The passage of the Representative Actions for the Protection of the Collective Interest of Consumers Bill 2023 in Ireland, signed into law into recent weeks, has implications for travel, hospitality tourism and aviation.
This legislation, based on an EU directive, allows consumers to file collective actions against companies for violations of their rights under consumer legislation. It aims to provide more effective remedies to consumers for mass breaches of consumer law.
With this new law in place, businesses in Ireland and across the EU need to be aware of the potential for class-action lawsuits and the impact they can have on corporate reputations. Companies should not only focus on legal readiness but also establish robust communications systems to handle the publicity that accompanies such lawsuits.
Class actions tend to attract more media attention due to their larger scale, and their coverage can disrupt a company’s operations and reputation regardless of the court’s verdict. Businesses should proactively prepare crisis management and reputation strategies and have strong public relations support in place. How a company presents itself in public during a class-action lawsuit can be just as important as the outcome of the case itself.
A class-action settlement may not distribute damages evenly among plaintiffs. Factors like the number of claimants, severity of injury, and litigation costs can impact individual payouts.
It is expected that legal departments will collaborate closely with communications departments to manage legal and reputation risks in the evolving landscape of consumer collective action.
Irish businesses with consumers across the EU must also be prepared for potential class-action lawsuits originating in other member states and the publicity these actions may generate on a European scale.
With information and legal protection flowing freely across EU borders, it is crucial for companies to prioritise reputation management, develop robust crisis strategies, and have strong PR litigation support in place to navigate this evolving landscape successfully.
