GROUP LITIGATION: An Introduction to UK-wide

The following In-Depth Overview featured in Chambers UK 2024 and is awaiting update from the firm.

The primary purpose of group litigation is (in the words of Lord Woolf’s 1996 Access to Justice Report) to “provide access to justice where large numbers of people have been affected by another’s conduct, but individual loss is so small that it makes an individual action economically unviable”.

Multi-party litigation existed before the Woolf reforms, but in the three decades since the Woolf Report, group litigation orders and group litigation generally in England and Wales have grown and evolved from a niche and rarely-used form of collective management for discrete case types into an effective and common tool used by practitioners in consumer, financial services, environmental, data protection and medical claims.

In parallel with this, following the decision in Merricks v Mastercard, the number of opt-in and opt-out collective actions brought in the Competition Appeal Tribunal (CAT) has steadily increased. Claims on behalf of consumers and businesses in sectors as diverse as transport (trains, trucks, maritime car carriers), financial services (interchange fees) and consumer technology (app store, Google play store) have been certified by the CAT, with an even wider range of cases awaiting certification.

Representative actions offer a potential third way for claimants to access justice, although the future of this area of the law remains uncertain after the decision in Lloyd v Google. More recently, in Commission Recovery Limited v Marks & Clerk LLP, the court revisited the question of whether the regime under what is now CPR 19.8 could be used to obtain redress on behalf of a class of affected people in proceedings brought by a single representative. It remains to be seen how feasible this mechanism is in practice.

Bespoke case management in the Employment Tribunal (ET) has also developed in recent years in order to allow claims against some of the UK’s largest employers to proceed in an orderly manner. So-called equal pay claims against several supermarkets are proceeding through the ET, as are claims on behalf of workers in the gig economy against employers.

The growth in availability of third-party litigation funding and non-traditional firm structures has helped to level the playing field and allow claims which traditionally would have offered little value to claimants to be brought in an economic and effective way. Third-party funding is often vital for claimants seeking redress through collective actions. As a result, those practising in claimant-side group litigation will often be experts in the field of litigation financing and will typically act on damages-based agreements or conditional fee agreements, meaning that claimants tend to benefit from “no-win, no-fee” arrangements with their lawyers, shifting much of the financial risk of proceedings away from litigants and onto their lawyers and financiers.

In its decision in R (on the application of PACCAR Inc and others) v CAT and others, the Supreme Court has recently introduced some uncertainty into the market by finding that one common structure through which collective actions are often brought in the High Court and the CAT (where a third-party litigation funder enters into a litigation funding agreement with a litigant in which the funder agrees to pay all or some of the costs of the litigation in return for a share in the claimants’ potential damages) is likely to involve unenforceable funding agreements which, properly characterised, are damages-based agreements. It is anticipated that funders, lawyers and claimants will use alternative structures in future collective actions, particularly outside of the CAT’s opt-out regime, which prohibits the use of damages-based agreements by solicitors.

Firms such as Edwin Coe, Hugh James and Leigh Day have been active in claimant-side group litigation for decades, whereas newer disputes-only firms like Harcus Parker, Keller Postman, Milberg London and Pogust Goodhead have grown quickly since their entry into the market. Firms focusing traditionally on claims in the CAT such as Hausfeld and established litigation-only practices such as Signature LLP have more recently expanded their offering to include group claims on behalf of consumers, and the general trend is towards broad practices incorporating collective actions of all kinds.