Group Litigation: What Businesses Need To Know

• Published date: 24 September 2023
• Subject Matter: Antitrust/Competition Law, Litigation, Mediation & Arbitration, Privacy, Antitrust, EU Competition , Data Protection, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Walker Morris
• Author: Nick McQueen

The Topline

“In recent years we've seen a marked trend towards group litigation in areas as diverse as data protection/privacy, competition, environmental/sustainability, product liability, financial services, technology; the list goes on, and it's growing all the time. A recent push in secret commission claims is just one example.” – Nick McQueen

In this briefing, Walker Morris Commercial Dispute Resolution Partner Nick McQueen explains what's required to bring group litigation in England and Wales in light of recent case law; and offers practical advice for businesses faced with such claims.

Group litigation: The options

We often hear the words 'class action' when we think of group litigation/mass claims, typically brought by consumers as they become increasingly aware of their rights and the ability to join together to launch court proceedings. They're often fuelled by the availability of third-party funding and an active contingent of claimant law firms and, in some cases, consumer 'champions', willing to take on this type of litigation.

We don't actually have a US-style 'class action' system here in England and Wales. Instead, there are a number of procedural mechanisms in our court rules (the Civil Procedure Rules or CPR) and in consumer and competition law which allow group litigation to be brought, providing certain conditions are met. The main ones are:

• Representative claims: This is where one or more claimants represent other claimants with the "same interest".
• Group Litigation Orders (or GLOs): A GLO is an order under which the court manages multiple claims that have "common or related issues of fact or law".
• Multiple joint claims: This is where multiple claimants use a single claim form and their claims can be "conveniently disposed of in the same proceedings".
• Collective proceedings before the Competition Appeal Tribunal (the CAT): This is where proceedings are brought for alleged breaches of competition law on behalf of a defined class of claimants by a representative (who may but doesn't need to be a class member).

There are also provisions for company shareholders to bring derivative claims on the company's behalf. These are outside the scope of this briefing, but please contact Nick if you need advice or assistance in this area.

As a general point, outside of the specific procedures listed above, the court has a variety of case management powers that can be used to co-ordinate joint claims. This inherent flexibility is one advantage, for both claimants and defendants, of litigating in the English courts.

Turning then to consider each of the main group litigation options in more detail...

Representative claims

Representative claims under CPR 19.8 attract a lot of interest because they're an 'opt-out' mechanism, meaning that one claimant can bring the claim on behalf of an entire class of claimants, without requiring their consent or even awareness. A resulting judgment or order will bind them all unless they opt out (or the court orders otherwise). This is significant, because it avoids the administrative difficulties of having to seek individuals' positive opt-in, opening up the litigation to a potentially huge class of claimants. Even where the amount of compensation awarded might be low, the financial exposure for defendants could run into £billions.

Claimants first need to get past the required "same interest" test. They must have a common interest and common grievance, and...