What is the status of class actions and group litigation in England?

There is a growing trend in the English courts for parties seeking redress to do so in increasingly larger groups.

These collective, class or group actions enable a group of individuals or entities to pursue a common legal claim against a single defendant or group of defendants. While competition proceedings have been leading the way for these claims in recent years (utilising the opt-out procedure in the Competition Appeal Tribunal), these mass claims are growing across a wide spectrum of the English legal system.

There are different types of collective actions, outlined below, but the appropriate form of action will depend on the number of claimants, amounts at stake, and the legal issues.

The complexity of coordinating with multiple claimants and navigating diverse legal frameworks presents significant challenges across many sectors, for example motor finance claims, which are expected as a result of the FCA's review of discretionary commission arrangements; greenwashing or "social-washing" claims against large companies for damaging operations; data breach claims in the wake of cyber attacks; and product liability claims.

Funding for class actions

There are several funding models available that allow mass litigation to proceed. The three types of funding arrangements commonly used in class actions are conditional fee agreements, damages-based agreements and litigation funding agreements.

Conditional fee agreements

CFAs are agreements between a claimant and solicitors, where the client pays their solicitor different amounts depending on the outcome of the case.

These arrangements are often referred to as "no win, no fee" (although they are not limited to this), and if the client wins, they will be liable to pay all fees and expenses, including a success fee on top of normal fee rates (if one is provided for in the CFA).

Damages-based agreements

These are also a kind of "no win, no fee" arrangement, but under a DBA, a client pays a percentage of damages recovered, irrespective of the fees incurred.

Litigation funding agreements

This is where a third party, unconnected with the litigation, agrees to finance some or all of the legal costs in return for a fee payable from any recovery made by the litigant.  However, the Supreme Court decision in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others (2023) dealt a blow to litigation funding when it held that litigation funding agreements are damages-based agreements and therefore only enforceable if they comply with the statutory regime. For more on this, see our Insight.

The decision makes group actions like Bates and others v Post Office Ltd (2019) unviable for litigation funders. The previous government recognised the potential ramifications for the viability of group actions if PACCAR stands, and therefore began to enact legislation to counteract it, however it did not pass in the 2024 pre-election wash-up and now bears the status that the bill "will make no further progress". The Ministry of Justice has stated that it will make a decision on the bill's reintroduction once the Civil Justice Council concludes its report on third party civil litigation funding, which is anticipated in summer 2025.

Types of class action    

Group litigation orders

The main class action mechanism in the English courts is the group litigation order (GLO) procedure set out within Civil Procedure Rule (CPR) 19, under which the court can order a large number of related claims to be managed as part of the same group. It is known as "opt-in" litigation because individuals need to opt into the litigation and be named as claimants on the claim form.

GLO claims must give rise to "common or related issues of fact or law (the 'GLO issues')" (CPR 19.21), which define common elements in the litigation, by reference to which the scope of the GLO is determined.

The relatively brief CPR provisions establish a framework for the case management of multiple claims by different parties, whilst providing flexibility to the court to deal with the various logistical and legal issues raised. It is a matter for the court’s discretion, rather than the parties’ right, to proceed under a GLO.

When is it used?

GLOs have not been widely used to date, with few formal GLOs being granted in recent years. However, there has been increased interest in using GLOs across a number of sectors, including product liability, data and privacy and financial services.

Advantages 

• The appointment of a single managing judge for the proceedings enables consistent decision making.
• A GLO must also be advertised, informing potential claimants of any action and providing essential access to justice for collective action.
• There is no minimum or maximum number of claims needed for a GLO to be made.
• There also is no requirement for all of the claims that are subject to a GLO to have been issued when the GLO application is made. However, once a GLO is ordered there will be a cut-off date to attract other claimants to the GLO.
• Once there is a judgment on one GLO issue, that is binding in relation to all other claims on the GLO group register (unless otherwise ordered by the court).  This gives certainty to the pool of claimants to whom the GLO applies (but could also be considered to be a disadvantage, if a decision doesn't go the desired way).

Disadvantages 

• Given it is within the court's discretion to order a GLO, applicants should first consider whether any other order would be more appropriate. As such, claimants may be required to front-load work at the outset of a claim.
• It can be difficult to establish the requisite common issues in cases where different contractual arrangements are put in place between parties, or different fact-specific allegations are made.
• From a claimant's perspective, persuading individuals or businesses to join into the action can prove challenging.

Example: Bates and others v Post Office Ltd 

The now-infamous High Court case against the Post Office exposing the Horizon IT scandal was brought by 555 postmasters and sub-postmasters, and was pursued under a High Court GLO. The court conducted a trial to determine issues in relation to the operation, functionality and reliability of the Horizon system, which the claimants were required to use as sub-postmasters. 

There were a number of GLO issues raised, and corresponding judgments were released for each. One particular issue concerned the standard form contract between the Post Office and the claimants, and whether it gave rise to duties of fair dealing, trust and confidence on the part of the Post Office. Another set of GLO issues concerned the operation and functionality of the Horizon computer system itself. 

The availability of the GLO route meant that all of these claims could be handled together rather than being separated, which would have increased time and costs, but also would have presented a significant risk of inconsistencies between claims.

Opt-in and opt-out proceedings in the Competition Appeal Tribunal

In England and Wales, collective claims can also be brought in the Competition Appeal Tribunal (CAT). These are actions for breaches of competition law that can be brought by a representative on behalf of an entire class under section 47B Competition Act 1998.

Two different types of collective claims can be brought in the CAT. Before 2015, only opt-in collective actions were available, which require class members to actively notify the class representative that they wish to be included in the claim.

The Consumer Rights Act 2015 introduced a second type of collective claim: opt-out collective claims for standalone and follow-on damages actions.

As the name suggests, in opt-out proceedings any remedy awarded will be available to all members of the class except those that have opted out of participating in the proceedings by notifying the representative. Additionally, any class member not domiciled in the UK at a specified time who does not opt-in to the claim will be excluded.

These claims can therefore be brought without identifying all the individual claimants or obtaining their permission.

When is it used?

Although these collective claims are currently limited to claims for breach of competition law in the CAT, there has been debate over the expansion of the regime to the wider consumer protection space.

Claims are only eligible for inclusion in collective proceedings if the CAT considers that two conditions are fulfilled. First, the claims must raise the same, similar or related issues of fact or law (the "common issues requirement"). Second, claims must be suitable to be brought in collective proceedings (the "suitability requirement").

The meaning and scope of these requirements is central to the process of certifying claims as opt-out collective claims and has been the subject of interpretation by the courts.

Advantages

Opt-out proceedings have two notable advantages for claimants compared to other group actions:

They allow the legal rights of a class of people to be determined without the express consent of the members of the class.

They enable liability to be established and damages recovered without the need to prove that individual members of the class have suffered loss. Instead, it is sufficient to show that loss has been suffered by the class viewed as a whole.

Disadvantages

• This regime is limited in scope to competition law infringements. Furthermore, collective proceedings for these claims can only be brought in the CAT, and these may only be continued if the CAT makes a collective proceedings order on the basis of the assessment of its suitability.
• For defendants these claims widen the scope of liability and expose them to claims of substantially higher value.
• From a settlement perspective, a particular quirk of opt-out collective actions is that settlements are public, as they are required to have the approval of the CAT, which is required to confirm the settlement is "just and reasonable". This could be seen as an advantage or a disadvantage depending on the claim and the strategic considerations of the parties involved.

Example: Merricks v Mastercard

The Supreme Court judgment in Merricks v Mastercard (2020) clarified a lower threshold for certifying opt-out collective claims. The case involved allegations that Mastercard charged excessive interchange fees, totalling approximately £12.6 billion, which were passed on to consumers. Mr Merricks, representing 46.2 million individuals, sought to commence opt-out collective proceedings under section 47B.

The CAT initially refused to grant a collective proceedings order, citing insufficient data for aggregate damages and difficulty in approximating individual losses. However, the Supreme Court held that the CAT erred in its assessment. The Supreme Court emphasised that the aim of collective proceedings is to provide access to justice and should not be halted due to challenges in calculating damages.

This ruling has led to an increase in collective claims being certified by the CAT.

Funding

To secure a Collective Proceedings Order, a proposed class representative (PCR) must demonstrate adequate funding arrangements to cover their own costs and any adverse costs orders. Again, the Supreme Court's decision in PACCAR has led litigation funders to reassess how they structure funding for proceedings before the Competition Appeal Tribunal (CAT), as DBAs are unenforceable for opt-out proceedings if the funder's return is based on the damages recovered.

Representative actions

This type of action is brought under CPR 19.8 and applies where more than one person has the same interest in the claim.  It does not require the consent of the individuals represented; there is also no need for a member of the represented class to take any steps or even be aware of the action. A judge can limit the class to people who have opted in, or can permit the establishment of an out-out procedure under CPR 19.8(4)(a).

Representative claims can proceed on a "bifurcated" basis. This means that the common issues are determined at an initial trial under the same interest arm and individual issues are addressed later on –for example, to assess the level of damages.

For completeness, representative actions can be brought under CPR 19.9 if the claim is about: the estate of a deceased person; property subject to a trust; or the meaning of a document, including a statute (and if the claim is about one of this issues then it must be brought under CPR 19.9, but unlike CPR 19.8 claims, requires a court order appointing the representative).

When is it used?

Claimants must satisfy three criteria in order to bring a CPR 19.8 claim: there must be a common interest and a common grievance among members of the class; and there must be a remedy that is beneficial to all of the class.  The landmark case of Richard Lloyd v Google LLC (2021) was a CPR 19.8 action, in which the Supreme Court considered the use of the representative procedure, recognising that this is a flexible tool of convenience in the administration of justice which is even more appropriate in the present day because digital technologies have increased the potential for mass harm for which legal redress may be sought.

Interestingly, third-party funding was utilised in this case, but the Supreme Court queried how funders' entitlements to damages could be established without individual consent from all class members.

CPR 19.9 is used for Part 8 claims in pensions disputes, where a Representative Beneficiary is appointed to represent the affected members of a pension scheme.

Advantages

• Widens access to justice for large groups of people.
• The "opt-out" procedure (if ordered) allows claimants to progress their claim without identifying individual class members, which can save costs and allow for efficient progression of the claim.
• Common issues can be dispensed of at an early stage, saving costs and time.

Disadvantages

• Without the need for consent of an ascertained class, third party litigation funders may not be confident that they will obtain a share of any compensation awarded to the class, given that there is no guarantee that individual members of the class will enter into funding agreements for their claims once the common issues stage has passed.
• Various practical issues arise where the represented persons do not have to opt-in and consent: some contact details for members of the class may be out of date; the class will be comprised of individuals who do not have legal representation and therefore may struggle to understand the technical issues; and there may be conflicts of interest between members of the class that are not ascertained at the outset.

Example: data protection claims

In Lloyd v Google, the claimant sought to bring a representative claim on behalf of more than four million UK-based iPhone users.  Mr Lloyd was the only representative in the action and tried to break new ground by arguing that compensation could be awarded for loss of control of personal data under section 13 of the Data Protection Act 1998, without the need to prove that the claimants had suffered damage or distress.

However, the Supreme Court unanimously agreed that loss of control damages were not available for breach of the DPA 1998, and that the claim was doomed to fail without proof of damage or distress. The Supreme Court also held that individual assessments of unlawful processing of data would be required to assess whether the breaches were trivial or not, and to assess compensation, meaning that the representative action was inappropriate.

Multiple joint claims or joint case management for several claims

Often, claimant law firms or claims management companies will bring multiple near-identical individual claims against a common defendant.  In these situations courts can order that claims such as these are brought under a "Lead Claimant" model where a small number of test cases are allowed to proceed to test the issues relevant to the rest.

The CPR also allows multiple claimants or defendants and any number of claims to be covered by a single claim form (CPR 19.1 and CPR 7.3).

When is the multiple joint claims approach used?

The test for bringing about such claims is whether they can be "conveniently" disposed of in the same proceedings (CPR 7.3).

The courts are likely to allow multiple joint claims to proceed if it can be demonstrated that the case can be resolved quickly and cost-effectively by joining parties or claims in a single action. Extensive guidance is also given in case law.

Advantages

• This method enables claimants to minimise costs and benefit from a simplified legal process, by using a single claim form and set of proceedings.
• The CPR provides no absolute limit on the number of claimants on a single claim form.

Disadvantages

• Claimants need to present a joint case together throughout the proceedings and at trial unless the court specially orders otherwise, which can lead to delays.
• The Court's determination of what is "convenient" can introduce uncertainty and variability in the application of the rules.
• Care must be taken to articulate each claimant’s claim in the pleadings in sufficient detail, as specific issues to individual claimants might be overshadowed or inadequately addressed otherwise.

Example of multiple joint claims: Morris v Williams & Co Solicitors

In Morris v Williams & Co Solicitors (2024), the Court of Appeal refused to strike out a claim form in which 134 claimants brought a professional negligence claim against a firm of solicitors. It provided detailed guidance on when multiple claimants may file claims using a single claim form, within one set of proceedings.

It departed from the previous key case of Abbott v Ministry of Defence[CE37]  (2023) which suggested that CPR 7.3 required the court to apply a test which enabled the determination of common issues in a claim by multiple claimants under CPR 19.1 to be binding on all parties.

Rather, the court confirmed that CPR 7.3 and 19.1 were to be construed as meaning what they said. No additional test was required and it would determine what was "convenient" according to the facts of each case. This would be so as not to restrict the flexibility of the CPR provisions by requiring that one or more issues must be common to, or bind, all or most of the other parties.

Osborne Clarke comment

Class actions have become increasingly popular in the UK, driven by rising consumer awareness, regulatory changes and landmark cases, such as the Merricks v Mastercard case. The scope of collective actions has expanded beyond traditional areas of personal injury, and now encompasses diverse sectors such as competition law, data breaches, consumer protection and environmental issues.  As outlined in this Insight, the legal framework for class actions in England and Wales has undergone significant developments, and despite the difficulties posed by PACCAR, funding is available, with third party funders structuring agreements to avoid this categorisation.

Osborne Clarke is well-placed to support clients with collective actions, with significant experience acting for both claimant groups and defendants,  providing efficient and effective representation. Our dedicated team leverages extensive experience and innovative strategies to deliver successful outcomes, making Osborne Clarke the ideal choice for these claims.