GROUP LITIGATION: An Introduction

Group actions are fundamentally about procedure. As such, they are capable of being deployed across a wide range of practice areas. Originally, techniques for the management of large numbers of claims were developed in the context of transport disasters and medical product liability. From the mid-1990s onwards, group litigation techniques were brought to bear more widely, particularly in litigation arising out of financial and environmental issues. More recently, data protection has been a major growth area for group actions.

The last few years have seen the usual steady stream of new “Group Litigation Orders” (GLO) being made, including the Mercedes-Benz NOx Emissions group litigation (concerning diesel emissions and car software) in March 2023, the Arkwright In Vessel Composting Site group litigation (concerning alleged odour nuisance) in August 2022, and the Bille and Ogale group litigation (concerning oil spills from pipelines in Nigeria) in May 2022.

Claimant and defendant lawyers have also continued to adopt group structures falling short of a formal GLO. As an example of recent activity, in July 2022 the Court of Appeal in Municipio de Mariana & Ors v BHP Group plc and BHP Group Ltd EWCA Civ 951 confirmed the jurisdiction of the English courts to hear the claims of some 200k claimants in Brazil in respect of the collapse of the Fundão Dam. Emissions litigation in particular continues to rumble on, with claims having been issued against almost every major car manufacturer, though some claims are at a more advanced stage than others. There is also every sign that the pause occasioned by the change in the jurisdiction rules post-Brexit in multi-national mass tort litigation is dissipating, with a raft of ESG/climate change/parent company/supply chain claims coming before the court in the next few years.

In this jurisdiction, multiparty litigation is usually “opt-in”, that is to say a claimant must individually take the decision to opt into the litigation at an early stage. In 2015, the gates were opened for “opt-out” litigation in the Competition Appeals Tribunal (CAT), allowing a claim to be brought on behalf of an entire class of potential claimants without the need for them to choose to participate. However, this much anticipated step towards the US-style class action began with a whimper, not a bang, with not a single action being certified between 2015 and 2020. Finally, over the last few years such actions have begun to gain momentum, with a sizeable tranche receiving approval. For example, in May 2022 the CAT approved an opt-out Collective Proceedings Order brought by the consumer association Which? against mobile chipmaker Qualcomm, contending on behalf of UK consumers that they paid higher prices for smartphones because Qualcomm abused its dominant position in markets for smartphone components.

Another weapon in the multi-party litigation armoury is that of the “representative action”. Under CPR 19.8, a representative claimant can bring a claim on behalf of the represented class if they all have the “same interest” in the claim. The challenge with using CPR 19.8 in a claim for damages is that it is usually necessary to assess each claimant’s individual losses which will differ, and therefore claimants will not have the required “same interest”. In 2021 the claimants in Lloyd v Google ingeniously attempted to avoid this difficulty by limiting the claim to uniform “lowest common denominator” damages for loss of control of their data, but this was shot down by the Supreme Court (UKSC 50). This year we saw the first high-profile judgment on the “same interest” test since then, in Commission Recovery v Marks & Clerk LLP EWHC 398 (Comm). In that decision, the Court seemed to adopt a wider view of the “same interest” test, permitting a representative claim to proceed on the basis of a claim that conceptually overlapped with, but was not identical to, others. This may start to pave the way to more representative actions, to the advantage of claimants.

Whether opt-in or opt-out, funding is essential to bringing any major group action. The health of group litigation as a sector can be seen by reports that the British litigation finance industry has almost doubled the size of its UK assets over the past three years, with as much as GBP2.2 billion in play. Against that background, those who wish to anticipate trends in this sector are well advised to have an eye on group actions costs decisions. The most notable of these is the July 2023 Supreme Court costs decision in PACCAR, which found that agreements with third-party litigation funders are damages-based agreements (DBAs). This is leading to a scramble by funders and law firms to restructure their funding agreements. Since DBAs are not permitted in CAT opt-out collective actions, the funding industry is calling urgently for legislative changes to accommodate the ruling.

Another recent highlight is a pair of interesting CAT decisions, Kent v Apple Inc [2021] CAT 37 and Coll v Alphabet Inc [2022] CAT 6. The CAT ruled that (other than where privilege applies) it is at its discretion to determine whether a document should be treated as confidential, balancing issues of relevance with interests of confidentiality. In both cases the CAT refused to order disclosure of the After The Event (ATE) premiums, as well as, in Kent, the solicitor’s excess provision and, in Coll, the percentage level of success fees payable under the conditional fee agreements. This decision is likely to increase the appetite for funders and insurers for such claims.

Also of note on costs is the decision in Weaver and others v British Airways plc [2021] EWHC 217 (QB), a CCMC in the British Airways Data Event group litigation, in which Saini J held that advertising costs to publicise the claims in the media fell outside the budget. The GLO in question made provision for the lead solicitors to take reasonable steps to publicise the GLO in accordance with CPR 19.11(3)(c) in the form of an attached advertisement, and the judge accepted that the costs of this would, in principle, be recoverable. However, he found that the costs in the claimants’ budget were not costs being incurred under that provision, but rather were the costs of the claimants’ solicitors “getting the business in”, and so fell outside the budget.

As well as being an important principled decision on costs, Weaver (now settled on confidential terms) also functions as a useful illustration of the practical issues in this sector. One can extract from the judgment that despite GBP443,000 spent on advertising, the claimants had only been able to recruit 5% of those eligible to bring a claim. That illustrates starkly quite how difficult it can be to build momentum for a traditional “opt-in” GLO, and quite how transformational the rise of “opt-out” multi-party litigation in this jurisdiction has the potential to be for claimants.