Class Actions Comparative Guide

• Law Firm: Eversheds Sutherland
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Author: Ms Jennifer Miles and Elizabeth Coleman
• Published date: 02 May 2023

1 Legal framework

1.1 Is there a dedicated class action regime in your jurisdiction? If not, how is collective action typically brought?

There is no dedicated class action regime in England and Wales. Claims in which multiple claimants seek similar relief can be brought in a number of ways, as follows.

Group litigation orders (GLOs): A GLO is an order of the High Court, made where multiple claims give rise to common or related issues of fact or law. These are opt-in claims where a claimant must positively join the action and damages are often assessed on an individual basis following judgment. A GLO is publicised and has a cut-off date by which any claimant wishing to join the action must do so. Any judgment on a GLO issue will bind all other claims listed on the GLO register.

Representative action under Civil Procedure Rule (CPR) 19.6: Representative actions are opt-out claims (ie, all members of the class will automatically be included, unless they opt out) brought in the High Court under CPR 19.6. In order to be classed as a representative action, all of the class must have the same interest in the litigation. This requirement is tightly controlled by the court to ensure that the representative can be relied on to conduct litigation in a way which promotes and protects the interests of all members of the represented class. If the court is satisfied that this test has been met, it then has discretion to order that the claim proceed as a representative action. It must also be possible for an individual to know whether he or she qualifies as being eligible for the class at all stages of the proceedings.

Group litigation managed by the court: The High Court also has case management powers which allow it to manage similar cases together on a bespoke basis. Such claims are made on an opt-in basis, with various claimant law firms bringing claims on behalf of large numbers of claimants. Although these claims may not be suitable for a GLO, they will involve close connections between the issues of fact and law in dispute; and they tend to be managed together by a docketed judge who deals with case and costs management, interim applications and the trial itself. Various test claims will be determined at trial to decide the common issues and other factual and legal matters which will indicate how the remaining claims should be decided.

Collective actions in the Competition Appeals Tribunal (CAT): Finally, UK law also provides for class actions where there have been breaches of competition law. Since 1 October 2015, both opt-in and opt-out collective actions have been permitted before the CAT. In order to proceed, a claimant (known as a proposed class representative) must apply and meet the test for a collective proceedings order (CPO). A CPO may be granted only where the CAT is satisfied that individual claims:

• raise "the same, similar or related issues of fact or law"; and
• are "suitable to be brought in collective proceedings".

1.2 Do any special regimes apply in specific sectors?

There is a specialist regime for dealing with breaches of competition law. The CAT is an independent judicial body within the court systems of England and Wales, Scotland and Northern Ireland which specialises in hearing and deciding cases involving competition or economic regulatory issues (including collective proceedings relating to such matters). The CAT has cross-disciplinary expertise in law, economics, business and accountancy.

1.3 Are the courts in your jurisdiction generally considered sympathetic to class actions?

There has historically been some scepticism in parts of the judiciary as to the benefits of US-style class actions in England and Wales, and a concern that this would enrich litigation funders and lawyers rather than claimants. However, there has been a recognition in recent years that class actions in some form are necessary; otherwise redress for certain types of claims (particularly mass consumer harm claims) would not be practicable given the high legal costs relative to the small level of individual damages claimed.

2 Parties

2.1 Who has standing to bring a class action in your jurisdiction?

Representative actions: A representative action can be brought by one or more of the persons with the 'same interest' in a claim. They must have a common grievance and the relief sought must benefit the whole of the class; however, membership of the class can fluctuate, and it does not have to be possible to compile a complete list of the class members when the litigation begins. This test is tightly controlled by the courts, which have emphasised that a strict interpretation of what constitutes the 'same interest' is necessary to ensure that the representative can be relied on to conduct litigation in a way which promotes and protects the interests of all of the members of the class. This test makes it difficult to bring representative actions, which are rare in practice.

Competition Appeals Tribunal (CAT): In the CAT, collective proceedings can be brought on behalf of a defined class of persons by a class representative under Section 47B of the Competition Act 1998, which must be authorised by the CAT. The class representative need not necessarily be a member of the class and need not have a personal claim against the proposed defendant(s) - the only requirement (as set out in the CAT Rules) is that the CAT consider that it is "just and reasonable" for the applicant to act as the class representative in the proceedings. In doing so, the CAT may consider whether the applicant:

• would fairly and adequately act in the interests of all class members;
• does not have, in relation to the common issues for the class members, a material interest that is in conflict with the interests of class members;
• if there is more than one applicant seeking approval to act as the class representative in respect of the same claims, would be the most suitable;
• would be able to pay the defendant's recoverable costs if ordered to do so; and
• where an interim injunction is sought, would be able to satisfy any undertaking as to damages required by the CAT.

The CAT will continually review the suitability of the class representative throughout the proceedings and may at any time (through its own initiative or following an application) vary or revoke the order authorising the class representative to act in that capacity.

Group litigation orders (GLOs) and group litigation: GLOs and group litigation involve opt-in claims and the standing to bring the claim is the same as for an individual action.

2.2 Can representative bodies bring class actions in your jurisdiction? If so, which bodies may do so and what is the applicable procedure?

Class actions before the CAT can be brought by representative bodies in England and Wales. According to the CAT Guide, such bodies may include:

• consumer organisations;
• trade associations;
• law firms;
• third-party funders; or
• special purpose vehicles.

Before authorising a representative body as the class representative, the CAT will first consider:

• the nature of the body;
• its motivations for being involved; and
• whether there is an actual or potential conflict between that body and the interests of the class members (or, in the case of a special purpose vehicle, the details of its constitution and management and the reason(s) why it was established).

Each application is assessed in light of its individual circumstances and the CAT will also consider the ability of the body to manage the proceedings and instruct its lawyers.

2.3 Can parties outside the jurisdiction be members of a class action? What requirements and restrictions apply in this regard?

Representative actions: Representative actions can be brought on behalf of claimants residing outside of the jurisdiction subject to usual conflict of laws rules (although the more numerous and geographically widely spread the class is, the more clearly the same interest test should be satisfied). Unless the court directs otherwise, any judgment or order in a claim in which a party is acting as a representative is binding on all persons represented.

CAT: Parties from outside the United Kingdom may be parties to collective proceedings in the CAT, provided that they 'opt in' to the proceedings. This is the case even in relation to 'opt-out' proceedings where, under CAT Rule 82(1)(b), a party which is not domiciled in the United Kingdom at the domicile date must first opt in to such proceedings in order to form part of the class.

GLOs and group litigation: GLOs and group litigation allow the court to consider related claims together for ease of case management. Before a claim can be entered on the GLO group register or joined to a proceeding, it must be issued as an individual claim. Claimants outside of the jurisdiction can bring a claim in England and Wales subject to usual conflict of laws rules.

2.4 Which parties may be the target of a class action? Can parties outside the jurisdiction be the target of a class action? What requirements and restrictions apply in this regard?

Any legal person or entity can be a defendant to proceedings in England and Wales, in either the High Court or the CAT.

High Court proceedings: As regards High Court proceedings (including representative actions, GLOs and group litigation), a claim can be served on a defendant domiciled outside of the jurisdiction without the court's permission if there is a contractual clause which states that the English courts shall have jurisdiction to determine any claim (Civil Procedure Rule (CPR) 6.33). A claim may still be served on a defendant outside of the jurisdiction with the court's permission (CPR 6.36), and an application in accordance with Rule 6.37 of the CPR is required. In both cases, a defendant will then have the right to challenge the court's jurisdiction to determine the claim.

The seminal case of Lloyd v Google [2021] UKSC 50 saw the Supreme Court unanimously deny a claimant permission to...