Conning the IADC Newsletters.

Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them.

Multi-party Actions in England: Now and Future

Writing in the September issue of the newsletter of the Class Action and Multiparty Litigation Committee, Arundel Macdougall of Rowe & Maw, London, describes the evolution of the multi-party action in England:

The closest United Kingdom equivalent to a mass tort class action in the United States is the multi-party action.

The key to the progress of multi-party or group actions is funding for the claimants. Two highly publicised collapses in 1999 have fuelled speculation that the "mass tort" type of action in the U.K. is in decline because it is financially insupportable. The Norplant and Tobacco claims were funded in different ways, but they both failed late in the day, leaving their funders, the Legal Aid Board and the solicitors who conducted the case on conditional fee agreements (CFAs) respectively, very substantially out of pocket.

Averse to financial risk

CFAs have been around since 1990 and are being re-engineered in the Access to Justice Act 1999, which became law in July 1999, in order to make them more attractive. Despite this, and unlike their U.S. counterparts, most U.K. lawyers are unlikely to carry the financial risk of speculative litigation for various reasons:

* The track record to date has not been impressive, and we have less of a cultural predisposition to the considerable financial risks involved.

* There has a limited take up by the insurance market of after-the-event cover for CFAs.

* We don't have juries awarding punitive damages.

* Successful CFA solicitors are limited in their recovery of the success fee to a percentage of the eventual damages.

But the U.K. government is committed to access to justice. As part of this policy it has confirmed it will maintain a public fund for test or public interest cases. The nature of that fund is under debate. Notable failures where millions of taxpayers' funds have disappeared on insupportable cases has made the issue a hot potato, but as a defendant's counsel you could be forgiven for thinking it is only the names which are changing.

Under the Access to Justice Act, the functions of the Legal Aid Board will be transferred to the Legal Services Commission, which will be responsible for administering the Community Legal Service budget from which the funds will be distributed to franchised operators experienced in different types of litigation. The same firms will crop up who have been at the forefront of the group action explosion over the last few years.

Public funding continues

So there will continue to be public funding of one sort or another. Current cases suggest that legal aid will continue to be granted for highly speculative, albeit high profile, cases. One example is the provision of legal aid for the claimants currently appealing against the judgment of Mr. Justice Buckley in the Group Action Afrika & Ors v. Cape PLC.

This is an action in which the group of claimants, South African asbestos workers, was small (just five) and now numbers 3,000. The central issue was forum conveniens: whether the workers could found jurisdiction to bring proceedings for negligence in England, where legal aid is available to them, against the parent company of their South African employer. No funding was available to them in South Africa, though that jurisdiction is clearly the more closely connected to their alleged personal injury.

The Court of Appeal had lifted the stay imposed by a judge at first instance when the group was small (July 1998), but in July 1999, a first instance judge (Mr. Justice Buckley) reimposed the stay, saying that the rules in group actions were not designed to apply to claimants in other jurisdictions, not least because the U.K. courts could not prevent them from instituting proceedings in their own jurisdiction. The claimants have. now appealed, and that appeal, funded by legal aid, was due to be heard in September.

MMR now a group action

The MMR/MR vaccine litigation mumps and/or measles and rubella) is now formally a group action with several hundred claimants supported by legal aid. Also the LSD litigation and the organophosphate litigation have been made group actions, again with legal aid buttressing the claims.

So the era of the multi-party action is not over. It is merely changing, and public funding is likely to continue breathing life into speculative claims.

New procedural regime

A new procedural regime, the Civil Procedural Rules, came into being in April 1999. (See "Wholesale Changes to the English Civil Justice System Go into Effect," by Richard Highley, Defense Counsel Journal, July 1999, page 334.) Though not in the first wave of reforms, group actions will not be exempt.

Historically, group action procedure has been developed ex tempore, and though there has been much debate between plaintiff's and defendant's interests as to what is appropriate, the procedure has proved too specialised and case specific to codify. Therefore, it was not in the first round of new rules when they arrived last April. The Lord Chancellor's Office is inviting lawyers to comment on a draft Multi-party Situation (MPS) rule and practice direction, the objective of which is at long last to provide a regulatory framework for multi-party actions in the future. Consultation is continuing, and there are many points to be resolved, but multi-party actions (MPSs) will soon have their own procedure.

Shape of the future

What is it going to look like? There is going to be a large element of judge control and discretion. This is consistent with one of the dominant features of the new regime, which elevates the court to being a case manager as well as a case decider. Certification of an MPS will be based on variable criteria, but the principle appears to be that there must be at least 10 separate claims raising common issues.

Once an MPS is certified by the court, either of its own motion or on the application of any interested party, the case management judge assumes control. So who gets on to the register to be managed by the lead solicitor, and when and what he or she has to do once there will all be a matter for the managing judge.

Shortly after certification there will be a management conference, and all the many and varied directions which may be appropriate to the case will then be considered. An innovation is the idea of a costs judge whose job will be to rule on the complex issues, which are rendered more complicated by the intricacies of the legal aid regulations on multi-party actions, relating to apportionment of liability for costs across the group, as between generic or common costs and individual case costs. Other current issues to be resolved include questions as to whether entry on the register should have any effect on crystallising the limitation period; the extent to which parties and non-parties are to be bound by findings on common issues; and whether the court can exercise powers of settlement of lead cases.

Further amendments to the draft Rule are expected. The rule will form part of a statutory instrument to be laid before Parliament in January 2000 and to come into force in April 2000.

Alternative forums considered

Finally, difficulties over funding speculative claims have begun to lend prominence to other forums and procedures such as the public enquiry, as a means of group claimants who may not be in receipt of funding, establishing a prima facie case on liability, rather than having to assemble the scientific evidence to assess the balance of probabilities. A finding of a breach of statutory duty may be a way of opening up a cause of action even though such inquiries are not judicial proceedings.

Public enquiries into such events as the Southall rail incident, recently reopened after two year's worth of criminal proceedings resulting in a 1.5 million [pounds sterling] fine against Great Western Trains, and the Marchioness Disaster, will be keenly watched by relatives and others connected with those killed or injured, as well as by the lawyers, to see whether sufficient evidence emerges with which to seek public funding to pursue a legal case.

Daubert Inspires Exclusions of Expert Testimony

Writing in the October issue of the newsletter of the Drug, Device and Biotech Committee, Patrick Lysaught of Polsinelli, White, Vardeman & Shalton, Kansas City, Missouri, discusses recent cases in which expert testimony didn't meet Daubert standards:

Courts continue to rely on Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (1993), and its progeny to dismiss various claims summarily. Many of the cases relying on Daubert arise in drug and medical device cases. However, many helpful decisions or decisions which should alert defense counsel to potential problems arise in other substantive areas. Often, these decisions provide further insight to defense lawyers who seek to exclude unreliable "expert" testimony. The following two cases are illustrative.

Third Circuit

The plaintiff brought a claim against the defendant for certain respiratory illnesses allegedly caused by volatile organic compounds (VOCs) emitted by carpet installed in the plaintiff's former home. The district...