.73].
41 ibid [2.46], [2.58].
42 ibid [2.26].
43 ibid [2.63].
44 ibid [2.91].
45 ibid [2.87].
46 ibid [3.35].
47 Dáil Deb 9 November 2017, vol 961 no 3; Multi-Party Actions Bill (2017) 130.
48 Multi-Party Actions Bill (2017) 130, s 2(4).
49 Dáil Deb 9 November 2017, vol 961 no 3.
98
still features cumbersome, delayed and costly mechanisms. Given the likelihood of
the introduction of EU-wide legislation in the area in the near future,50 it is useful
to see how the Irish legal framework compares to the current approach and policy
envisaged in the EU. is comparison is also important in indicating whether
ultimately the EU approach is desirable in Ireland or whether Ireland should seek
solutions from other jurisdictions, like those adopted in the UK.
‘Toxic Cocktails’ and EU Policy on Collective Litigation
In considering a potential solution to the collective litigation problem in Ireland, it
is possible to draw some important lessons from the development of this procedure
at the EU level.
Although it has been said that the original stimulus for reform in this area dates
back to policies and legislation from the 1980s,51 the relevant documents discussing
potential proposals on collective litigation were introduced in 2005. ey outlined
how and to what extent the Commission aimed to achieve its objectives in
relation to private enforcement actions and collective action mechanisms.52 Later
in 2013, the Commission issued a non-binding Recommendation,53 followed
by an additional document by the European Parliament and Council,54 aimed at
setting in motion an eective collective redress mechanism equally operative in
both private and public enforcement. In particular, the Recommendation suggests
that issues of verication and admissibility of such actions should be dealt with
promptly at the outset of litigation, in order to discontinue manifestly abusive
claims.55 If the action is representative, then legal standing should be granted to
those public and private entities that have received ocial designation or ad hoc
certication by the Member State.56 Furthermore, the possibility should be made
available to a representative entity or category of claimants to share information
about a violation and the intended collective litigation.57
50 Sorabji (n 14); Commission Sta Working Document, ‘Report of the Fitness Check on Directive
2009/22/EC, and Directive 2006/114/EC of the European Parliament and of the Council of 12
December 2006 concerning misleading and comparative advertising’ SWD (2017) 208 nal.
51 Sorabji (n 14).
52 ibid. As explained by Juska, these documents include: Commission Green Paper, ‘Damages actions
for breach of the EC antitrust rules’ COM (2005) 672; Commission White Paper, ‘Damages actions
for breach of the EC antitrust rules’ COM (2008) 165; and Commission Green Paper, ‘Consumer
collective redress’ COM (2008) 794. See Zygimantas Juska, ‘e Future of Collective Antitrust
Redress: Is Something New Under the Sun?’ (2015) 1 Global Competition Litigation Review 14.
53 Recommendation (n 3).
54 Communication to the European Parliament and the Council, ‘Towards a European Horizontal
Framework for Collective Redress’ COM (2013) 401/2. On this, see also Mantas Pakamanis, ‘e
role of class actions in ensuring eective enforcement of competition law infringements in the
European Union’ (2016) 2(2) ICJ 122.
55 Recommendation (n 3) [8].
56 Juska (n 52).
57 Recommendation (n 3) [10].
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 99
Two additional important principles in the Recommendation relate to the
issue of costs and joining the collective litigation as a potential claimant. e
Recommendation proposes that the loser-pays principle be applied;58 in doing so,
the Commission discards the more forgiving US model of costs and maintains a
principle that might potentially force a claimant to bear all costs of a failed claim.
e risk of losing remains a strong deterrent in bringing a case.59 In respect of
joining the collective litigation, the primary suggestion is that an opt-in model
should be implemented by Member States, with each claimant expressly joining the
action rather than falling within by default.60 Overall, it is clear that the provisions
of the Recommendation on issues such as standing, admissibility and funding,
point to a clear intention to disincentivise what are seen as abusive claims, the ‘toxic
cocktail’ of factors identied in the US class action system.61
Interestingly, in its Recommendation, the Commission proposes a system that does
not operate on a sectoral basis, but rather on a horizontal level, that includes all areas
of law beyond competition breaches alone.62 It was envisaged, for instance, that
collective litigation could cover ‘mass tort class actions, … securities & shareholders
class actions, … [and] nancial injury class actions aiming at restitution of ill-gotten
gains the defendants might have realised usually in the framework of existing
contractual or business relations’.63 is marked a signicant change from an
initial approach that was based on a more fragmented and sectoral view of how to
implement collective action, and that had not led to any extensive harmonisation
of this mechanism or coherence across dierent Member States.64
Whether Ireland should follow the Recommendation and EU policy regarding
collective litigation on a horizontal level should depend on the critical reception
the Recommendation has received since its publication. Academics such as Juska
and Hodges have cast doubt on whether the Recommendation can really provide
the requisite momentum for collective litigation, and have argued this on a
number of points.65 e safeguards introduced in the Recommendation against
the ‘toxic cocktail’ of factors provided in the US system could actually reduce the
‘compensatory eectiveness’ of collective litigation by building legal and economic
barriers to potential claimants.66 For example, the loser-pays principle may not only
discourage abusive claimants but also those who would benet the most from a
58 Recommendation (n 3) [13].
59 Pakamanis (n 54).
60 Recommendation (n 3) [21].
61 Commission Green Paper, ‘Consumer Collective Redress’ (n 52) [48]. For some interesting
comments on the EU’s changing approach on the policy for collective action see Hodges,
‘Collective Redress: A Breakthrough’ (n 4) 71–72.
62 Juska (n 52).
63 EU Parliament Policy Department A: Economic And Scientic Policy, ‘Overview of existing
collective redress schemes in EU Member States’ IP/A/IMCO/NT/2011 (16 July 2011) 11.
64 ibid; Commission Sta Working Document, ‘Report of the Fitness Check’ (n 50); Juska (n 52).
65 Juska (n 52).
66 Juska (n 52) 18; Hodges, ‘Collective Redress: A Breakthrough’ (n 4) 83.
100
collective litigation mechanism in the rst place.67 Further, the safeguards are
presented with such exibility that Member States may have too much discretion;68
an example of this can be seen regarding the Recommendation’s principle on costs,
funding and on whether the mechanism should be opt-in or opt-out.69 Sorabji
describes how France has adopted an opt-in model whereas countries like Sweden,
Portugal and the UK have a mixed or fully opt-out model.70 is exibility results
in an ‘ex ante uncertainty for the claimants.’71
It has been argued that another key aw in the current EU policy is its primary
focus on collective litigation as opposed to other particular mechanisms, such
as ADR/Ombudsman and regulatory bodies, which characterised the overall
framework of the initial policy.72 In doing so, the EU policy developed its analysis
from a distorted starting point, ignoring the fact that in many of the Member States
the alternatives to collective litigation (consumer ADR and regulatory powers)
have hindered the development of collective litigation by providing cheaper and
eective mechanisms for the resolution of multi-party disputes.73 is has also
explained why the mechanisms for collective redress have been aimed at specic
sectors as opposed to horizontally.74 e EU policy therefore, by inadequately
focusing on some key elements, has built a policy on collective litigation that is not
as ‘theoretically robust and practically eective’ as it could have been.75
In real terms, what the critique delineated above suggests is an inherent vagueness
to the EU policy connected to collective litigation, due to the diversity of
opinions and implementation across dierent Member States.76 is compromise-
based approach is too exible and necessitates such a high level of input to
render it unfeasible as a standalone model for a new Irish collective litigation
mechanism. is is emphasised by the horizontal approach espoused by the EU
Recommendation, which has its basis on the harmonisation across the EU Member
States rather than the superiority of a horizontal model over a sectoral one. While
in theory it would be preferable to have a collective litigation mechanism applying
on a horizontal level, the main problem with the recent EU policy is that it is overly
ambitious in its reach while lacking the necessary assertiveness and clarity. In this
respect, it would have been more advisable to develop an intellectually rigorous and
commercially sound sectoral collective litigation mechanism rst and expand it
then horizontally across other areas of law.
67 Juska (n 52) 19.
68 Hodges, ‘Collective Redress: A Breakthrough’ (n 4).
69 Juska (n 52).
70 Sorabji (n 14) 70.
71 Juska (n 52) 19.
72 Hodges, ‘Collective Redress: A Breakthrough’ (n 4) 72.
73 ibid 81–85.
74 ibid 84.
75 Sorabji (n 14) 72.
76 Hodges, ‘Collective Redress: A Breakthrough’ (n 4); Sorabji (n 14).
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 101
e Approach to Collective Litigation in the UK
In light of the problems in the implementation and the overall uncertainty
surrounding the EU proposals on collective litigation, it is interesting to see the
approach taken in UK. is approach consists of interconnected sectoral and
horizontal collective litigation mechanisms, some of which could inuence a new
Irish mechanism in this area. e current regime governing collective litigation is
broadly divided into two main categories. e rst category that is applicable to
all kinds of claims operates largely on an opt-in basis (with the potential exception
of representative actions that can be viewed as opt-out),77 with claimants joining
proceedings in order to benet from any potential damages awarded. e second
category is largely geared towards a sectoral collective redress mechanism that
operates as an opt-out system, and currently lies in the competition law sphere.
e rst category of general collective redress mechanisms includes Group
Litigation Orders (hereinaer the ‘GLOs’) as well as representative actions, with
the most frequent remedy requested being damages.78 Both of these mechanisms
are set out in the Civil Procedure Rules used by the Court of Appeal, High Court
and county courts in England and Wales.
GLOs originate from Civil Procedure Rule 19.10 and rely on a simple premise:
individuals who start their own separate actions, where similar facts and issues
arise, can make an application to have the claims managed and heard collectively,
beneting and distributing the burden of reaching a judgment on the similarities.79
us, rather than being a class action mechanism as traditionally intended, the GLO,
a wide-ranging case management instrument conceived to maximise eciency, is
essentially procedural.80 GLOs require the claims to be brought individually and
aer obtaining the court’s consent, they are entered into a binding group register;81
as such, they are an opt-in mechanism.82 ere are a number of criteria required
for the commencement of GLOs, including, among others, the commonality and
relatedness of legal and factual issues. e court in specic circumstances can even
77 Richard Swallow and Peter Wickham, ‘England’ (2017) e Law Review 1
co.uk/edition/the-class-actions-law-review-edition-1/1141378/england-wales> accessed 14
November 2017; Neil Andrews, ‘Multi-Party Litigation In England’ (September 2013) University
of Cambridge Faculty of Law Legal Studies Research Paper Series 39/2013, 11 smechanisms>
accessed 15 November 2017.
ssrn.com/sol3/papers.cfm?abstract_id=2330329> accessed 14 November 2017.
78 Vincent Smith and Mahdis Moeiri-Farsi, ‘England and Wales’ BIICL Focus on collective redress
accessed 15 November 2017.
79 Andrew Higg ins and Adrian Zuckerman, ‘Class Actions in England? Ecacy, Autonomy and
Proportionality in Collective Redress’ (2013) Oxford Legal Studies Research Paper 93/2013, 3, 12
80 See for example Taylor v Nugent Care Society [2004] EWCA Civ 51 [9]; Higgins and Zuckerman
(n 79) 12; O’Sullivan (n 20) 131-132.
81 Rachel Mulheron, ‘Some diculties with group litigation orders – and why a class action is
superior’ (2005) 24 CJQ 40; Higgins and Zuckerman (n 79).
82 O’Sullivan (n 20) 131–132; Hodges, ‘Collective Redress In England & Wales’ (n 7).
102
make an order granting a GLO on its own initiative.83 Courts are granted broad
powers to deal with the class representation and the fairness of the procedure in
the most ecient and exible way, such as powers to appoint lead solicitors for
the group, have some of the claims heard as test claims, determining deadlines for
entering the group register of the claim, detailing what to add in the statement of a
case to show compliance with the criteria for the group.84
GLOs are a popular mechanism that has even featured in recent times; in 2016,
for instance, a signicant number of institutional investors lodged an application
to the High Court in connection with the accounting scandal involving Tesco.85
In 2017, an application was lodged in the High Court on behalf of VW owners, in
relation to the diesel engine emissions aair.86 Nevertheless, GLOs have also been
criticised as being prone to collapse or settlement, involving signicant costs and
failing to deliver access to justice.87
Representative actions are instead found in Civil Procedure Rule 19.6. ey
operate in a similar way to representative actions encountered in Ireland and
discussed above, but with some noteworthy dierences. is type of action can be
used for any kind of claim and by any number of claimants or defendants as long as
the representative and the represented parties retain the same interest in a claim.88
In essence, there is one representative party, whereas the other members to that
represented class do not become participants to the action.89 e represented parties
fall within a position described by Andrews as hybrid, as ‘neither fully a party (and
thus not automatically liable for costs, nor … able to demand – nor liable to provide
– disclosure of documents) … nor … a mere bystander uninterested in the fate of
the case.’90 Once the requirement of ‘same interest’ is met, it is not essential for any
potential participating party to authorise its representation.91 e judgment by the
court is binding on each party that is represented by the representative claimant.92
It has been argued that the objectives of the representative action, including that
the dispute be resolved in a fair and expeditious manner, make it an attractive
83 Kate Corby, Louise Oakley and George Berry, ‘On the Cusp of US-Style Class Action? European
Commission Gathers Evidence for the Future of Collective Redress’ (Global Class Action Blog,
28 August 2017)
action-european-commission-gathers-evidence-for-the-future-of-collective-redress/> accessed 15
November 2017.
84 Higgins and Zuckerman (n 79) 12; Andrews (n 77) 10.
85 Attracta Mooney, ‘Fund managers join forces to sue Tesco for £100m’ Financial Times (London,
11 November 2016) tent/4deaa8be-a807-11e6-8898-79a99e2a4de6> accessed
15 November 2017.
86 On this, see
accessed 14 November 2017.
87 Hodges, ‘Collective Redress In England & Wales’ (n 7).
88 Andrews (n 77) 3. Swallow and Wickham (n 77).
89 Andrews (n 77) 3: Hodges, ‘Collective Redress In England & Wales’ (n 7).
90 Andrews (n 77) 4.
91 Independiente Ltd v Music Trading On-Line (HK) Ltd [2003] EWHC 470 (Ch).
92 Civil Procedure Rules 19.6(4)(a) (UK); Andrews (n 77) 4.
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 103
mechanism even in the current commercial reality.93 is would seem to be the
case if one looks also at the fact that the language on the same interest requirement
per the Civil Procedure Rules has been tempered to reect its exible nature as a
tool in the administration of justice.94 Nevertheless, recent cases have also shown
that a representative action cannot be stretched to the point of being a full opt-
out collective litigation mechanism, as a class action traditionally conceived may
be. In Emerald Supplies Ltd v British Airways, the Court held that, however exible,
the category of representation still has to be clearly identiable according to the
provisions prescribed by the law. e expansion of the categorisation to the extent
that it is impossible to clearly ascertain the claimants will result in the failure of the
representative action.95
e above analysis on GLOs and representative actions reveals the diculties
that both mechanisms present in dealing with collective litigation.96 e test of
relatedness and commonality found in GLOs undoubtedly tempers the strictness
of the ‘same-interest’ test that characterises representative actions, thus opening
up avenues for collective litigation.97 Nonetheless, a GLO provides an inherently
procedural and costly instrument that caters for certain specic disputes and is,
more importantly, only an opt-in mechanism. In this context, a mechanism of
collective litigation that is of greater interest in the present discussion is the sectoral
one found in competition cases. From 2003 to 2015 breaches of competition law
resulting in damage to consumers could be remedied by way of opt-in representative
claims.98 e situation changed with the Consumer Rights Act 201599 and the
introduction of s. 47B of the Competition Act 1998, whereby both individuals and
businesses can apply for what are known as Collective Proceeding Orders (‘CPOs’)
and the possibility arises to render an action ‘opt-out’. e Consumer Rights
Act 2015 also prescribes a power to the Competition and Markets Authority to
approve a voluntary redress scheme100 and a power for the specialised competition
adjudication body, the Competition Appeal Tribunal (hereinaer the ‘CAT’) to
grant an approval to a collective settlement.101
93 Swallow and Wickham (n 77).
94 John v Rees and others [1970] Ch 345, 370.
95 Emerald Supplies Ltd v British Airways Plc [2010] EWCA Civ 1284.
96 Barry J Rodger, ‘e Consumer Rights Act 2015 and collective redress for competition law
infringements in the UK: a class act?’ (2015) 3(2) Journal of Antitrust Enforcement 258, 267-
268. See more generally, Civil Justice Council, ‘“Improving Access to Justice rough Collective
Actions” Developing a More Ecient and Eective Procedure for Collective Actions’ (November
2008) Final Report, available at .uk/wp-content/uploads/JCO/Documents/
CJC/Publications/CJC+papers/CJC+Improving+Access+to+Justice+through+Collective+Ac
tions.pdf> accessed 20 November 2017.
97 Higgins and Zuckerman (n 79) 12; Andrews (n 77) 8–9.
98 Hodges, ‘Collective Redress In England & Wales’ (n 7).
99 It is worth noting that the Consumer Rights Act 2015 (and the Competition Act 1998, which it
amends) applies to the jurisdictions of England and Wales, Scotland and Northern Ireland, i.e. the
UK as a whole, whereas the Civil Procedure Rules apply only to courts in England and Wales.
100 Competition Act 1998 (UK) s 49C, as amended by the Consumer Rights Act 2015 (UK).
101 Competition Act 1998 (UK) s 49C, inserted by the Consumer Rights Act 2015 (UK).
104
CPOs result from the infringement of competition law and may be brought either
by certain specied bodies or by parties that are authorised by the CAT. Any person
or trade association can act as class representative, but the CAT may authorise a
representative only if such appointment is fair and reasonable.102 e CAT has
the power to certify the action as either opt-in or opt-out, with the latter available
only to UK-domiciled.103 ere is discretion for the CAT to provide certication
depending on whether there is an identiable class, common issues of law or fact,
and if the claims t a collective redress scheme;104 residual powers allow the CAT
to also scrutinise the fairness, the costs and benets of the procedure, the class’ size
and the availability of alternative mechanisms of dispute resolution.105 e CAT
will consider two main elements when deciding which procedure to follow. Firstly,
the CAT will look at the strength of a claim and, secondly, if realistic, it will prefer
opt-in proceedings should they be more practical.
e new provisions are not without diculties and it is thought that delays might
follow because of doubts on how the rules would work in practice.106 For instance,
the provisions on the calculation of costs and benets do not explain who should
bear the benets and costs and how these are to be assessed.107 A similarly unclear
provision pertains to the opt-in/opt-out certication of the action, whereby the
‘merits’ of the case are to be assessed at a seemingly preliminary stage.108 is may lead
to a real risk, as explained by Rodger, of ‘assessing [the] strengths of claims … [and]
may inevitably lead to lengthy, protracted interlocutory disputes, delaying justice
and potentially disincentivising claimants from raising collective proceedings.’109
A further uncertainty, and potential cause for delay, is the suitability of the class
representative in raising the action and the extent to which this should be excluded
to categories like lawyers.110 In this regard, however, it should also be said that the
stringent pre- and post-certication scrutiny by the CAT should provide enough
safeguards to make the role and suitability of potential class representative a matter
of lesser concern.111
One of the important advantages of the newly introduced mechanism is the opting-
out for certain actions. is is particularly benecial because, compared to earlier
opt-in models, it cuts the costs of locating and incentivising potential parties who
have suered from the competition infringement. One may question the inability
102 Competition Act 1998 (UK) s 47B inserted by the Consumer Rights Act 2015 (UK).
103 Lianne Craig, Wessen Jazrawi, Stella Gartagani, Tatiana Siakka and Katie Fitzgerald Frazer,
‘A Summary of Recent Developments in Antitrust Damages Claims, Collective Redress and
Funding in the EU and UK’ (2013) GCLR R46.
104 Competition Appeal Tribunal Rules 2015, SI 1648/2015, r 79 (UK).
105 ibid.
106 Rodger (n 96) 275.
107 ibid.
108 ibid.
109 ibid.
110 ibid.
111 ibid 280.
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 105
to acquire an opt-out certication for non-UK domiciled, especially in a context
where the global nature of the infringement would create a high number of non-UK
claimants. In general, however, the current opt-out model is preferable, at the very
least, because it circumvents considerable costs and logistical problems of dealing
with non-UK domiciled claimants by shiing the participatory onus on them.
To date, two disputes have attempted to obtain the opt-out certication from
the CAT. ese were the claim against Mastercard in relation to multilateral
interchange fees,112 and the claim against Pride Mobility Products in connection
with the sale of mobility scooters.113 In the most recent case, the Mastercard dispute,
a former Financial Ombudsman Service chief sought to be class representative and
claimed that the anticompetitive behaviour by the nancial services multinational
was transmitted through to the sale merchants and led to higher consumer retail
prices.114 It was argued that the class of claimants included purchasers of goods or
services from sale merchants that accepted Mastercard, with the exclusion of certain
consumers.115 e CAT held that while there was no necessity for all signicant
issues to be common in the dispute, it was dicult in the present case to dene
the details of the overcharge passed through to consumers and the amount spent
at the retail merchants by each claimant in the relevant period.116 ese diculties
rendered the case unsuitable for an opt-out mechanism. Leave to appeal this
decision was rejected by the CAT because of the lack of appeal procedure in the
event of a refusal to certify the class in the collective litigation mechanism.117 It was
said that this was a conscious policy decision by the legislature against the abuse
and delay in the collective litigation procedure.118
e Mastercard case reected the diculties in obtaining certication encountered
in the earlier Pride dispute, and the unique intricacies of the claim and its timeframe
made it unsuitable for an opt-out certication.119 ese cases show, however, how
the collective litigation mechanism would work in practice, striking a good balance
between reecting current commercial realities and the risk of abuse of the process.
In particular, it is interesting to note how the CAT discussed the lack of appeal
procedure for class certication as a decision by the legislature to avoid delays and
abuse of the system.
112 Walter Hugh Merricks CBE v MasterCard Inc. and others (Competition Appeal Tribunal, Case
1266/7/7/16) (hereinaer Mastercard).
113 Dorothy Gibson v Pride Mobility Products Limited (Competition Appeal Tribunal, Case
1257/7/7/16).
114 James Cooper, ‘Mastercard collective action not to proceed – implications’ (Lexology, 31 October
2017)
accessed 10 November 2017.
115 ibid.
116 ibid.
117 ibid.
118 ibid.
119 Swallow and Wickham (n 77).
106
e analysis of the approach in the UK to collective litigation as a whole shows how
the dierent mechanisms (GLOs, representative actions, etc.) are diverse and quite
advanced. While these mechanisms present some similar characteristics, the most
interesting approach taken so far is that of the mechanism related to competition
abuses, the CPO. e hybrid model that joins both opt-in and opt-out features is
preferable because it reects the reality of multi-party disputes. As Juska explains:
An opt-in model has the advantage from a legal perspective because it
limits the risk of unmeritorious actions. However, an opt-in model entails a
low participation rate. Opt-out collective actions generally ensure that the
group of claimants will be suciently large; as such, all claimants can share
the resources they will spend, aggregate the information they have gathered,
share the costs of lawyers and benet from a larger bargaining power with
respect to the representatives.120
Moreover, the CPO contains sucient safeguards to prevent abuse, as seen in
recent disputes with Mastercard and Pride, combining exibility with the more
commercially sensible recommendations made at the EU level. us, this collective
litigation mechanism could be ideal in Ireland due to its innovative nature in touch
with the commercial realities of modern multi-party disputes.
It is equally interesting to note that the CPO contains certain provisions on
safeguards against abuse that are similar to those found in the GLOs. erefore,
while the CPO model is applicable to sectoral competition disputes, it has features
that could expand its use to cover other areas of law that are currently covered by
the wider-ranging GLO mechanism. In this scenario it would advisable for Ireland’s
new model on collective litigation to be based on the UK’s CPO mechanism
(which could potentially be applied horizontally) rather than implementing the
original Law Reform Commission proposals, as these mirror a less innovative
collective litigation mechanism similar to the GLOs.
Concluding Remarks
e current Irish provisions applicable to mass harm litigation have been described
as out of touch with commercial reality and the wider trends developing in
Europe. While the Law Reform Commission’s original proposals contained some
noteworthy provisions that have been retained in the Multi-Party Actions Bill
2017, these do not reect all of the innovative provisions on collective litigation
operating in dierent jurisdictions, particularly neglecting the opt-out model for
claimant participation. European policy in the area has evolved signicantly in
recent times but, despite pointing in the right direction, it still lacks an organic
120 Juska (n 52) 22.
Proposal for Ireland’s Implementation of Collective Litigation Mechanisms 107
model that can build from a sectoral level to a horizontal application across dierent
areas of law. is article has demonstrated that among the various provisions in the
UK on collective litigation, the recently implemented CPO provisions in the area
of competition law have innovative features while maintaining certain safeguards
that would allow these provisions to successfully apply in disputes relating to other
areas of law. us, moving forward, it is recommended that a new Irish model on
collective litigation reects these innovative changes, and ultimately leads to a
system capable of engaging more eciently with multifarious disputes.
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