US-style class action idea to help ripped-off Irish consumers

IRISH consumers being ripped off by companies selling anything from insurance to holidays should be able to take US-style class actions to win compensation, the European Commission says.

The Consumers Association of Ireland agrees and says they will push for the law to be changed to allow such court actions to be taken in the future.

Ireland is one of 15 EU member states where it is not possible for consumers to come together and sue a company that has sold them a bad product.

EU Consumer Commissioner Meglena Kuneva says this should be changed as it would give consumers a faster and better redress, and warn off rogue companies giving a bad service.

“If a consumer wants to take a company to court but the costs of litigation are higher than the possible damages there is very little they can do at present. But collective redress could be an answer. We are examining the different possibilities and systems that exist in some member states and hope to bring forward policies next year,” she said.

This is part of a strategy to give people more confidence to shop cross-border in other EU member states when on holiday, and on the internet.

Dermot Jewell, chief executive of the Consumers Association of Ireland, said they support the idea.

“It should do something to help consumers who receive an appalling level of service for something they have paid for in advance, and have no means of real redress if they have to act on their own,” he said.

Examples of where it would have worked well recently included consumers who pay telecom companies up-front for a package that includes telephone, broadband and digital TV, but have to wait for the services to come on line, and fail to get the necessary back-up when they do arrive, he said. Another area it would help is that of financial services and insurance policies that promise more than they actually deliver, but the cost to a person of taking an individual case would be prohibitive, said Mr Jewell.

“It would be an excellent tool for consumers to put manners on some of these companies,” he added.

It will require a change in the law and a lot of work to ensure that it is a realistic option, and not just a way for lawyers to make money.

BEUC, the umbrella organisation representing the EU’s 500 million consumers in Brussels, supports the concept too.

Director Jim Murray said: “We certainly want to see action here.

“We believe that arguments for and against US-style class actions are often irrelevant here — what we want are collective actions that work in European conditions.”