Key Points
- Ireland's Implementation of the EU's Representative Actions Directive: the role of collective redress.
- Status of third-party litigation funding in Ireland.
- Impact of the New Product Liability Directive on the life sciences sector.
- Trends in Ireland in this space, with an increase in the level of damages imminent.
It is fair to say that the last number of years have seen a shift in terms of the shape of the liability regime for the life sciences industry, as well as industry more broadly. These legislative changes pose some significant compliance challenges and potential litigation risk for the future. What is this new legal landscape and what are the main changes?
Representative Actions
The EU's Representative Actions Directive (the "Directive") is something which has garnered much attention over the last number of years. In short, it was a groundbreaking initiative by EU lawmakers which lists 66 pieces of EU law in its Annex. A breach of one of those laws could give rise to a claim by a qualified entity or QE to bring an action on behalf of a group of consumers – so a de facto class action.
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the "Act") transposed the Directive into Irish law. The Act, which commenced on 30 April 2024, introduced a new civil litigation mechanism in Ireland through which representative actions can be brought by QEs on behalf of consumers for alleged infringement of their rights under relevant enactments listed in the Schedule to the Act. We set out more in our briefing: Representative Actions in Ireland - 2024 in Review.
Medicines for human use and medical devices are in scope.
A QE means a legal person or public body representing consumers' interests which has been designated as such by the Minister for Enterprise, Trade & Employment or a Member State (other than Ireland), as qualified to bring representative actions. In Ireland, the two designated are currently listed as:
- The Irish Council for Civil Liberties (designated as of 6 June 2024); and
- noyb (European Center for Digital Rights) (designated as of 11 October 2024).
A representative action can be domestic or cross-border in nature and can pursue injunctive relief and/or redress in respect of alleged infringements by traders under the relevant enactments.
Notwithstanding the commencement of the Act and the designation of QEs, the effectiveness of the Act is tempered by the absence of reform of the current prohibition in Ireland on third-party litigation funding, save for very limited circumstances. The issue of third-party litigation funding is the focus of an ongoing review by the Irish Law Reform Commission (the "LRC"). See more in our briefing: Closure of Deadline for Submissions on the Law Reform Commission's Consultation Paper on Third Party Litigation Funding.
The LRC recommendations on the issue are highly anticipated to see whether there will be any relaxation of the existing prohibition on third-party funding, and if so, what recommendations are made as regards the regulation of third-party litigation funding.
Notwithstanding all of the above, as at the time of publication, we understand one set of proceedings to have issued in the High Court in Dublin, where the QE is the Irish Council for Civil Liberties and the claim is against Microsoft Ireland Operations Limited.
New Product Liability Directive
The new Product Liability Directive (the "New Directive") is set to bring significant changes to the life sciences sector.
The New Directive repeals and replaces its 1985 predecessor. However, the previous regime will continue to apply to products placed on the market or put into service before 9 December 2026, making information as to date of placing on the market critical in terms of defence of any future claims.
The New Directive has brought in some major changes. Some key reforms are below:
1. The definition of "product" has been expanded to include electricity, digital manufacturing files, raw materials, and software (including AI systems). While the New Directive does not define "software", certain forms are outlined in the Recitals, including AI systems. It also covers products integrated into or interconnected with other products. However, it excludes free and open-source software developed or supplied outside commercial activity. New provisions address liability for digital services that affect product functionality.
2. There is a new concept of "economic operator" which means a manufacturer of a product or component, a provider of a related service, an authorised representative, an importer, a fulfilment service provider or a distributor. Where an economic operator established in the EU cannot be identified, each distributor of the defective product is liable if the distributor fails to identify an economic operator established in the EU or its own distributor upon request. This also applies to any provider of an online platform that allows consumers to conclude distance contracts with traders who are not economic operators.
3. The concept of injury now includes "medically recognised damage to physiological health" as well as "destruction or corruption of data not used for professional purposes".
4. Member States can choose to introduce the so-called "development risks defence" and must notify the European Commission of their intention on this point no later than 9 December 2026. This defence provides that the objective state of scientific and technical knowledge at the time the product was placed on the market/ put into service/ within the manufacturer's control was not such that the defectiveness could be discovered. This defence can be a key plank in the defence of product liability claims for the life sciences industry. Ireland and many other Member States had incorporated this defence into national law under the previous product liability regime. Several other defences are also available.
5. The ten-year-long stop period from placing on the market, following which a person is no longer entitled to seek compensation, remains. However, a new concept of latency has been introduced, whereby if a person has not been able to initiate proceedings due to the latency of a personal injury, their ability to claim compensation shall expire after 25 years. This will impact document retention and traceability.
6. A claimant is still required to prove the defectiveness of a product, the damage suffered and the causal link between the defect and the damage. However, there is a presumption of defectiveness or no-fault liability which can apply if certain criteria can be met – which it is then for the defendant to attempt to rebut. The New Directive introduces no fault-based liability for producers and presumes defectiveness where (a) the defendant fails to disclose "relevant evidence," (b) the claimant demonstrates that the product does not comply with mandatory safety laws, or (c) the claimant demonstrates that the damage was caused by an obvious malfunction of the product. There is an onus on Member States to make provision for the disclosure of the evidence piece set out in detail in Article 9.
Numbers five and six in the list above could be seen as arguably more pro-plaintiff and will certainly pose challenges in the defence of future claims. There are potential compliance challenges, more generally for economic operators, posed by the New Directive, and those involved at all stages of the supply chain will need to ensure they are ready to be compliant with the new regime in order to minimise risks. We set out more in our briefing: The EU Rings in New Changes for Product Liability and Product Safety.
Trends – Ireland
An increase in the level of awards in the Personal Injuries Guidelines, to which the Irish courts must have regard in assessing general damages in personal injuries claims, the category of claim in which product liability claims are often brought, is imminent. In February 2025, the Judicial Council proposed a 16.7% increase to personal injury awards to take account of a rise in inflation since the adoption of the Personal Injuries Guidelines in 2021. The proposed amendments have now been referred to the Minister for Justice and will then be laid before both Houses of the Oireachtas (the Irish parliament) for approval, the timeframe for which is uncertain.
What's Next?
On the representative actions side and with more than 70 cross-border QEs now designated at a European level, it seems likely that cases will start to flow in jurisdictions which permit litigation funding. As most life sciences companies operate across various EU jurisdictions, it will be important to understand the ramifications of threatened litigation at a local level and to be live to potential risk. Progress of the case before the Irish High Court, mentioned above, will be of note.
It remains to be seen if a general multi-party action framework is introduced in Ireland, as recommended in the Report of the Review Group on the Administration of Civil Justice published in 2020 and how this would sit alongside the existing representative actions regime. With life sciences products often in the spotlight, this continues to be an important area to monitor and keep on top of.
The awaited recommendations from the LRC on litigation funding will significantly impact the collective actions landscape in Ireland. The regulation of litigation funding will form an important part of the overall analysis as to whether the prohibition against litigation third-party funding should be relaxed, and it is important to keep European developments in this regard under review.
On 21 March 2025, the European Commission published its report, "Mapping Third Party Litigation Funding in the European Union". The results of this report will be used to inform future policy decisions concerning third-party litigation funding, including its response to the European Parliament resolution on 13 September 2022 on responsible private funding of litigation, which called upon the European Commission to propose legislation that would regulate third-party litigation funding in the EU. See more in our briefing: Third-Party Litigation Funding developments at the European Commission.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.