Dispute resolution & litigation in 2025

As we move into 2025, Ireland's legal framework is experiencing ongoing developments, influenced by both global trends and local legislative changes. This briefing provides an overview of key litigation trends, focusing on Alternative Dispute Resolution, Artificial Intelligence, representative actions, ESG litigation, and third-party funding.

Alternative Dispute Resolution (ADR)

The landscape of ADR in Ireland continues to evolve, with recent developments reflecting a growing preference for ADR as a way of resolving disputes efficiently and cost-effectively. The Law Society of Ireland recently introduced an updated 2024 ADR Guide for solicitors, highlighting the importance of understanding various ADR techniques and advising clients on their options outside of the court process. This comprehensive guide covers mediation, arbitration, expert determination, construction adjudication, conciliation, and other forms of ADR such as facilitated negotiation, early neutral evaluation and mini-trials.

The courts play a crucial role in promoting mediation. Under section 16 of the Mediation Act 2017 (the “2017 Act”) courts can invite parties to consider mediation and may adjourn proceedings to facilitate this. Under section 21 of the Act, a court may consider unreasonable refusals to mediate when awarding costs, a provision that has gained significant traction recently.

Irish courts increasing support of ADR is evident in several recent judgments emphasising the benefits of mediation and arbitration in resolving disputes efficiently. Courts have also been proactive in encouraging parties to consider ADR before proceeding to trial, reflecting a significant shift towards promoting ADR as a primary means of dispute resolution.

The recent High Court decision in Byrne, Hyslop & Kerrigan v Arnold⁽¹⁾ highlights the importance of adhering to the obligations set out in the Act. In this case, the court imposed a cost penalty on the successful plaintiff due to the solicitor’s failure to comply with section 14 of the 2017 Act. This section obliges solicitors to advise their clients to consider mediation as a means of resolving disputes, provide information about mediation services, and explain the benefits of mediation. This case demonstrates the potential consequences of non-compliance and the critical role of mediation in the wider disputes process
Looking ahead, the emphasis on ADR is expected to grow, with courts continuing to encourage its use and legal practitioners increasingly integrating ADR into their practice. This evolution reflects a broader trend towards more collaborative and less adversarial approaches to dispute resolution, promising a more efficient, less costly and harmonious legal landscape in Ireland.

Artificial Intelligence (AI)

The rapid transformation of the legal industry through the integration of AI presents both new opportunities and challenges. On one hand, AI technologies are enhancing efficiency, reducing costs, and improving accuracy in various legal tasks such as document review, legal research, and contract analysis. On the other hand, the adoption of AI also brings challenges related to data privacy, ethical considerations, and the need for regulatory compliance. As the legal sector navigates these changes, it must balance innovation with the protection of fundamental rights and the maintenance of professional standards.

The EU's AI Act, which came into force on 1 August 2024, marks a significant milestone in AI regulation. This Act aims to balance innovation with safety and transparency by classifying AI systems into risk categories based on their potential impact. In October 2024, the government announced nine national public authorities responsible for protecting fundamental rights under the EU AI Act, fulfilling Ireland’s first obligation for its national implementation.

The Irish Data Protection Commission (the “DPC”) has been actively involved in regulating the use of AI, particularly concerning personal data. As a practical example of the role of the DPC, earlier this year, Meta paused plans to use personal data to train AI models, following a request from the DPC. This regulatory oversight ensures that the use of AI in Ireland adheres to stringent data protection standards.

The integration of AI into the legal industry is expected to significantly deepen in 2025, with advancements in AI technology continuing to enhance the efficiency and effectiveness of legal practice. As we witness the rise of AI enabled ‘smart-courts’ in jurisdictions like China, one might question how far Ireland is from adopting similar innovations in its judicial system.

Representative Actions

The introduction of representative actions marks a key development in the Irish legal landscape. The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023, which came into force on 30 April 2024, transposes Directive (EU) 2020/1828 into Irish law. This Act allows groups of consumers to take collective actions before the Irish High Court through bodies known as Qualified Entities (“QEs”). The Irish Council for Civil Liberties and the European Centre for Digital Rights were designated as the first QEs in Ireland this year. Will 2025 see more QE designations?

QEs are designated by the Minister for Enterprise, Trade and Employment and must be independent, non-profit legal persons with at least one year of activity protecting consumer interests. These entities can seek injunctive or redress measures on behalf of consumers. The Act covers a range of claims, including those related to general consumer rights, financial services, package holidays, medical devices, and data protection.

The introduction of representative actions represents a shift towards enhancing consumer rights and access to justice in Ireland. This development is expected to influence future litigation trends as we await the first such action to be taken in this jurisdiction, potentially setting important precedents and shaping the future landscape of collective legal actions.

ESG Litigation

ESG litigation continues to become increasingly prominent in Ireland, mirroring global trends. Ireland's ESG-related legal framework has been significantly shaped by EU policy initiatives. The Corporate Sustainability Reporting Regulations 2024, which transpose the Corporate Sustainability Reporting Directive (EU) 2022/2464, came into effect on 6 July 2024.

These regulations take effect for financial years starting on or after 1 January 2024 for public interest entities (over 500 employees). Other large companies (meeting at least two of the following: balance sheet over €25 million, turnover over €50 million, or over 250 employees) will follow from 1 January 2025, and listed SMEs will begin reporting from 1 January 2026, with an opt-out option available until 2028. Companies in scope will be required to report on a double materiality basis, disclosing both the risks they face from a changing climate and other ESG matters (financial materiality) and the impacts they themselves have on climate and society (impact materiality).

The establishment of a new division of the High Court dedicated to Planning and Environmental cases in December 2023 highlighted the increasing significance of climate and environmental issues in Irish litigation. Throughout this year, the Planning and Environmental Court has continued to innovate, most recently demonstrating its commitment to continuous improvement by seeking to facilitate an open dialogue with stakeholders to enhance the operation of the Planning & Environmental List. Furthermore, the court has been actively encouraging parties to avail of the expedited hearing process to manage the volume of cases more efficiently.

ESG litigation is poised to become a significant aspect of the legal landscape in Ireland. The emphasis on sustainability, transparency, and accountability will likely drive further legal actions, compelling companies to adhere to higher standards of corporate governance.

Third Party Funding

Third party funding (TPF) has long been a topic of interest in the Irish legal context, and recent legislative developments have ensured it remains at the forefront of legal discussions. The introduction of the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the “2023 Act”), discussed above, has also impacted litigation funding by permitting the funding of representative actions “insofar as permitted in accordance with law”, as outlined in section 27 of the 2023 Act.

The Third-Party Funding Contracts (Certain Proceedings) Bill 2024, which is currently at the Second Stage of the legislative process, provides that the offence of maintenance or champerty does not apply to certain proceedings, including arbitration and mediation. This change opens new avenues for TPF for these types of dispute resolution and further highlights the prominence of ADR.

As TPF continues to evolve, it remains a key trend in the Irish system, set to reshape the way disputes are financed and promoting greater access to justice. Given the incremental approach to legislative change seen thus far, it remains to be seen whether future developments will continue to follow the 'statutory exceptions' approach or if the legalisation of TPF will take a more prominent footing in the Irish legal system. While the abolition of the offences of maintenance and champerty, with or without the retention of the public policy rules that underpin them, could significantly impact this evolution, it is a development we are unlikely to see in the immediate future.

Key takeaways

Litigation in Ireland in 2025 is set to be shaped by several key trends. The growing emphasis on ADR reflects a shift towards more efficient and collaborative dispute resolution methods. The integration of AI in the legal sector promises enhanced efficiency but also brings challenges related to data privacy and ethical considerations. The introduction of representative actions marks a significant step towards enhancing consumer rights and access to justice. ESG litigation is expected to drive higher standards of corporate governance, while continued developments in TPF will allow greater access to justice. These trends collectively indicate a dynamic and evolving legal framework in Ireland, paving the way for innovative practice and improved legal processes.

 

(1) IEHC 308