The Representative Actions for the Protection of the Collective Interest of Consumers Bill 2023 is groundbreaking legislation that allows consumers in Ireland and other EU countries to come together and file collective actions against companies for violating their consumer rights. This new law has the potential to completely change the legal landscape in Ireland and bring corporate reputations into the spotlight. It aims to provide consumers with more effective remedies for widespread breaches of consumer law.
Under the bill, qualified entities will represent consumers who have experienced similar infringements in areas such as data protection, product liability, financial services, tourism, travel, energy, telecommunications, and the environment. Businesses will be required to inform the represented consumers of any settlements or decisions within a specific timeframe, even if it comes at a high cost.
Irish companies with a consumer base across the EU also need to be vigilant about potentially becoming the target of a class-action lawsuit from another Member State. To protect against reputation-damaging lawsuits, companies must not only have legal readiness but also robust communication systems in place to handle the publicity that comes with these actions.
Class actions often receive significant media attention because of the higher stakes involved. National and international media coverage can disrupt a company’s operations and damage its reputation, regardless of the court’s decision. It is crucial for companies to have crisis management and reputation strategies in place, as well as strong public relations support. How a company behaves publicly can be just as important as the outcome of the case.
Consumers may find class-action lawsuits more appealing than individual cases due to the arduous nature of the legal process. However, the distribution of damages may not be equal among plaintiffs and depends on various factors such as the number of claimants, severity of injury, and litigation costs.
The growth of class actions in Europe is inevitable, and legal departments must collaborate closely with communication departments to manage both legal and reputation risks. Irish businesses with a consumer base across the EU must be prepared for consumer representative actions initiated in other member states and the potential publicity they may generate.
When a company’s reputation is damaged by anti-consumer behavior or allegations of such, crisis management plans are put to the test in real-time, particularly in the court of public opinion. By prioritizing reputation management, developing effective crisis strategies, and having strong PR and litigation support, firms can navigate an evolving legal landscape where information and consumer protection flow freely across EU borders. Ita Gibney, executive chair of Gibney Communications, with her extensive experience in corporate crises, emphasizes the importance of preparedness in managing legal and reputation risks in this evolving environment.
Ita Gibney is executive chair of Gibney Communications and has been at the forefront of many corporate crises in her 30-year communications career
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