While inflation is projected to ease to around 2% in 2026, the cost of doing business remains unsustainably high. SMEs continue to face rising costs in energy, insurance, wages, and compliance, with little in this Budget to deliver the structural reform needed to support competitiveness or protect local employment.

While there are some reliefs for some businesses in terms of VAT reductions, these do not commence until the second half of 2026, while the cost increases associated with the minimum wage increase and auto enrolment will be immediate in January. Not all SMEs will make it through the next six months.

With the US economy under self-inflicted severe strain, and bond markets signalling fiscal stress in both France and the UK, ISME hoped for step-change but unfortunately, Budget 2026 has delivered only incremental change.

ISME highlights that Ireland already spends heavily on enterprise supports, but much of it is captured by large foreign companies. Among the issues ISME are highlighting include that R&D tax credits are concentrated in multinationals, with limited impact on SMEs. €1.5 billion sits idle in bank deposits that could be channelled into SME capitalisation via an Irish version of the UK’s ISA.

Meanwhile, the association warns that SME credit continues to fall in retail, hospitality and construction due to cost pressures and excessive risk.

Neil McDonnell, Chief Executive of ISME, said: “If we want to scale our indigenous enterprise base, we need ambitions and goals in the spirit of Ardnacrusha or Whitaker’s Programme for Economic Expansion.”

In its Pre-Budget submission, released in May this year, ISME made a number of recommendations to address this imbalance favouring large multinational businesses over Irish SMEs. These included:

1. Business Costs – A reset on the national minimum wage calculation, legal reforms to deter vexatious lawsuits, and the reintroduction of the insurance ‘Blue Book’ to improve market transparency.

The European countries with the highest wages in Europe- Denmark, Switzerland, Norway, and Iceland, do not have a minimum wage. The UK has a higher minimum wage than Ireland, but its median wage is lower. Minimum wage rates are not the driver of higher earnings, only the productivity of the workforce.

While not a direct Department of Finance output on budget day, they must recognise that as long as the wider legal lobby continues to push for higher awards in a country which already has the highest personal injury awards in Europe, the costs of insurance will increase.

Ireland’s tax code has become one of the most complex in the world. ISME believes that a comprehensive simplification of the tax system is long overdue — to reduce compliance costs, improve transparency, and make it easier for businesses and individuals to plan and invest confidently.

2. Indigenous Enterprise Policy – Targeted tax reliefs for Irish entrepreneurs, a reduction in VAT thresholds for exporters, and formal SME representation on the Labour Employer Economic Forum (LEEF).

In order to stimulate exports, a stated aim of Government policy, ISME proposed a change to Revenue rule Section 56 on VAT treatment for exporters. This would have cost the Exchequer nothing. This was flagged well in advance by ISME and has been omitted from the proposed Finance Bill. There remains time to rectify this silly omission before publication of the Finance Bill.

Our entrepreneurial taxes have required an overhaul for many years, one which would not cost us any real money. Yet again, we find that the EII, KEEP, and SURE systems have not been addressed. CGT has been maintained at 33%, which is costing the Exchequer at least €500m per annum.

The increase in the lifetime entrepreneurial relief from €1m to €1.5m is welcome, but is too small to encourage serial angel investors.

Improvement and simplification of the R&D tax credit is welcome, but to date, this credit has been overwhelmingly confined to the FDI sector. The taxpayer is subsidising multinational pharma and technology at the expense of indigenous enterprise. We welcome a greater targeting of this credit at the SME sector, but caution that it must not be strangled with regulation and red tape.

3. Skills and Training – National Training Fund resources to be redirected towards lifelong learning and upskilling and a new ‘Blue Cert’ in business management aimed at SME owners and managers.

The failure to increase the Skillnet budget is a worrying development. Employers are levied €1bn per annum into the National Training Fund, of which they can access a paltry €60m (6%) of training funding, which they must match by at least two to one. The training levy is meant by law to be spent on life-ling and in-work learning, and our workforce has never been in such need of upskilling as now.

4. Public Finances – ISME cautions against funding permanent current spending with volatile corporation tax receipts. The submission proposes a standing Public Pay Commission, greater use of the Rainy Day Fund, and reforms to the PRSI system to ensure fair contributions.

An increase of 8% in the Social Protection budget for 2026, when inflation is running at 2%, is worrisome.

In order to stabilise the massive unfunded deficit in our old-age pensions system, ISME called for an adjustment in PRSI to apply a 2% rate to all earnings, and a 6% rate to marginal earnings over €424 per week. We estimate this would increase contributions to the social fund by in excess of €850m per annum.

There is no voice for young people at the cabinet table. The constant increases in current spending which are funded by itinerant corporation taxes will ultimately impoverish young people. We need to take a longer-term and sustainable view of our public spending and our public pensions policies.

5. Housing – With housing now acting as a de facto business cost, ISME called for tax incentives to unlock rental supply.

The VAT cut for apartment building is a most welcome stimulus in an area where we need to quickly increase output. Contrary to erroneous commentary from the Department of Finance, suggesting a cost of €250m for this measure, it will cost the Exchequer nothing, since the industry is simply not providing this accommodation now.

The increase in derelict property reliefs is substantial, and we hope will encourage much higher levels of participation.

The rental profit cost rental scheme which will exempt cost rental schemes from corporation tax is a sensible proposal.

Enhanced corporation tax deductions for conversions to apartments is also a wise move. The improvements to the Living City Initiative we hope will increase participation in this scheme.

The stamp duty extension for residential developments is a sensible measure.

These stimuli, while welcome, are far below what is required to get builders and landlords to re-enter a dysfunctional, over-regulated and over-taxed sector.

To help address housing supply immediately, ISME recommends a temporary Capital Gains Tax reduction to 20% for a 12-month period for “accidental landlords” who sell their properties to first-time buyers. This would free up existing housing stock, improve market mobility, and provide a practical short-term boost to home ownership.

In summary, Budget 2026 is steady but unambitious.

ISME’s full Pre-Budget Submission can be found online – https://isme.ie/wp-content/uploads/2025/05/ISME-Pre-budget-Submission-2026.pdf

With the US economy under self-inflicted severe strain, and bond markets signalling fiscal stress in both France and the UK, ISME says Ireland cannot continue with “incremental change” when our nearest trading partners are in difficulty.

ISME highlights that Ireland already spends heavily on enterprise supports, but much of it is captured by large foreign companies. Among the issues ISME are highlighting include that R&D tax credits are concentrated in multinationals, with limited impact on SMEs. It also says the KEEP (Key Employee Engagement Programme) is overregulated and failing, leaving domestic firms unable to retain skilled staff against multinational employers. €1.5 billion sits idle in bank deposits that ISME say could be channelled into SME capitalisation via an Irish version of the UK’s ISA.

Meanwhile, the association warns that SME credit continues to fall in retail, hospitality and construction due to cost pressures and excessive risk.

Neil McDonnell, Chief Executive of ISME, said: “If we want to scale our indigenous enterprise base, then Budget 2026 needs to set out bold, measurable goals for Irish business. Ministers Donohoe, Chambers, Browne and Burke should be setting ambitions and goals for their departments, in the spirit of Ardnacrusha or Whitaker’s Programme for Economic Expansion.”

In its Pre-Budget submission, released in May this year, ISME made a number of recommendations to address this imbalance favouring large multinational businesses over Irish SMEs. These included:

1. Business Costs – A reset on the national minimum wage calculation, legal reforms to deter vexatious lawsuits, and the reintroduction of the insurance ‘Blue Book’ to improve market transparency.
2. Indigenous Enterprise Policy – Targeted tax reliefs for Irish entrepreneurs, a reduction in VAT thresholds for exporters, and formal SME representation on the Labour Employer Economic Forum (LEEF).
3. Skills and Training – National Training Fund resources to be redirected towards lifelong learning and upskilling and a new ‘Blue Cert’ in business management aimed at SME owners and managers.
4. Public Finances – ISME cautions against funding permanent current spending with volatile corporation tax receipts. The submission proposes a standing Public Pay Commission, greater use of the Rainy Day Fund, and reforms to the PRSI system to ensure fair contributions.
5. Housing – With housing now acting as a de facto business cost, ISME is calling for tax incentives to unlock rental supply, support for student accommodation, regeneration grants, and accelerated investment in water infrastructure to enable development.

ISME’s full Pre-Budget Submission can be found online – https://isme.ie/wp-content/uploads/2025/05/ISME-Pre-budget-Submission-2026.pdf

(Ends)

As we approach Budget 2026, set for Tuesday 7^th October, ISME is concerned that the Government is considering diverting some of the National Training Fund (NTF) surplus into spending on third-level institutions. In our view, and that of the majority of SME employers throughout Ireland, any such development would be regarded as a serious misjudgement.

The NTF was established in 2000 as a dedicated fund to support the training of those seeking to take up employment, those in employment seeking to upskill, and to facilitate lifelong learning.  Employers pay 1% of payroll spend into the NTF via their PRSI deduction, which is called the training levy.

“The National Training Fund was never intended to be subsumed into general Government spending on the university sector and it would be a serious miscalculation to use the fund for that purpose. SMEs are not paying a levy to provide funding support for universities,” said Neil McDonnell, Chief Executive of ISME.

“Employers will lose faith in a levy imposed on them being channelled to a purpose other than intended by law. Amending the Act to allow such diversion will not change this,” he said.

Employers provide approximately one billion euro per annum to the NTF via the training levy. In return, the employers can avail of co-funded training opportunities from Skillnet Ireland, which in the current year will disperse about €60m in co-funding, a mere 6% of the total training levy. Because it is co-funded by employers, Skillnet training is efficient, effective, and targeted where there is most need.

If NTF monies are diverted into capital spending in the tertiary education sector in Budget 2026, the fund will be depleted very quickly in a sector that has traditionally shown very poor financial discipline.

“ISME is not saying we shouldn’t spend more on third-level education. What we are saying is that any increase in university education should not be drawn from a fund dedicated by law to adult and life-long learning,” said Neil McDonnell.

Irish school leavers and college graduates already score well in international rankings against peer countries. However, the educational performance of Irish adults against those in peer countries is below OECD averages. This is not consistent with a country determined to increase its productivity and export potential.

Findings from the OECD Survey of Adults Skills 2023 showed that Ireland lagged behind international standards in some basic areas:

• Level 4 literacy  – 9% of Irish adults against an OECD average of 12%
• Level 4 numeracy – 10% of Irish adults against to 14% OCED average
• Level 4 Adaptive Problem Solving  – 3% of Irish adults against an OECD average of 5%

ISME is calling for a doubling (at a minimum) of the Skillnet funding in budget 2026. It is farcical that the NTF is allowed run a €1.5bn surplus while employers are restricted in co-funded training. We urgently need to implement the Action Plan for Apprenticeships, and improve innovation, entrepreneurial, financial, digital and export skills in our indigenous enterprise base.

“SME employers have a right to be consulted on the use of NTF funds. The training levy is their money. Such consultation has yet to take place,” said Neil McDonnell

(Ends)

Issued on behalf of ISME by Heneghan

Findings from ISME’s Business Crime Survey 2025 reveal that 64% of Irish SMEs were unaffected by crime in the past 12 months, a result that challenges recent public debate about rising crime rates.

Of the 36% of businesses which did experience crime, 68% were targeted more than once. The most common offences were anti-social behaviour (21%), vandalism (19%), burglary (17%) and phishing attacks (15%).

For businesses affected, the costs are considerable: 28% reported increased security costs, 22% faced higher insurance premiums, and 17% had to make expensive physical alterations to premises.

Despite 73% of victims rating Garda performance as adequate or very effective, 78% of all respondents believe the judicial system fails to deter repeat offenders. 85% of SMEs want more Gardaí, 76% support tougher sentencing, and 73% favour increased CCTV coverage and data-sharing.

Neil McDonnell, Chief Executive of ISME, said: “It is encouraging that most SMEs avoided crime over the past year, but the reality for repeat victims is stark. These businesses are paying more for security, more for insurance, and losing valuable time and productivity. SMEs are sending a clear message, they want more Gardaí on the streets, tougher sentencing, and smarter use of technology like CCTV. If repeat offenders are allowed to operate without consequence, the burden will keep falling on the businesses that can least afford it.”Three-quarters of businesses are aware of the Garda National Cybercrime Bureau, yet only 9% have engaged with it. Meanwhile, 34% of SMEs spend over €5,000 annually on crime prevention, with CCTV and alarms the most widely used measures.

ISME has welcomed the Summer economic Statement from Government, but said a far greater focus on indigenous enterprise will be required to address the imbalances in the Irish economy between multinational businesses and indigenous enterprise. ISME warned that Ireland will suffer the worsening effects of ‘Dutch Disease’ unless Budget 2026 focuses on scaling indigenous enterprises and helping them export. The association claims that Tuesday’s Summer Economic Statement does not include any new strategic support for the SME sector, despite mounting economic risks associated with overexposure to multinational tax receipts.

Dutch Disease is where labour, capital and tax reliefs flow to a successful part of the economy, to the detriment of other sectors. This can discourage investment and innovation in other areas, hindering economic diversification and long-term growth. Dutch Disease can create economic instability as the country’s fortunes become tied to the performance of a single sector and volatile global markets.

Neil McDonnell, Chief Executive of ISME, said: “We are living in a country where small businesses create two-thirds of jobs but get a fraction of policy attention. Ireland’s tax take is flattered by money from multinationals, but its economic soul is in its towns and villages. Budget 2026 must recognise that. If we keep chasing big headlines from big tech while ignoring the employers who built Ireland, we’ll end up with a hollowed-out economy.”

“We are optimistic for Ireland’s future, but that future will be built around entrepreneurial, innovative Irish businesses.”

ISME is calling for Budget 2026 to:

• Extend real SME representation to the Labour Employer Economic Forum (LEEF)
• Reform VAT rules (Section 56) to help more SMEs to exporter
• Broaden R&D tax reliefs to reach SMEs
• Fix low uptake of entrepreneurial reliefs like EII and KEEP
• Establish a national security clearance system to allow Irish SMEs to participate in EU defence and satellite programmes

Ireland has one of the widest dual-economy gaps in Europe, with Modified Gross National Income (GNI) accounting for just 57% of GDP, a warning sign typically seen in distorted or over-concentrated economies. Only Luxembourg has a wider gap.

ISME’s full Pre-Budget Submission can be found online – https://isme.ie/wp-content/uploads/2025/05/ISME-Pre-budget-Submission-2026.pdf

ISME, the Irish SME Association, has strongly criticised Government proposals to raise personal injury awards by 17%, warning that such a move would take money directly from small businesses and into the pockets of lawyers. ISME say the increase would lead to increases in insurance premiums for both businesses and consumers, further rewarding a legal industry already profiting from vexatious litigation and huge personal injury payouts.

The proposal, due to be brought to Cabinet by Minister for Justice Jim O’Callaghan on 8th July, is based on a recommendation from the Judicial Council. This is despite Ireland already having much higher personal injury payouts than other comparable countries. Ireland also has fourteen times more personal injury cases than England and Wales, with a population twelve times smaller.

ISME says the Minister for Justice’s support for the increase is a capitulation to vested legal interests and undermines years of work to bring down insurance costs for SMEs and consumers.

Neil McDonnell, Chief Executive of ISME, said: “This proposed increase is indefensible. It rewards a highly profitable legal industry and punishes honest employers, retailers and community organisations. Insurance costs have not fallen following previous reforms, and now the Government wants to undo the little progress that has been made. SMEs and voluntary groups will bear the cost while legal firms walk away with bigger fees.”

“Minister O’Callaghan will have to make a decision based on social good, not on the desire to maintain legal earning power. He will also need to remove the judiciary from the awards setting function, and delegate this to an independent expert body such as the Personal Injuries Resolution Board or the Workplace Relations Commission. Not alone is there no justification for an increase in personal injuries awards, but the final report of the Personal Injuries Commission suggests that awards should be reduced by at least a further 30 per cent. “

ISME is calling on TDs and party leaders to oppose Minister O’Callaghan accepting the Judicial Council’s recommendation and defend society and small businesses from further cost increases.

ISME has previously warned that the Defamation Amendment Bill, now being prepared for Cabinet, has been stripped of its most meaningful reforms and will fail to protect small businesses from baseless and costly litigation. It has urged TDs to stand firm against pressure from legal lobbyists and restore key protections to the bill, including a statutory defence against “transient retail defamation”.

The Defamation Amendment Bill as currently drafted is utterly inadequate, and also requires at a minimum the insertion of a serious harm test, a cap on damages, and penalisation of SLAPP lawsuits.

The association has also called on the Legal Services Regulatory Authority to investigate solicitors who repeatedly pursue abusive or vexatious claims, as their UK counterparts already do through the Solicitors Regulation Authority.

(Ends)

Issued on behalf of ISME by Heneghan

For Information:

Neil McDonnell / ISME – (087) 299 5658 (available for comment)

Nigel Heneghan – (086) 258 7206 – nigel@heneghan.ie

Rory Sweeney – (086) 897 6442 – rory@heneghan.ie

The submission warns that rising business costs, red tape, overreliance on multinationals, and policy blind spots on small business are placing the Irish economy on an unsustainable trajectory. ISME is calling on Government to implement targeted, affordable reforms to support indigenous business and maintain economic competitiveness.

The five-chapter submission addresses the following areas:

1. Business Costs – SMEs are battling surging costs in energy, insurance, wages and compliance. ISME is calling for a reset on the national minimum wage calculation, legal reforms to deter vexatious lawsuits, and the reintroduction of the insurance ‘Blue Book’ to improve market transparency.
2. Indigenous Enterprise Policy – Government policy continues to favour foreign direct investment. ISME recommends targeted tax reliefs for Irish entrepreneurs, a reduction in VAT thresholds for exporters, and formal SME representation on the Labour Employer Economic Forum (LEEF).
3. Skills and Training – With in-work learning falling behind, ISME is calling for National Training Fund resources to be redirected towards lifelong learning and upskilling. It also proposes a new ‘Blue Cert’ in business management aimed at SME owners and managers.
4. Public Finances – ISME cautions against funding permanent current spending with volatile corporation tax receipts. The submission proposes a standing Public Pay Commission, greater use of the Rainy Day Fund, and reforms to the PRSI system to ensure fair contributions.
5. Housing – With housing now acting as a de facto business cost, ISME is calling for tax incentives to unlock rental supply, support for student accommodation, regeneration grants, and accelerated investment in water infrastructure to enable development.

Neil McDonnell, Chief Executive of ISME, said: “SMEs are being squeezed from every side on energy, insurance, regulation, housing and wages. This Budget needs to stop the rot. We need policies that back Irish businesses, not just foreign multinationals. If we don’t address this imbalance in the economy now, we will pay the price in jobs and lost investment. We cannot continue with business as usual. If we want thriving towns, competitive employers and a balanced economy, we need to put Irish SMEs at the centre of policy, not on the sidelines.”

ISME’s full Pre-Budget Submission can be found here.

ISME says the impact of the US tariffs reaches far deeper into the Irish economy than exporters alone. In a February 2025 survey of ISME members, only 11% of SMEs reported exporting directly to the US. However, over a third of Irish SMEs provide goods and services to US multinational companies based in Ireland. Alarmingly, 16% of those firms say their US multinational customers account for more than half of their total turnover.

Neil McDonnell, Chief Executive of ISME, said: “There is rising concern among Irish SMEs over the long-term intentions of US-based clients. A deterioration in these relationships could have serious implications for turnover and employment in the domestic economy. The response to the US tariffs must consider this wider ecosystem of trade, not just direct exports. Irish businesses are very concerned about an aggressive response by the EU which could raise the cost of imports, but they also recognise that the EU must stand up for itself in the face of coercive and economically flawed US trade policy, especially where it targets some of the world’s poorest developing nations.”

ISME warns that Ireland’s options are limited due to EU competency over trade. However, the Association outlines several actions that the Irish Government can take domestically to reduce the economic fallout and strengthen the SME sector:

• Deepen access to the EU internal market, particularly in Germany, France, Italy, and Spain.
• Proactively target Canadian retail markets as US products lose favour.
• Accelerate ratification of the CETA trade deal with Canada.
• Push for swifter progress on the MERCOSUR agreement.
• Hold a referendum on joining the Unified Patent Court to protect SME intellectual property in the EU.
• Drive competitiveness and productivity through regulatory simplification and reform.
• Narrow the gap between Ireland’s GDP-led foreign multinationals and the GNI*-driven SME economy, which comprises 99.8% of Irish businesses.

ISME make recommendations in response to a system out of control

The news from the Central Bank this week that almost 70% of personal injuries claims are going through litigation is shocking but is not surprising to business owners.

Despite the fact that the Personal Injuries Resolution Board (PIRB) makes awards recommendations in line with the Judicial Council recommendations for the same amount of damages and in one third of the time it takes cases to go through the courts, we continue to see large volumes of litigation through the courts.

This litigation is evidently not in the financial interest of Plaintiffs.

The Central Bank figures come a week after ISME revealed that the number of personal injuries actions going through the Irish courts exceeds the number going through the courts of England and Wales combined, despite the fact that the Irish population is 12 times smaller. The number of defamation cases in Ireland also exceeds that in England and Wales.

Ireland demonstrably has a systemic problem with the amount of civil litigation going through its courts system. It makes no sense that a common-law jurisdiction of Ireland’s size is generating more civil litigation than that of England and Wales.

It is also clear that, with personal injuries awards in Ireland already far higher than those in the next most generous jurisdiction in Europe (the UK), there is no justification whatsoever for Dáil Éireann to accede to the recommendation of the Personal Injuries Guidelines Committee to increase awards, and indeed a good case exists to reduce those awards levels further.

Given that the data show that Ireland’s civil litigation system is effectively running out of control, ISME is suggesting a number of quick fixes in response to the issue:

• The Department of Justice must encode more of the rules governing the functioning of our courts (such as “costs follow the event”) into primary legislation.
• The DOJ must also immediately action the Minority Report of the Review of the Administration of Civil Justice, which was endorsed by Mr Justice Peter Kelly, Chair of the Review. This will fix fees in the Circuit and High Courts. The DOJ must also produce an action plan to deliver on the other recommendations in this enormous report. Further delay is unacceptable.
• The defamation reform bill currently before the Dáil requires substantial amendment before it is fit for purpose and will deliver on commitments under the European Convention on Human Rights, and the EU Anti-SLAPP directive.
• All members of the Board of the Courts Service and of the Superior Courts Rules Committee must complete comprehensive declarations of interest and must absent themselves from all discussions and decisions which impact those declared interests.
• The Legal Services Regulatory Authority must commence investigation into lawyers who are taking their clients down the civil litigation route in the majority of personal injuries cases, despite it not being in their clients’ financial interest to do so. The LSRA must also, like their counterparts in the Solicitors Regulation Authority in the UK, initiate investigation into lawyers practicing abusive and vexatious litigation.

The Irish Courts Service data is available here: https://www.courts.ie/acc/alfresco/2b552955-e0f9-41a2-80e7-c526d24651e2/Courts%20Service%20Annual%20Report%202023.pdf/pdf/1

The Royal Courts of Justice data for England and Wales is available here: https://assets.publishing.service.gov.uk/media/666094e7d470e3279dd3367d/Royal_Courts_of_Justice_Annual_Tables-_2023.ods

(Ends)

Issued on behalf of ISME by Heneghan

ISME (Irish Small and Medium Enterprises Association) has called on the Government to strengthen the Defamation Amendment Bill to provide meaningful protections for small businesses and citizens against costly and often unjustified defamation claims.

ISME say current defamation laws are making life extremely challenging for SMEs, particularly in the retail and hospitality sectors, where businesses face an increasing volume of defamation threats and cases. Irish courts handle more defamation cases than the entire UK, despite Ireland having a population twelve times smaller.

The proposed Defamation Amendment Bill is weak, and does not go far enough in ensuring SMEs are not unfairly targeted by costly legal actions.

The key concerns raised by ISME about the Defamation Amendment Bill in its current form include:

• Retailers and SMEs cannot afford to fight defamation cases.
• Even when they win, they rarely recover their legal costs.
• Most cases settle for between €5,000-€7,000, with legal teams  receiving €20,000-€30,000 in fees.
• The absence of a harm test will allow  abusive, vexatious and trivial claims to continue, and will render the reform bill a “legislative dead letter.”
• ISME recommends capping general damages at €75,000 to bring defamation awards within Circuit Court jurisdiction, although ISME also supports defamation awards in excess of the Supreme Court guidance where harm is demonstrated by plaintiffs.
• Solicitors are using defamation threats to silence complaints made to the Legal Services Regulatory Authority (LSRA), with no action taken to prevent this abuse.
• Victims of sexual assault and rape are being muzzled by perpetrators exploiting the Defamation Act through abusive lawsuits.
• The proposed anti-SLAPP (Strategic Lawsuits Against Public Participation) protections are legally inadequate and fail to penalise vexatious defamation claims as required under the EU SLAPP directive.
• The EU SLAPP directive also requires that a plaintiff suing a person engaged in public participation must bear the burden of proof that such claim is well-founded.
• No provisions exist to protect satire or comedy from defamation claims.

Neil McDonnell, Chief Executive of ISME, said: “Ireland’s defamation laws are not fit for purpose. SMEs are being forced to settle cases they should never have faced in the first place, simply to avoid exorbitant legal costs. This has created a legal climate where defamation is a lucrative business for a small number of lawyers, while businesses, citizens and the media suffer. The Government must introduce stronger protections to prevent abuse of the system and to safeguard SME livelihoods.”

The threat of legal action has led to widespread implementation of a “no challenge” policy in retail, where businesses refrain from protecting stock for fear of defamation claims. One major Irish grocery operator budgets a loss of €70k-€90k annually for each of its convenience stores and €120k-€140k for its supermarkets.

A case study from an ISME member details how a licenced premises successfully defended a defamation claim in the Circuit Court, only to face a High Court  appeal threat unless they agreed to cover the plaintiff’s legal costs. The business ultimately had to pay €3,000 in the settlement and absorb €12,375 in legal fees, with a subsequent rise in their insurance premium. This case underscores how the system incentivises legal threats against SMEs, regardless of merit.

“Rule of law does not mean rule by lawyers. It is time for the Dáil to assert itself in legislative terms, and stop abusive and vexatious defamation litigation, which offends the Irish constitutional right to express opinion, and the European Convention on Human Rights”

(Ends)

Issued on behalf of ISME by Heneghan