What is it?
A class, collective or group action is a claim in which the court awards permission to an individual or individuals to bring similarly placed claims in a single case. Collective actions are an efficient way of dealing where there are a huge number of claimants suing a large corporation under a similar set of facts.
What are the main types of class action claims?
In England and Wales, there are multiple ways of bringing a multi-party claim involving multiple claimants and/or defendants. These include:
- claims by multiple claimants managed together by the court using its case management powers;
- group litigation orders (“GLOs”); and
- claims by representative claimants.
What kind of claims are brought as collective actions?
The collective action mechanism has been most commonly used in the past in:
- competition law claims (for example market fixing or cartel activity claims);
- personal injury claims; and
- pensions disputes.
Notable Recent Cases
The mechanism is being used more frequently within the UK and there have been significant collective action case updates over the summer:
- In August 2021, a lawsuit against Mastercard brought on behalf of 46 million consumers was certified to proceed to trial, after originally being dismissed by the Competition Appeal Tribunal.
- In July 2021, the Court of Appeal allowed a £5bn claim brought by 200,000 Brazilians against mining giant BHP to be reopened.
- British Airways settled for an undisclosed sum against a class action data breach claim by 420,000 people, with BA also the recipient of a £20m fine from the Information Commissioner’s Office.
What is the process for a collective action claim?
There is more than one process for administratively binding cases together to form a collective action which varies depending on the Court and area of law.
Group Litigation Orders
A GLO is made under CPR 19 for claims which "give rise to common or related issues of fact or law". The claims are brought together, usually with more than ten claimants using the same lawyers.
Any claimants wishing to join the litigation must opt into the group register by a date set by the Court. Judgment on a GLO issue then applies to all the claimants on the group register, however non-GLO issues like the amount of compensation is determined in each individual case.
Claims by Representative Claimants
A representative action can be brought where more than one person has the same interest in a claim and the claim is brought by or against one or more defendants. The named claimant can then bring a claim on behalf of both themselves and the class of individuals with the same interest.
A positive of this process is that members of the represented class are not joined in the action and are not automatically subject to the same costs or disclosure obligations. When a judgment or order is given in the matter, this is binding on all represented members but can only be enforced against non-parties with the permission of the Court.
Competition Law Claims
As of 1 October 2015 the amendment to the 1998 Competition Act enabled consumers and businesses to bring claims for losses suffered from breaches of UK competition law on an opt-out basis.
Do I have to opt in?
Most collective actions require parties to opt in and give their express permission for inclusion within an action. The exception to this is in cases brought before the Competition Appeal Tribunal, where the rules have recently changed to an opt-out basis, whereby an entire class of claimants can be included in the claim (other than those who have expressly opted out of the action).
What is a Test Case?
Although not strictly speaking a collective action procedure, the courts can manage large numbers of claims via the use of test cases. The CPR provides the English courts with sufficient powers to manage litigation so that where there are a large number of claims, each raising common factual or legal issues, one or a small number can be selected and determined in court.
The results of a test case can be used for all the other claims to fairly and efficiently settle large groups of cases without having to take each one to court. However, each case can still be settled on its own merits, but the test cases can helpfully resolve the common arguments and set useful precedents.
This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Charlotte Tyrell or write to us using the contact form below.