Source: https://iclg.com/practice-areas/class-and-group-actions-laws-and-regulations/england-and-wales
Timestamp: 2019-01-22 15:18:56
Document Index: 655288224

Matched Legal Cases: ['EWCA ', 'art 36', 'art 36', 'art 36', 'EWCA ', 'EWCA ', 'EWCA ', 'EWCA ', 'UKHL ']

Class and Group Actions 2019 | England & Wales | ICLG
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Class and Group Actions 2019 | England & Wales
■ a group register on which details of the claims to be managed under the GLO must be entered;
■ the GLO issues, which will identify the claims to be managed under the GLO; and
■ the ‘management court’ responsible for managing the claims.
Specific rules also apply to claims for breach of competition law. Under the Competition Act 1998, the Competition Appeals Tribunal (“CAT”) may approve collective proceedings or a collective settlement, and these provisions are outlined in more detail in Section 2 below.
There is no general ‘opt-out’ class action procedure in England and Wales. However, under the Competition Act 1998, a representative party may bring collective proceedings in respect of competition law claims, with claims managed on either an ‘opt-in’ or an ‘opt-out’ basis (see the answer to question 2.1 below).
GLOs remain uncommon. The Ministry of Justice website indicates that, since 2000, a total of 105 GLOs have been managed by the courts, but only 17 GLOs have been commenced since 2014. The cases cover a range of different areas of law and include claims relating to personal injuries, defective products and medicines, cases of industrial disease, claims arising from accidents or disasters, cases of physical or mental abuse, shareholder claims, claims relating to the provision of financial advice, employment matters, tax matters and environmental claims.
Legislation permitting collective proceedings in the competition field was introduced in 2015. The first proceedings were brought against Pride mobility scooters in 2016. Since then, only two further applications have been made (in June/July 2018) for collective proceedings orders in the CAT (see further question 2.1 below). It remains to be seen whether these applications will be successful and whether this procedure will prove popular in future.
However, under the Competition Act 1998, as amended, collective proceedings combining two or more claims may be brought before the CAT by a representative person on behalf of any person (including both individual consumers and companies) who has suffered loss or damage as a result of specified infringements of competition law, including EU Competition Law. The representative person does not need to be a member of the class of persons eligible to bring the claim (class member), but can be a third party organisation, such as a consumer organisation or interest group, if the Tribunal considers it just and reasonable for them to act as the representative person.
In Dorothy Gibson v Pride Mobility Products Limited [2017] CAT 9, the CAT considered for the first time what approach should be adopted in deciding whether to make a collective proceedings order. The case was a ‘follow on’ damages action brought by a group of consumers who had purchased mobility vehicles from Pride between 2010 and 2012, at a time when the UK competition regulator had determined that Pride had entered into concerted agreements with eight of its dealers precluding them from advertising the scooters at below the recommended retail price. The CAT indicated that the certification process under the Competition Act was intended to be a short procedure held within months of the claim being issued, with either no, or very limited, disclosure of documents. Although expert evidence would be required to determine whether common issues could be established in relation to matters of loss and damage, the CAT stated that it would not decide between the methodologies of the parties’ experts, but would merely need to establish that the expert methodology was sufficiently credible to establish some basis for commonality. The CAT found on the facts that the Claimants’ methodology did not meet that test, as it sought to seek damages on behalf of a much larger group of consumers who had not purchased their mobility vehicles from the relevant dealers. However, the CAT indicated, in principle, that if that issue could be addressed, the claim justified certification on an ‘opt-out’ basis because of the large size of the class, the fact that the class members were individual consumers and the relatively low level of estimated damages claimed by each class member. The case was subsequently withdrawn by the Claimants. A similar decision was reached by the CAT in Walter Hugh Merricks CBE v MasterCard Inc and Others [2017] CAT 16, in which the CAT declined to grant a collective proceedings order because both the methodology for calculating the aggregate sum of damages and for estimating individual loss were impractical.
According to the Competition Appeal Tribunal website, two further applications for collective proceedings have recently been made, on a follow-on basis, by UK Trucks Claim Limited (“UKTC”) and Road Haulage Association Limited (“RHA”). These representative bodies are seeking damages pursuant to a decision of the European Commission which found that various truck manufacturers had infringed EU law by colluding in relation to pricing and the timing and cost of the introduction of emissions technology into certain trucks. The CAT’s decision in relation to the applications is still awaited (1282/7/7/18 UK Trucks Claim Limited v Fiat Chrysler Automobiles N.V. and Others and 1289/7/7/18 Road Haulage Association Limited v MAN SE and Others). The Tribunal may also make an order approving the settlement of a group of claims, whether or not these have been managed under a collective proceedings order, if it is satisfied that such a collective proceedings order could have been made when the proceedings were commenced and the terms of the settlement are just and reasonable.
At present, there is no other procedure by which representative bodies can bring collective damages actions on behalf of a group of Claimants. However, the Government indicated in its report ‘Improving Access to Justice through Collective Actions’ (see question 9.2) that representative bodies could be authorised to bring collective actions in areas other than competition law if there is a need.
It is not uncommon for there to be different groups of claims managed under one GLO; for example, if a group of Claimants are unable to join the GLO by the cut-off date, they may be managed as a separate group ‘B’. Such claims will commonly be stayed by the court, pending the outcome of the first group of claims.
In accordance with his or her general case management powers, the judge can also order the trial of generic preliminary issues of law and fact in separate proceedings prior to the main trial, and can decide the order in which issues are to be tried in the main trial. In the recent DePuy case, a complex personal injury group litigation, the court took over three months to hear evidence in relation to six test cases from more than 40 witnesses and experts on the preliminary question as to whether or not DePuy’s metal hip implant was defective [Colin Gee and others v DePuy International Limited [2018] EWHC 1208 (QB)].
■ the transfer of claims to a different court that will manage the litigation;
■ appointing lead solicitors to act on behalf of the Claimants and Defendants;
■ specifying the details to be included in the pleadings – it is common for the courts to order that test cases should be pleaded in full or that generic pleadings are prepared, but they may only require limited information to be provided for the remaining claims, by means of a schedule of information or questionnaire; and
■ as to recoverable costs and other measures, see section 6 below.
Experts are generally appointed by the parties rather than by the courts. No expert may give evidence, whether written or oral, without the court’s permission and the court may, in appropriate cases, dispense with expert evidence or require that evidence on a particular issue be given by a single joint expert. (The court will select a joint expert from a list prepared by the parties if they cannot agree on who should be instructed.) The extent of the expert evidence that is permitted will be proportionate to the complexity and value of the claim. For example, in the DePuy case, which was brought by more than 300 Claimants, the parties filed evidence from 21 experts in relation to the trial of the preliminary issue.
The Court Rules provide a flexible approach to disclosure of documents. In determining the scope of disclosure, the court will take account of the costs of giving wide-ranging disclosure of documents and will ensure that these are proportionate to the overall sums in issue in the proceedings. In most claims (except certain low-value claims), the court can tailor the disclosure order to reflect the circumstances of the individual case and can choose from a menu of options including: dispensing with disclosure; requiring disclosure of documents on which a party relies and specific documents requested by their opponent; issue-based disclosure; ‘train of inquiry’ disclosure; standard disclosure; or any other order that the court considers appropriate. In claims involving personal injuries, the general rule is that a party to an action is required to disclose the documents in his control on which he relies and which adversely affect his own case or support another party’s case (so-called ‘standard disclosure’, and these include the Claimant’s medical records), although the court may dispense with or limit such disclosure in appropriate cases.
Disclosure usually takes place after pleadings have been served, setting out the parties’ cases. However, the court also has the power to order pre-action disclosure in appropriate cases in order to dispose fairly of the proceedings. Such disclosure may only be ordered in respect of specific documents or classes of documents that would have to be disclosed in any event once the proceedings are under way. A party may also seek an order for disclosure of specific documents or classes of documents.
The obligation to give disclosure continues until the action is at an end and applies to documents created while the proceedings are under way. A party may not rely upon any documents that it does not disclose. Moreover, if a party withholds documentation that should have been disclosed, the court may impose cost penalties or draw an adverse inference.
This depends on the complexity of the case and the value of the claim. According to the Civil Justice Statistics Quarterly for England and Wales for January to March 2018, published by the Ministry of Justice, unitary civil actions proceeding in the County Court (excluding certain small claims which are fast-tracked), on average, took 57 weeks from the issue of proceedings until trial. Equivalent statistics are not available for High Court actions, but these cases are generally more complicated and therefore take longer to come to trial.
Complex group actions may take many years to come to trial. For example, in the third generation, oral contraceptives litigation it took approximately six-and-a-half years from the issue of the first proceedings until judgment. In all cases, delay is largely a result of the conduct of the parties and is not inherent in the court system.
Separate rules apply to personal injury claims for damages in respect of negligence, nuisance or breach of duty. In such cases, the claim must be brought within three years from the date on which the cause of action accrued (i.e. the date of injury or death) or the date of knowledge (if later) of the Claimant of certain facts. The date of knowledge is when the Claimant is aware of the identity of the Defendant, that the injury was significant, and that it was attributable in whole or in part to the alleged negligence, nuisance or breach of duty. The court has a discretionary power to disapply this time limit where it would be equitable to do so.
Special rules apply to persons under a disability, during such period as they are a minor or of unsound mind. In general, time only begins to run for limitation purposes when such a Claimant dies or ceases to be under a disability. However, the 10-year long-stop for CPA claims still applies.
In contract claims, damages are intended to put the injured party into the position he would have been in had the contract been performed. Damages are usually awarded for monetary loss (for example, in respect of damage to property), but they can include non-pecuniary losses, such as damages for death or personal injury (including mental injury) where this was within the parties’ contemplation as not unlikely to arise from the breach of contract. Economic losses, such as loss of profits, are recoverable if these are a foreseeable consequence of the breach.
In negligence claims, damages are awarded to put the injured party into the position he would have been in had the negligent act not occurred. Damages can be recovered for death or personal injury (including mental injury) and damage to property. Pure economic losses which are not consequent on physical damage are not generally recoverable in negligence, save in some cases of negligent advice.
Additional restrictions apply to the recovery of damages for mental injury. In the absence of physical injury, the English courts will generally only permit recovery of damages for personal injury where the Claimant has suffered a recognised psychiatric injury. Mere anxiety or distress are not, on their own, sufficient to ground a claim for damages in tort. However, they may be recoverable in limited exceptional circumstances for breach of contract where the object of the contract was to give pleasure (e.g. claims for compensation arising from a failed holiday).
In general, a Claimant may unilaterally discontinue all or part of his/her claim at any time. However, the court’s permission is required for compromise or settlement of proceedings instituted against or on behalf of a minor (aged under 18) or an adult who is incapable of managing their own property and affairs. Court approval is also usually sought where there is a settlement or compromise of an unlitigated claim made by, or on behalf of, or against, such a person, as a compromise is not enforceable without the approval of the court. There is no general requirement to seek court approval in other circumstances; for example, on the settlement of the claims comprising a group action.
However, the Competition Act 1989, as amended, includes a collective settlement procedure in respect of claims relating to infringements of competition law. Under these rules, the CAT may approve the settlement of opt-out collective proceedings managed under a collective proceedings order. It also has the power to approve the settlement of a group of claims that were not managed under such an order, if it is satisfied that a collective proceedings order could have been made when the proceedings were commenced.
Costs are actively managed by the court throughout the proceedings. In most cases commenced after April 2013, except for some types of high-value claims (where the sums in dispute exceed £10 million excluding interest and costs), the parties are required to file and exchange costs budgets after the defence is served or prior to the first procedural hearing, setting out their estimate of the costs they anticipate recovering from their opponent if successful. Strict time limits are applied to filing these budgets, and if these are not met the party in default may only recover court fees. If the budgets are not agreed, they will be reviewed by the court, which may make a costs management order. This may be revised as the litigation progresses, but only significant developments will justify such revisions. In assessing the amount of recoverable costs at the conclusion of the litigation, the court will not depart from the agreed budget unless it is satisfied that there is good reason to do so. The budget therefore effectively acts as a cap on the level of costs which the winner may recover from the losing party. This does not restrict the freedom of the parties to investigate and litigate claims as they consider appropriate (the parties may exceed the amount of the court-approved budget if they wish to do so), but those costs will not be recoverable from the opposing party on the successful conclusion of the litigation.
The assessment of costs is a matter for the court’s discretion and the court can make such orders as it considers appropriate reflecting matters such as the parties’ conduct and their success or failure on particular issues in the proceedings (either by reducing the costs award made in favour of the successful party to reflect the fact that they were unsuccessful on certain issues, or by making issue-based cost orders). In determining the amount of recoverable costs, the court will assess whether the sums claimed were reasonably incurred and were proportionate to the overall value of the case. However, the court will only depart from the costs budgets agreed by the parties or approved by the court if there is ‘good reason’ to do so (Harrison v University Hospitals Coventry and Warwickshire NHS Trust [2017] EWCA 792). What amounts to a ‘good reason’ depends on the facts, but this may include the need to ensure that the costs incurred are proportionate to the damages paid following settlement of a claim (RNB v London Borough of Newham [2017] EWHC B15 (Costs)).
Where a party makes an offer to settle which meets certain procedural requirements (a “Part 36 offer”) and this is not accepted by the other party in satisfaction of the claim, then various sanctions will apply unless that other party achieves a better result at trial. A party which fails to ‘beat’ a Part 36 offer becomes liable to pay the costs incurred after the date the offer could last have been accepted. In the case of a Defendant failing to beat a Claimant’s Part 36 offer, additional sanctions apply: the damages payable will be increased by between 5 and 10% (depending on the amount awarded) subject to a maximum uplift of £75,000; the costs incurred after the offer was made will be payable on an indemnity basis; and interest on the value of the claim will be payable at an enhanced rate.
The Court Rules provide a framework for sharing costs between the Claimants whose claims are entered on the GLO group register. Each litigant has responsibility for the individual costs of his/her claim together with his/her share of the common costs. Although the rules envisage that common costs will be shared equally, the court may make a different order if this would be unfair (Greenwood and others v Goodwin and others [2014] EWHC 227 (Ch) in the RBS Rights Issue Litigation). Any order for costs against group litigants imposes several (as opposed to joint) liability for common or generic costs, unless the court makes a different order. Each Claimant may be ordered to pay a share of any common costs incurred before he/she joined the group action, but not after he/she has concluded or compromised the claim and left the action.
See the answer to question 6.1 above. Costs are actively managed throughout the proceedings and, where costs budgets are not agreed by the parties, the court may make a costs management order after service of the defence. The court can also impose a cap limiting the amount of future costs that a party may recover where there is a substantial risk that, without such an order, the costs incurred will be disproportionate to the sums in issue and the costs cannot be adequately controlled through usual case management procedures. Such orders have been imposed in group litigation (see, for example, AB and Others v Leeds Teaching Hospitals NHS Trust and in the matter of the Nationwide Organ Group Litigation [2003] Lloyds Law Reports 355 and Multiple Claimants v Corby Borough Council [2008] EWHC 619 (TCC)) and can be made against any party and at any stage of the proceedings and may relate to the litigation as a whole or to specific issues. These orders do not prevent parties from exceeding the cap, but merely bar recovery of costs expended above the cap from the unsuccessful other party.
Yes, in certain circumstances. In Arkin v Borchard Lines [2005] 1 WLR 2055, the Court of Appeal made it clear that, in principle, third-party funding may be an acceptable means of funding litigation. However, certain third-party funding arrangements may be unenforceable. In R (Factortame Ltd) v Transport Secretary (No.8) [2002] EWCA Civ 932, the court held that in deciding whether a funding agreement is objectionable (champertous), the courts will take into account whether the funder controls the proceedings, whether the agreed recovery rate is fair and whether the agreement facilitates access to justice. If the funder controls the proceedings, the agreement will usually be champertous and unenforceable. In addition, as the funder will generally be treated as if he was a party to the proceedings, he will be exposed to costs liability.
Arkin concerned the award of costs against a third-party funder. The Court of Appeal held that in the case of an objectionable agreement, the funder will be liable to pay his opponent’s costs without limit if the claim fails; in the case of an acceptable agreement the funder’s cost liability is limited to the amount of the funding he provided (known as “the Arkin cap”). However, in Bailey and others v GlaxoSmithKline UK Ltd [2017] EWHC 3195 (QB), the Court ordered security for costs against a litigation funder in excess of the Arkin cap, on the basis that the Arkin cap was just one factor to be considered in relation to funding by a third party, and, in order to do justice, should not fetter the court’s general discretion as to the assessment of costs at the end of the case.
Yes. There are a variety of different methods of alternative dispute resolution (“ADR”), including mediation, arbitration and neutral evaluation. A range of Ombudsman schemes are also available.
The courts encourage the use of ADR to resolve disputes and the pre-action protocols to the court rules provide that the parties should consider whether some form of ADR is more suitable than litigation before commencing proceedings. While the courts cannot compel the parties to use ADR procedures (Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576), failure to follow the protocols may result in a costs sanction, and there has been judicial criticism of parties reluctant to mediate, with the suggestion that the decision in Halsey should be reviewed (Wright v Michael Wright Supplies Ltd and another [2013] EWCA Civ 234). Indeed, courts have refused to award costs to a successful party where they unreasonably refused to mediate (Dunnett v Railtrack plc [2002] EWCA Civ 303).
Yes. Proceedings may be brought in England and Wales by foreign Claimants against English-based corporations or bodies based on the actions of their subsidiaries in other jurisdictions. For example, group actions have been pursued in England in respect of actions arising from exposure in South Africa to asbestos mined or processed by an affiliate of an English company (Lubbe v Cape Plc [2000] 1WLR 1545); by a group of Claimants from the Ivory Coast against a British-based oil trader, Trafigura, for damage allegedly caused by the dumping of toxic waste; by a group of Bangladeshi villagers against The Natural Environment Research Council, a British organisation which allegedly conducted a negligent survey, in respect of damage arising from contaminated ground water(Sutradhar v Natural Environment Research Council [2006] UKHL 33); and by a group of Zambian citizens for damages arising from pollution and environmental damage allegedly caused by a copper mine run by the Zambian subsidiary of an English holding company (Lungowe v Vedanta Resources Plc [2016] EWHC 975 (TCC)).
Broadly, where the parties are European, questions of jurisdiction will be governed by the Judgments Regulation (No. 44/2001(EC)); where the Claimants are non-EU, the English courts generally have jurisdiction to hear cases brought against persons domiciled in England. The courts no longer have discretion to refuse jurisdiction against such English Defendants on the ground that the courts in another jurisdiction would be a more suitable venue for the trial of the action (Owusu v Jackson [2005] ECR I-1383, Lungowe v Vedanta Resources Plc (ibid)). The Court has since held that Owusu does not prevent the English court from giving effect to an exclusive jurisdiction clause in favour of a court in a non-Member State, even where the Defendant is domiciled in England (see Konkola Copper Mines plc v Coramin Limited [2005] EWHC 898 (Comm) and endorsed in Plaza BV v The Law Debenture Trust Corporation plc [2015] EWHC 43 (Ch))
As outlined above, the UK Government has introduced a collective redress procedure in respect of competition law claims as part of a range of measures to try to encourage private actions arising from breaches of competition law. However, following the CAT’s refusal to grant ‘opt-out’ collective proceedings orders in two claims to come before it (the Pride Mobility and MasterCard cases, and the as yet undetermined applications in the UKTC and RHA cases (see question 2.1 above)), there remains uncertainty over the extent to which these procedures will, in fact, achieve this aim.
There do not appear to be any current plans to extend the existing general group action procedure to permit claims to be brought on an ‘opt-out’ basis. The UK Government has considered the adequacy of general measures for collective redress on a number of occasions, but these initiatives have not been progressed pending separate European reviews of collective redress, which are discussed in our overview chapter, ‘EU Developments in Relation to Collective Redress’. The UK Government’s position was most recently articulated in its consultation ‘Private Actions in Competition Law: A Consultation on Options for Reform’, published in April 2012. It stated that it does not favour the introduction of a generic collective redress mechanism covering all sectors, either in its domestic jurisdiction or at EU level. Instead, it favours an approach targeted at specific sectors where there is a need, based on minimum standards of access to justice.