The Rise of Multi-claimant Litigation in England and How Companies Can Manage Potential Exposure

• Publication year: 2023

[Page 225]

Sheila L. Birnbaum, Mark S. Cheffo, Dorothy Cory-Wright, Evan Flowers, Jacqueline Harrington, Will Sachse, Stephen Surgeoner, Rachel Leary, Caroline Power, and Julie Witham ^*

Abstract: Recent court decisions have signaled the English courts' willingness to embrace multi-claimant litigation and to broaden the types of questions decided on a collective basis. These developments have led UK-based plaintiffs' lawyers to expand mass tort filings, including doing so in partnership with US plaintiffs' lawyers who are actively advertising in England. This article provides an overview of multi-claimant litigation in England, highlights some of the factors that may lead to its increase, and discusses steps that companies operating in the English market can take now to manage potential exposure.

Overview of Multi-Claimant Litigation in England

There are three primary mechanisms for bringing collective actions before an English court: representative actions, group litigation orders (GLOs), and collective actions before the Competition Appeal Tribunal (CAT).

Representative actions, in their current form, and GLOs are products of the general Civil Procedure Rules (CPR). Representative actions originated in the common law and permit a representative claimant or defendant with the "same interest" in a claim to represent that interest on behalf of a class. ¹ Although coordination of collective claims has been available since the 1980s, this procedure was codified when GLOs were introduced to the CPR

[Page 226]

in 2000. GLOs "provide for the case management of claims which give rise to common or related issues of fact or law." ² Parties can apply for a GLO or the court can issue one on its own initiative. GLOs proceed on an opt-in basis, and a single court issues orders addressing the common issues to avoid inconsistent rulings. GLOs provide a mechanism to manage multi-claimant actions, offering greater flexibility in the types of claims aggregated and how they are managed.

The CAT is a specialized tribunal authorized by statute to hear collective actions brought under competition law, consumer protection law, and data breach statutes, among others. Collective actions before the CAT were historically raised on an opt-in basis, ³ but changes introduced in 2015 have allowed certain CAT actions, including competition-based claims, to proceed on an opt-out basis as well. ⁴

Factors That May Precipitate an Increase in Multi-Claimant Litigation in England

Over the past several years, there are signs of increased use in England of multi-claimant actions, many in areas familiar to multidistrict litigation (MDL) practitioners in the United States, such as auto emissions and medical devices. ⁵ These increases appear to be driven by the factors discussed below.

Recent Judicial Decisions Facilitate Expansion of Multi-Claimant Litigation

In recent years, courts have allowed creative multi-claimant pleadings across subject matters, encouraging the use of GLOs and the CAT. The courts' comments appear to balance two goals: encouraging the use of multi-claimant actions for the sake of efficiency, on the one hand, and enforcing the restrictions on each form of multi claimant action, on the other hand. Two recent decisions are illustrative:

Lloyd v. Google involved an opt-out representative action concerning use of consumer data. ⁶ The governing statute determines damages from improper data use based on facts such as the types of

[Page 227]

data at issue and the number of instances of misuse, but the claimants sought to homogenize their class by seeking only the minimum damages for all users. ⁷ The UK Supreme Court held that the claims required an individualized determination of facts and damages that plaintiffs could not escape with creative pleadings. Although the Court noted that representative actions are appropriate for seeking declaratory relief on questions of liability and where uniform damages apply, it appeared to indicate a preference for GLOs outside these situations. ⁸ While declining to expand the application of the representative action mechanism, the Court noted the efficiency of multi-claimant actions more generally and appeared to invite their continued use.

The Court emphasized, "[t]he mass production of goods and mass provision of services have had the result that, when legally culpable conduct occurs, a very large group of people, sometimes numbering in the millions, may be affected." ⁹ Consistent with the ruling in Lloyd, English courts are becoming more active in managing GLOs and using them to generate efficiencies.

In Merricks v. Mastercard, the UK Supreme Court affirmed a lower threshold for bringing collective actions before the CAT. Under the statutes governing the CAT, class claimants must obtain certification of the collective action by establishing that their claims are "suitable to be brought in collective proceedings." ¹⁰ The CAT rules identify various factors impacting suitability, including efficiency of collective treatment, the size and nature of the class, whether class members are readily identifiable, and whether an aggregate award of damages would be appropriate. ¹¹

In Merricks, the claimants relied on a prior regulatory finding of excess credit card fees to bring an opt-out class action on behalf of all adult UK purchasers impacted by the fees. ¹² While the claim sought relatively low damages for each person, the class was estimated to include 46.2 million people, supporting a claim of over £14 billion in total damages. The CAT initially denied certification of...