We are pleased to share the Spring 2023 edition of the Matheson Horizon Tracker. As usual the Tracker describes key Irish and EU legislative and regulatory developments within the framework of the publication of the Irish Government legislative programme for that particular Oireachtas session. For this Spring 2023 session, rather than describing the legislative programme from a forward looking perspective, we decided to review progress of the programme through the Oireachtas session, now nearing its closure for Easter recess on 30 March 2023. Similarly, we have tracked progress of key developments from Europe and from national regulators, in particular the Central Bank, surveying the period from our last Autumn 2022 Horizon Tracker to our chosen 'as of' date of 13 March 2023.
A key characteristic of the current legislative period is that the European influence on legislative developments is particularly evident. Our Employment and Pensions Team consider legislation which anticipates or implements EU instruments, focussing on work – life balance measures, including the aptly named Work Life Balance Miscellaneous Provisions Bill (published in October 2022), and further analysing new protected disclosure legislation which transposes the EU Whistle Blower Protection Directive. As we all know, sustainability is a theme reflected in many EU legislative initiatives including the European Corporate Sustainability Reporting Directive (CSRD) which must now be implemented in Ireland before July 2024. This is coupled with the much discussed Corporate Sustainability Due Diligence Directive which is going through EU legislative processes at present. A recent initiative in that legislative process considers the inclusion of financial services in this directive.
Continuing with the sustainability theme, there are significant initiatives in the Financial Services sector. We are conscious of the fact that three of our practice areas engage with financial services generally speaking and so a collaborative overview of matters relating to this topic is important to us. For this reason we have a section in the Tracker collating all initiatives relating to Sustainable Finance. Even though the Taxonomy Regulation applied from 1 January 2022, its additional provisions that substantially contribute to other environmental objectives (sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; protection and restoration of biodiversity and ecosystems) apply from 1 January 2023. Article 8 of the Taxonomy Regulation requires additional disclosures from in-scope companies. Pursuant to the delegated act adopted under Article 8 of the Taxonomy Regulation, qualitative reporting by in-scope undertakings was required from 1 January 2022, with further requirements applicable to non-financial undertakings from 1 January 2023 and to financial undertakings from 1 January 2024 underpinning green financing, and indeed further addressing 'greenwashing'.
New legislation introducing the possibility of consumer class actions under the Representative Actions for the Protection of the Collective Interests of Consumers Bill 2023 implements the EU Directive on this subject which must be transposed by 25 June 2023. This legislation will fundamentally alter the civil litigation landscape in Ireland. The use of class actions is usually dependent on the accompanying recognition of third party funded litigation. As we point out, the success of the legislation will depend on the ability of the qualified entities, who are required to be non-profit, to fund mass actions on behalf of consumers. This is the beginning of further changes to the conduct of civil litigation stemming from the Kelly Report on the Administration of Civil Justice in Ireland and the Company Law Review Group Report supporting the introduction of funded third party actions in a limited context in insolvency related matters. Some of these changes have been available in neighbouring jurisdictions such as England and Wales for some years, but have not taken place to date in Ireland due to application of older common law rules on champerty and maintenance, the latter having been identified by the Supreme Court as an impediment to access to justice in a number of recent cases of note.
Uncertainty due to geopolitical events was the focus last year. As we know, this uncertainty continues, coupled now with some uncertainty in the financial sector with banking sector troubles very much in the news these days with the collapse of Silicon Valley Bank and the takeover of Credit Suisse by UBS. Insolvency and rescue matters will be on everyone's radar. In this space clients will be advised in relation to directors' duties to consider creditors' interests when a company is in financial difficulty. These duties have now been put on a statutory footing by the European Union (Preventive Restructuring) Regulations 2022 (the "PRR") clarifying that the duties extend to situations where insolvency is merely likely. (However, see the UKSC judgement in Sequana for an interpretation of the similar common law and UK standard). In addition, the Corporate Enforcement Authority published an Information Note in January 2023 which sets out a non-exhaustive list of indicators of actual, or potentially approaching circumstances of financial difficulty to which directors should have regard. Further changes in the insolvency area are heralded by the draft Directive on Harmonisation of Insolvency Law currently under consideration by the EU Commission and Member States.
Click here to explore the Matheson Horizon Tracker.