Ireland lacks a simple way for litigants to bring combined actions. Following the tracker mortgage scandal last year, there has been another attempt to pave the way for multi-party actions (MPAs). Based on the Law Reform Commission’s 2005 Multi-Party Litigation Paper, this new Bill has re-invigorated the political debate on the topic.
The Multi-Party Actions Bill 2017
The Multi-Party Actions Bill 2017 was introduced to the Dáil last November as a Private Members Bill. Sponsored by Donnchadh Ó Laoghaire, Sinn Fein Spokesperson on Justice and Equality, and Pearse Doherty, Sinn Féin Spokesperson on Finance and Public Expenditure and Reform, it is entitled as ‘an Act to provide for certain procedural and other changes in civil actions so as to provide for the bringing of Multi-Party Actions; to reduce the cost of litigation; and to provide for related matters.’
Contents of the Bill
The Bill sets out the process whereby a party can join a multi-party action. They would first have to find out if there is an ongoing multi-party action which is relevant to their action. Applications would first go to the President of the High Court who would nominate a judge to decide whether or not to certify the creation of a multi-party action. Per section 2(4), the judge ‘shall consider, in particular, whether in the light of the common or related issues of fact or law arising — (a) there are or are likely to be multiple cases giving rise to Multi-Party Action issues, and (b) a Multi-Party Action offers an appropriate, fair and efficient procedure for the resolution of the Multi-Party Action issues.’
If it passes the test, a multi-party action order would be made which allows all parties to be put on the Register as part of the action. Section 3 contains the contents of multi-party action order. Other parties can join the Register by applying to the nominated judge, per section 4.
The nominated judge can issue directions to ensure the ‘appropriate, fair and efficient resolution’ of the action such as ‘(a) specifying the details to be included in the documents grounding an application for entry of proceedings on the Register; (b) any necessary directions concerning the specific Multi-Party Action issues; (c) any further directions necessary for the appropriate, fair and efficient resolution of the Multi-Party Action issues.’
Section 6 covers the appointment of a ‘Lead Solicitor’ to handle the multi-party action. The solicitor is chosen by all the parties involved in the action. Where they all agree, then the solicitor applies to the nominated judge to be recognised as the lead solicitor for the purposes of the action. If the parties cannot agree, or if the judge refuses to allow the chosen solicitor be deemed as the lead solicitor, then the judge ‘shall hear submissions as to the appointment of a lead solicitor for the Register and shall make an appointment accordingly.’ Section 6(4) allows the judge to appoint more than one Lead Solicitor, which serves as a catch-all provision.
Once a lead solicitor is chosen, ‘the nominated judge shall arrange for the holding of a case conference with a view to deciding whether to select a lead case or lead cases for the resolution of a Multi-Party Action issue or issues.’ They must be satisfied the lead case(s) ‘fairly and adequately represents the interests of all those on the Register.’
The key point of multi-party litigation is included in section 8, which notes the result of a judgement on a leading case. The judgement or order ‘shall be binding in all other proceedings that are entered on the Register at the time the judgment or order is given, unless the nominated judge orders otherwise, and the nominated judge may give directions as to the extent to which the judgment or order is binding on the parties in any proceedings which are subsequently entered on the Register.’
The benefits of multi-party litigation are also reflected in section 9 cost orders. Any relevant costs from the action are divided ‘equally among the members of the Register, unless the nominated judge orders otherwise.’ If the action fails, ‘members of the Register shall be jointly and severally liable for costs.’
The Bill in the Oireachtas
The Bill passed through two stages and was debated by the Joint Committee on Justice and Equality on the 21st February 2018. Doherty, Ó Laoghaire and Senator Colette Kelleher attended the debate. The experts invited to take part were Dave Coleman, a solicitor with Coleman Legal Partners, Eilis Barry and Paul Joyce from the Free Legal Aid Centre (FLAC), and Dr Joanne Blennerhassett of the Sutherland School of Law, UCD.
Ó Laoghaire gave the opening statement as a sponsor of the Bill, the witnesses each gave statements, then the floor was opened up for a debate. Ó Laoghaire first noted that there were several methods of group litigation in Ireland, but these contained many deficiencies. The representative case model only offers injunctive and declaratory relief, but not damages. The test case model is a popular method in Ireland, but has several drawbacks, with the main one being an unsuccessful action will usually result in significant legal costs.
Doherty also made an opening remark and stated, ‘it is 13 years since the Law Reform Commission’s report on multi-party action legislation. It is clear that we are not the only outlier in the European Union, but compared with our peers, we are an outlier in not providing this type of course of action to litigants.’ He said he began to look into the issue following the tracker mortgage scandal.
The Experts’ Speeches
First up was Elis Barry from FLAC, who said that while FLAC supports the Bill, it is concerned about the lack of legal aid for multi-party litigation. People would still need to obtain legal advice before entering the register for a multi-party action, so it would still be potentially off-putting to many. She noted that the LRC envisaged dealing with this issue in Appendix B of its 2005 report by extending the Civil Legal Aid Act to multi-party actions.
Barry then addressed the government’s criticisms of the Bill, with the main one being that this was a matter of court reform that should be dealt with through the Superior Courts Rules Committee, as opposed to legislation. She said the Bill could be amended to allow the Committee to set out the procedural rules. The government noted the LRC’s report was old, so newer developments should be considered. Barry stated that while FLAC ‘agrees that it is wholly appropriate to consider these developments, none of them suggests the current lack of provision for multi-party actions is in any way justified or should be maintained.’
The government have argued the appointment of a lead solicitor could cause disputes where a party seeking to join a multi-party action wants to use their own solicitor. This refusal could infringe the constitutional right of access to the courts. Barry said the scheme was optional, while the nominee judge must ensure the ‘lead case fairly and adequately represents the interests of all those on the register.’
Mass Harm and MPAs
Joanne Blennerhassett was next to make a statement. She explained her legal background, including her involvement in researching the issue over the past ten years. There must be a system to respond to mass harm, which is ‘severe or widespread damage which usually causes harm to many victims’, and she noted recent mass harm issues like ‘the Volkswagen emissions scandal, pyrite damage, contaminated blood products, Army deafness claims, asbestos-related ill health and the recent tracker mortgage rate abuse by banks.’
‘MPAs, by enabling victims of mass harm to combine their legal actions, can be a key tool in achieving access to justice. Litigants can overcome many of the impediments that they face in taking legal actions individually. It gives strength in numbers. It allows them to pool their resources because very often they deal with David versus Goliath-type scenarios.’
She referenced the pyrite construction case, in which 550 homeowners had to bring individual claims, and said it typified ‘the problems inherent in the current procedures whereby plaintiffs must initiate separate and individual claims and seek damages at huge cost, delay and causing wasteful inefficiencies.’
Blennerhassett noted legal aid funding does not cover any type of MPA or test case and concluded that ‘due to the lack of an appropriate MPA mechanism, other methods are used by way of improvisation thus causing appalling delays, costs and injustice.’ She called for the adoption of a ‘modern holistic approach’ which ‘requires a combination of legal tools, including regulation, alternative dispute resolution, the courts and ombudsmen.’ The Bill ‘is the best option we have at the moment for creating a procedural mechanism to deal with multi-party litigation.’
Practical Aspects of the Bill
The next speech came from Dave Coleman, founder of Coleman Legal Partners, who specialises in group party litigation. He gave a detailed explanation of the issues with the ‘lead plaintiff’ provision. There will be slight differences between each party, so there will be a ‘degree of subjectivity’ around choosing the lead. The lead must also be able to withstand any cost orders. Coleman noted judges have often made interim cost orders against plaintiffs over issues like late filing of papers. ‘One might blame the solicitor for that but when one is running a mass tort, one may have several thousand people to deal with and it is not always possible to get it right according to the timeline the judge sets out.’
Coleman criticised the interim cost order rules against plaintiffs, which ‘allows any defendant, most of which are large corporations or, indeed, the State, to adopt their first defensive strategy, which is to play the man and not the ball.’ A defendant who can successfully get a plaintiff nominated as a test case under the current rules is at an advantage.
Regarding parties joining an action, he suggested that the two legal teams would be better placed to decide the matter, instead of applying to the High Court to be put on a register. ‘To have these differences aired in court, when it is quite clear to both parties as trained lawyers that somebody is in or out, is a waste of the court’s time. It will certainly clog up the system, a system designed to simplify the process and to make it less expensive.’
Jim O’Callaghan, a Fianna Fail TD, asked if these actions could see lawyers take a large percentage of the award for themselves, as occurs in America. Barry replied that the Bill ‘is quite a modest proposal’ that is more focused on case management, while Blennerhassett stated this practice is illegal in Ireland. Questions and comments from other TDs then turned towards the underlying problem of high legal costs.
The Bill would help bring about a positive change in the legal industry, but currently lacks government support. The discussions before the Committee on Justice and Equality showed there is cross-party interest in change, even if some of that support comes from the politicisation of the tracker mortgage scandal.
Cian Carton – Editor