noyb – European Center for Digital Rights ("noyb") has become the second organisation to be designated as a qualified entity ("QE") by the Minister for Enterprise, Trade and Employment (the "Minister") under the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the “Act”). This follows the similar designation of the Irish Council for Civil Liberties ("ICCL") in June of this year (discussed in our previous update).
Representative actions under the Act, which implemented the EU Representative Actions Directive (the "Directive") in Ireland and was commenced at the end of April 2024, can only be brought by a QE acting on behalf of consumers impacted by infringements of prescribed consumer legislation.
The Register of QEs that the Minister is required under section 16 of the Act to keep and maintain, has been updated to reflect this latest designation. The Register, which is available on the Department of Enterprise, Trade and Employment website here, records that noyb has complied with the designation requirements of section 8(1) of the Act and has been designated as a QE with effect from 11 October 2024.
The criteria set out in section 8(1) of the Act require that the organisation in question:
- be a legal person with 12 months of public consumer protection activity prior to the application;
- demonstrate, as its main purpose, a legitimate interest in protecting consumer interests under certain legislation detailed in the Schedule to the Act;
- be non-profit-making and solvent;
- be independent and have procedures in place to ensure that it is not influenced by, and to prevent conflicts of interest with, traders or other persons with an economic interest in bringing a representative action (including in the event of funding by third parties); and
- make publicly available certain information, including confirmation of their compliance with each of the above points, together with its source of funding, its organisational, management and membership structure, any statutory purpose it may have and its activities.
As well as being designated as a QE for the purposes of bringing domestic consumer representative actions, both ICCL and noyb have also been designated as cross-border QEs and have been listed as such in the relevant European Commission’s list. This means that ICCL and noyb are able to take cross-border representative actions elsewhere in the EU. Similarly, all of the other cross-border QEs included on that list, are able to bring a cross-border representative action in Ireland.
Despite the number of QEs expanding, both domestically and across the EU (there are now 37 cross-border QEs recorded on the European Commission's list of such entities), the current restrictions on third-party litigation funding in Ireland remains a potential barrier to the ability of a QE to pursue a representative action in the State. As we have discussed previously (including here), although section 29(1) of the Act provides that QEs are able to charge a fee to consumers seeking to join a representative action, that has subsequently been capped in Ireland at a maximum of €25 per consumer per representative action and so is unlikely to represent a sufficient funding source unless an extremely large number of consumers are involved.
noyb is a non-profit organisation with its aims including the enforcement of data protection laws. noyb's website now includes a page entitled "Collective Redress", which sets out the information it is required to make publicly available under the Act, including details of the source of its funding. This notes that it is mainly funded via membership fees from its supporting members and institutional members, as well as receiving funding from foundations and organisations. In its most recent Annual Report (from 2023), noyb states that it will take direct action against companies, including through collective redress (and references the Directive), but it also acknowledges that will be a "challenge on an organisational, technical and resource level".
No representative actions have been commenced by noyb as yet and it remains to be seen whether it will have adequate resources available to fund such actions in Ireland in the absence of third party litigation funding.
We will continue to monitor for any further developments in this area.
If you have any queries about anything discussed in this insight, please contact Commercial Litigation and Dispute Resolution partners Julie Murphy-O'Connor or Michael Byrne or your usual Matheson contact.