Most commonly in the UK, large numbers of litigants whose claims give rise to common or related issues of fact or law will have their cases dealt with together under a Group Litigation Order, which is a court-ordered procedure for efficient case management of claims rather than a true collective action.
However, on 1 October 2015, a collective redress procedure was introduced for claimants bringing private actions for damages for breaches of competition law. Proposed collective actions in this sphere must be approved by the Competition Appeals Tribunal, as must the proposed class representative, and may be opt in or opt out. A small number of cases have been commenced under the new procedure. However, none has so far been completed. A decision of the UK Supreme Court in the Mastercard v Merricks case, delivered in December 2020, has significantly lowered the initial certification hurdle that prospective claimants must overcome, which is likely to encourage more actions to be commenced under this regime.
What forms of collective actions are permitted in this jurisdiction and under what authority?
Class actions as understood in the US do not exist in the UK. However, there are procedures by which claimants with similar claims may group together to bring collective actions against the same defendant(s). Under the majority of these procedures, the individual claimants have to be identified and have to opt into the proceedings.
Under the Civil Procedure Rules (“CPR”), there are two main methods by which claimants may bring a collective action:
- Group Litigation Order (“GLO”) under CPR Part 19 section III
This is an order made by the court to provide for the case management of claims which give rise to common or related issues of fact or law. A group register is established onto which claims issued by individual claimants are entered. Applications for entry onto the register may be refused by the court if the court is not satisfied that the case can conveniently be managed as part of the GLO. Individual claimants under a GLO may decide to appoint one solicitor or firm to conduct their claims on their behalf but this is not obligatory.
- Representative actions under CPR Part 19 section II (“Representative actions”)
Under CPR rule 19.6, the court may direct that where more than one person has the same interest in a claim, that claim may be begun or continued by one or more of those persons as representatives of any other person who has that interest. Any order of the court is binding on all persons represented in the claim. Where a person is represented in the claim but not a party to it, the order may only be enforced against him with the permission of the court.
The CPR also provide for the representation of interested persons who cannot be ascertained, limited to claims concerning the estate of a deceased person, property subject to trust or the meaning of documents, including a statute. Representative actions are comparatively rare, with GLOs commonly the more appropriate means of case management.
- Collective actions and collective settlements in private actions for breaches of competition law (“Opt out private actions for breaches of competition law”)
The Enterprise Act 2002 (inserting sections 47A and 47B into the Competition Act) introduced the ability for “specified bodies” to bring representative actions on behalf of two or more individual consumers in the Competition Appeals Tribunal where those individuals had suffered loss or damage arising from infringements of Articles 81 or 82 EC Treaty and/ or the Chapter(s) I and/or II prohibition of the Competition Act, affecting consumer goods or services. Only one action was ever commenced under this provision; in 2007 the Consumers’ Association brought an action on behalf of consumers who had purchased replica football shirts, the price of which had been found by the Office of Fair Trading to be the subject of price-fixing agreements between retailers.
These provisions were replaced on 1 October 2015, when measures to implement collective actions in the context of private actions for breaches of competition law were included in the Consumer Rights Act 2015. Collective proceedings may now be brought in the Competition Appeals Tribunal (“CAT”) and can be either on an opt in or opt out basis, stand-alone or follow-on actions and can cover actions on behalf of both individuals and businesses. In each case the action may be commenced by a class representative but it may only be continued if the CAT makes a collective proceedings order (“CPO”) confirming: that the claims are eligible for inclusion in collective proceedings; authorising the proposed representative; determining the description of the class of persons whose claims are eligible for inclusion; and whether the proceedings will be opt in or opt out.
The procedure is governed by extensive rules including: provisions relating to the content of applications by proposed class representatives (or settlement representatives); the factors that the CAT will take into account in making a CPO or when settlement of the action, for which the court’s approval is needed, is being proposed; how would-be claimants can opt in or opt out; judgments and orders in such proceedings; and the allocation of costs and fees. The regime is principally aimed at consumers and small and medium sized enterprises, and claims brought by larger businesses may not generally be suitable.
Only six such actions have been commenced so far but none has so far progressed to trial. The first, Dorothy Gibson v Pride Mobility Products Limited, was not deemed “suitable” to proceed by the CAT. The remaining actions were all stayed pending the decision of the UK Supreme Court in Mastercard v Merricks, which was handed down on 11 December 2020. This case is focused on the allegedly increased retail prices that consumers paid to cover charges which the European Court found Mastercard should not have been levying. The Supreme Court decision concerned the certification of the proposed class and has provided much needed clarification on how the CAT should assess the relevant criteria.
Who may bring them?
Usually in English law, only a party with an interest in the action itself may bring a claim for damages.
- GLOs – each individual claimant must commence an action in its own right. The GLO register, in which names of claimants are recorded, is simply a tool for case management.
- Representative actions - these may be brought by or against a party as representative of one or more persons that have the “same interest" in a claim. The "same interest" must be a common interest, based upon a common grievance; common questions of fact or law, such as the existence of a duty and a breach of that duty, are not sufficient. It is not necessary that the claims or causes of action of all represented parties should be identical, provided that they are in effect the same for all practical purposes. This requirement has led to representative actions being difficult to bring.
The nature of a “common interest” was considered recently by the High Court in the case of Jalla and others v Shell . In this case, a representative action was bought on behalf of many thousands of individuals affected by an oil spill off the coast of Nigeria. The judge held that although the claims raised common issues of fact, the proceedings were to be regarded as a set of individual claims; for example, the represented parties had suffered differing amounts of damage at different times and it could not be said they all had the same interest in the claim.
In the case of Lloyd v Google , the Court of Appeal allowed the representative claimant, Mr Lloyd, to proceed with his claim for breach of privacy on behalf of more than 4 million affected individuals in England and Wales. The claim in this case is for loss of control of the claimants’ browsing information and not for damage or distress, which might vary greatly from claimant to claimant. The Court was therefore able to find that the claimants all have the “same interest” in the claim. Google have appealed the finding to the Supreme Court and it is expected the case will be heard in April 2021.
- Opt out private actions for breaches of competition law – these may only be brought by persons with a genuine interest, such as representative bodies (i.e. trade or consumer associations) or potential claimants. The class representative must be certified by the CAT before it can commence proceedings, which will need to be satisfied that it is just and reasonable for the proposed person, who need not be a class member, to act as a representative in those proceedings.
In addition, in order to bring a collective action under this regime, it is necessary that the CAT is satisfied that the claims: (i) are brought on behalf of an identifiable class; (ii) raise common issues of fact or law; and (iii) are suitable to be brought in collective proceedings (taking into consideration, for example, the costs and benefits of the claims proceeding as a collective action, the fair and efficient resolution of the common issues, the size and nature of the class and whether the claims are suitable for an aggregate award of damages). The recent Supreme Court decision in Mastercard v Merricks has provided much needed clarification on how the CAT should assess these critieria.
Opt in or opt out?
Most collective actions currently available in the UK procedure are opt in.
- GLO – each individual claimant has to start his own proceedings. A party joining the group register will be bound by any judgment or order made in it unless the court rules otherwise. Claimants may also apply to be removed from the register, in which case they will not be bound by the judgment or order.
- Representative actions - these are effectively ‘opt-out’. The representative claimants can bring proceedings on behalf of all those who have “the same interest”. These additional claimants are not parties to the proceedings and do not even need to be identified. However, they will be bound by any court judgment unless they specifically opt out.
- Opt out private actions for breaches of competition law - collective proceedings may be opt in or opt out; the CAT will rule on that aspect when certifying the proceedings as suitable to be conducted as collective proceedings. However, any class member who is not domiciled in the UK at the specified time must specifically opt in to the claim.
Judge or jury?
What relief may be obtained?
- GLO - any remedy usually available in civil proceedings may be sought by the claimants. It is for the court to decide whether the various remedies sought in the individual claims may be appropriately litigated under a GLO.
- Representative actions - there is no formal restriction on the types of remedy that may be claimed by way of a representative action. However, the procedure was considered inappropriate in a damages action where different losses had been suffered by members of the represented class (Jalla v Shell ). The Court of Appeal in the case of Lloyd v Google  allowed a representative action to proceed on behalf of more than 4 million individuals for alleged breaches of privacy in connection with Google’s so-called “safari workaround”, resulting in loss of control over their personal data. However, this decision has been appealed to the Supreme Court.
- Opt out private actions for breaches of competition law - the regime is compensatory only; exemplary damages are unavailable.
How are such actions funded?
Parties to UK litigation will usually fund their own actions initially. However, it is usual for the successful party to recover all or part of its costs from the unsuccessful party at the end of proceedings under the process of assessment of costs. Conditional fee agreements between a party and its lawyers, (also known as a “no win no fee” agreements) and damages-based agreements (akin to a contingency fee basis) are permissible subject to certain regulations and restrictions. These types of funding arrangements may be backed by litigation insurance, most often arranged “after the event”.
Third party funding is becoming more important as a method of funding UK cases. Such funding may be particularly appropriate in collective actions and realistically many would not be viable without it. Although not applicable to every case, recovery of fees by third party funders may be limited by the so-called Arkin cap, which limits a potential funder’s liability for adverse costs to the amount of the funding provided.
- GLO - the costs incurred by parties to a GLO are assessed by the court and may be apportioned between the group litigants or allocated to particular parties.
- Opt out private actions for breaches of competition law - the UK government has been concerned to prevent the development of a “litigation culture” and considers there could be a risk of abuse if claimant law firms and litigation funders are permitted to bring collective actions themselves. However, third party funding of such actions is increasingly common. The normal “loser pays” costs rules above have been retained for Opt out private actions for breaches of competition law, so that unsuccessful claimants face the risk of liability for a successful defendant’s legal costs. Third parties who fund collective actions which are unsuccessful may be liable for costs up to the extent of the funding they provide and, in some cases, beyond that amount.
Damages-based agreements are prohibited in this type of case due to concerns that they could incentivise inappropriate use of the new regime by claimant law firms. Claimants remain able to use conditional fee agreements and litigation insurance to fund collective actions.
Is pre-trial disclosure available?
Orders for pre-action disclosure or preservation of evidence are available to claimants bringing actions managed as part of a GLO under the usual procedural rules.
Under the CAT rules, the tribunal may give orders for the disclosure of documents and preservation of evidence.
Likely future scope and development?
In 2010 the Civil Justice Council, which has been the most active body in pushing the collective redress debate in the UK, published a set of draft generic court rules that could be used for any different model of collective proceedings that might be permitted by primary legislation. The draft rules set out criteria for an action to be certified as suitable for collective proceedings and for the approval of a class representative. They also contained details of the procedural rules that could apply to the conduct of collective proceedings. However, the government of the day said it believed that such an action would be better considered on a sector by sector basis and introduced only where there is evidence of need, following an assessment of economic and other impacts and once alternative approaches had been considered including, in particular, regulatory options. The result was the introduction of Representative actions, discussed above. The expansion in the use of representative actions may depend on the decision of the Supreme Court later this year, when it hears the appeal in Lloyd v Google.
Since then, collective redress procedures have been introduced for opt out private actions for breaches of competition law. Given the recent ruling in the Supreme Court case of Mastercard v Merricks, it is likely that more cases will be commenced under this regime in the future. No proposals have been made to extend specific collective redress processes for any other type of claim.
To date, some 109 GLOs have been ordered, in cases as diverse as tax litigation, medical negligence and child abuse. Although the procedure has received some criticism, it continues to provide the main procedure for determining a large number of disputes together. In May 2018 the High Court in London approved a GLO in the largest consumer group action to date. Claims being brought by over 91,000 drivers against the car manufacturer Volkswagen in relation to allegations that software fitted to their vehicles cheated EU emissions tests will now be conducted pursuant to a GLO. It is likely that GLOs will continue to provide the main process by which large numbers of affected claimants conduct court proceedings in the UK for the foreseeable future.