Class actions in England and Wales

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The English courts have two types of informal mechanisms to bring group claims on an opt-in basis.  The first of these mechanisms is where multiple claimants are named on the same claim form. 1 As permitted by Civil Procedure Rules (CPR), Rule 19.1. This technique can be used where the claims “can be conveniently disposed of in the same proceedings.” 2 CPR, Rule 7.3. The second mechanism is where claims are issued separately, but where the court then orders that they be consolidated 3 CPR, Rule 3.1(g). or tried together. 4 CPR, Rule 3.1(h). An order to consolidate or try claims together can be made either following an application from a claimant or claimants, from a defendant or at the court’s volition. The court had broad discretion on this issue and will be influenced by arguments on efficiency and cost savings in case management.

A more formalised approach for bringing opt-in group proceedings is the Group Litigation Order (“GLO”) mechanism, which was introduced in 1999.  On this approach, group members each issue their own claim and the court may grant a GLO if the claims “give rise to common or related issues of fact or law”. 5 CPR, Rule 19.10 and 19.11. The court will then set up a Group Register that lists the claims that are subject to the GLO.  Judgments and rulings concerning common issues (GLO issues) are binding on all claims that are subject to the GLO.

There are two opt-out mechanisms.

In 2015 the Government introduced 6 Via the Consumer Rights Act 2015, which amended the Competition Act 1998 (the “CA 1998”).  a UK-wide class action mechanism specifically for competition disputes, known as the Collective Proceedings Order regime (“CPO”). These proceedings can only be brought in the specialist competition court, the Competition Appeals Tribunal (the “CAT”). The CPO regime permits a representative to bring claims on behalf of a group on an opt-in or an opt-out basis in appropriate circumstances. This is the first time the UK introduced a statutory mechanism for opt-out claims, which was viewed by many (including the CAT itself 7 Dorothy Gibson v Pride Mobility Products Limited [2017] CAT 9 at [21]. ) as a “radical” step.

The CAT will hold a certification hearing at an early stage of proceedings to decide whether or not the claim is suitable for the procedure and whether to grant a CPO, and whether the claim should be permitted to proceed on an opt-in or on an opt-out basis.  If the latter, judgments and settlements will be binding on all class members save those who choose to opt-out.

The other opt-out mechanism is the Representative Action procedure.  This mechanism dates back hundreds of years, but to-date has rarely been used.  It requires that the representative and class members have the “same interest” in the claim.  The “same interest” test has historically been tightly policed by the English courts with many efforts to use the device rejected. However, the Supreme Court’s decision in Lloyd v Google has lowered the threshold imposed by this test (see answer to question 12 below).  

Under the opt-in mechanisms (both the informal mechanisms and GLOs) the claimants issue their own claims and so there is no representative, albeit the court may select test cases to try and encourage efficiencies amongst the group.

Neither the GLO, the Representative Action mechanism nor the CPO regime specifically restrict the standing of the proposed representative to a particular category (e.g., consumer associations). Although, under the CPO regime the court will examine the proposed representative at the certification stage (see answer to question 12 below for more detail).  

There are no published data on the number of group claims filed using informal opt-in mechanisms.  A list of GLOs made is maintained by the HM Courts & Tribunal Service at https://www.gov.uk/guidance/group-litigation-orders. This records that around 110 GLOs have been granted since 1999, although it is understood that the real number of GLOs is higher as some GLOs have not been included on this list and the list has not been updated since 23 June 2020. . 

The CPO regime is still in its infancy and at the time of publication there have been less than 20 applications for CPOs.  Four of these applications have been granted, and there have been a number of preliminary rulings that have brought clarity to the criteria for approving the representative and also the adequacy of the funding agreements that underpin these claims.  In December 2020, the UK Supreme Court handed down judgment in Merricks v Mastercard, and approved a relatively permissive approach to the certification stage.  This is likely to encourage more claims. 

Attempts to bring opt-out class action using the representative action device have been rare, although a number of claims were filed in 2020 and 2021 including against YouTube, Salesforce, Oracle and TikTok’s parent company ByteDance in reliance on the Court of Appeal’s approach in Lloyd v Google. It remains to be seen whether the Supreme Court’s decision in Lloyd v Google (see answer to question 12 below) means that these claims are no longer viable.

The only class action procedure with any restrictions on the cause of action applicable is the CPO regime, which is only applicable for competition claims (breach of Articles 101 or 102 of the Treaty on the Functioning of the European Union or UK domestic law equivalent sunder Chapter I and Chapter II of the Competition Act 1998).

Damages and injunctions are available for claims brought under the opt-in mechanisms and for representative actions. For CPOs, damages are available and, for claims brought in England and Wales as opposed to Scotland, injunctive relief is also available.  

Damages are generally calculated on a compensatory basis in English proceedings. That said, alternate approaches for assessing damages will be used where appropriate, such as  restitutionary damages or an account of profits.

For CPOs, the CAT is permitted to make an aggregate award of damages which allows damages to be calculated on a class-wide basis rather than calculating damages per class member. It is not necessary to conduct a separate assessment of each class member’s loss to ensure that the distribution to them is compensatory; the only requirement is that the distribution is “fair and reasonable”. 8 Mastercard Incorporated (Appellants) v Merricks (Respondent) [2020] UKSC 51 at [58], [76] (Lord Briggs with whom Lord Thomas agreed and Lord Kerr expressed agreement before his death).

In principle, exemplary damages are available in English law where  there: (1) has been oppressive, arbitrary of unconstitutional conduct by “servants of the government”; (2) conduct has been calculated to make a profit which might well exceed the compensation payable to the claimant; and (3) where provided by statute. 9 Rookes v Barnard [1964] 1 AC 1129.  In practice, awards of exemplary damages are rare.  

There is no prohibition on awarding exemplary damages for class actions brought under any of the opt-in mechanisms or for Representative Actions. Exemplary damages are not available for claims brought under the CPO regime.

This question does not apply to the UK, which will not be required to implement the directive.

There are no special rules for the settlement of claims brought under the opt-in mechanisms or for Representative Actions.

For opt-out claims brought under the CPO regime, settlements must be approved by the CAT which shall only grant its approval “if [it] is satisfied that [the settlement terms] are just and reasonable”. If approved, the terms will be binding on the defendants and also on members of the class other than those that chose to opt-out by the deadline set by the CAT.  

There are no specific rules on jurisdiction that apply to the English class action mechanisms.

Provided that the English court will take jurisdiction, there are no territorial restrictions to who may be group members of claims brought under the opt-in mechanisms.

The territorial scope for opt-out claims brought under the CPO regime is restricted to persons domiciled in the United Kingdom, but persons domiciled elsewhere may opt-in to such a claim.

Opt-in mechanisms

The informal opt-in mechanisms do not have a certification stage, but the court will consider whether those procedures are suitable for the issued claims as follows.

Multiple claims may be initiated on the same claim form provided that the claims “can be conveniently disposed of in the same proceedings.” 10 CPR, Rule 7.3. If the court considers that this threshold is not met then it may order that some of those claims be tried or case managed separately.

The court may order that claims be consolidated or case managed together. There is no formal test for deciding where claims should be case managed in this way, and the court will be significantly influenced by potential costs savings and efficiencies which, in turn, will be influenced the degree of common legal or factual issues between claims.

The court will only grant a GLO if claims “give rise to common or related issues of fact or law”. 11 CPR, Rule 19.10 and 19.11. Again, in deciding whether or not to grant a GLO, the court will consider whether this would be beneficial to efficient management of the claims.  It will consider whether a GLO would assist in determining “an issue or issues which is or are common to all the claims or at least groups of claims within the overall group.” 12 Civil Procedure, Volume 1, 2020, para 19.10.1.   

Opt-out mechanisms

The CAT will hold a hearing to consider whether or not to grant a CPO (i.e., to certify the class).  At the certification hearing the CAT will decide whether: (i) “it is just and reasonable” 13 CA 1998, Section 47B(8)(b). for the proposed representative to act on behalf of the class (the “Eligibility Criterion”); and (ii) the claims “raise the same, similar or related issues of fact or law and are suitable [(the “Suitability Criterion”)] to be brought in collective proceedings.” 14 CA 1998, Section 47B(6). The CAT will also consider whether the CPO should be granted on an opt-in or on an opt-out basis. In assessing the Eligibility Criterion, the CAT will consider factors including whether the proposed representative: (a) would fairly and adequately act in the interests of class members; (b) has any material conflicts with the class members in relation to the common issues; (c) which would be the most suitable representative, if more than one representative is applying; (d) would be able to pay the defendant’s adverse costs if ordered; and (e) if interim relief is sought, whether the representative would be able to satisfy an undertaking for damages as required by the CAT. 15 Competition Appeals Tribunal Rules 2015 (the “CAT Rules”), Rule 78(2). In assessing the Suitability Criterion, the CAT will consider “all matters it thinks fit” including: (a) whether collective proceedings are an appropriate means for the fair and efficient resolution of the common issues; (b) the costs and benefits of continuing the collective proceedings; (c) whether any separate proceedings making claims of the same or a similar nature have already been commenced by members of the class; (d) the size and nature of the class; (e) whether it is possible to determine in respect of any person whether that person is or is not a member of the class; whether the claims are suitable for an aggregate award of damages; and (f) availability of means of alternative dispute resolution. 16 CAT Rules, Rule 79(2). The Supreme Court in Merricks v Mastercard confirmed that the “Suitability Criterion” requires a relative assessment, to consider whether the claims were more suitable for bringing collectively or for bringing the claims individually.

For the Representative Action procedure, the court will permit claims to continue if the representative and the members of the class have the “same interest” in the claim. 17  CPR, Rule 19.6(1). In the case of Lloyd v Google the Court of Appeal approved the use of the representative action device in a claim brought on behalf of an estimated 4.4 million iPhone users. 18 Lloyd (Appellant) v Google LLC (Respondent) [2019] EWCA Civ 1599.  Google appealed to the UK Supreme Court, which gave judgment in November 2021 overturning the Court of Appeal’s decision. 19 Lloyd (Respondent) v Google LLC (Appellant) [2021] UKSC 50.  Although the Supreme Court’s decision has reduced the risk of data protection class actions, the Court endorsed a more flexible approach to the “same interest” test. The Court made clear that class members need not have identical interests to meet that test; while a “conflict of interest between class members” would preclude the use of the representative action mechanism, “merely divergent interests” are not, “in principle,” a bar to using the mechanism. The Court also noted that where divergent interests make it impossible for a single representative to represent the entire class, that could be overcome “by bringing two (or more) representative claims, each with a separate representative claimant or defendant, and combining them in the same action.”

The opt-in mechanisms, including GLOs, can be filed in both the County Court and the High Court.  A CPO application may only be filed in the CAT. 

There are no special rules that apply to class actions that broaden or narrow the scope of disclosure. Under the opt-out mechanisms, the court or tribunal would need to decide whether members of the class (who are not parties to the claim), should be required to give disclosure.  Both the High Court and the CAT have the power to make this order. 

There are no special rules on appeals for any of the opt-in mechanisms or for Representative Actions.

Under the CPO regime, appeals are only available “on a point of law arising from a decision of the Tribunal in collective proceedings – (a) as to the award of damages or other sum (other than a decision on costs or expenses), or (b) as to the grant of an injunction.” 20 CA 1998, Section 49(1A). Other decisions of the CAT can only be challenged by judicial review. On the face of it, this significantly narrows the scope for appeals but the High Court confirmed that a ruling by the CAT to refuse a CPO in an application that sought aggregate damages was a decision relating to the “award of damages” over which the Court of Appeal had jurisdiction to hear an appeal. 21 Walter Hughes Merricks CBE v MasterCard Incorporated [2018] EWCA Civ 2527.    

Although not formally tested, it is highly unlikely that an arbitration clause with a class action waiver would be upheld by an English court.

Contingency fee agreements are permissible for all group litigation mechanisms, save for opt-out CPOs where the law firm for the claimant representative is not permitted to operate on a contingency fee basis.

England operates costs shifting mechanisms whereby the losing party (either at trial or for substantive interim hearings) is ordinarily ordered to pay the majority (60%-80%) of the winning party’s legal fees. The courts have a high degree of discretion on awarding costs and there is no cap on the amount of adverse costs that can be awarded in most types of claims.

For opt-in mechanisms, the claimants are all parties to the claim and so bear direct adverse costs risk.  For GLOs, the claimants are usually severally liable for “common costs”. Common costs are the costs of the GLO issues, the administration costs of the lead solicitors and costs of claims that progress as test cases. Claimants are also liable for the individual costs incurred in progressing their own claims.

For the representative action regime, class members are not usually joined as parties to the claim, so are not ordinarily liable to pay adverse costs. However, if extraordinary circumstances render it to be “in the interests of justice”, one or more class members may be ordered to pay or contribute to costs. 22 Lloyd (Respondent) v Google LLC (Appellant) [2021] UKSC 50 at [79].  The commercial litigation funder, if any, for the unsuccessful party may also be ordered to pay the successful party’s costs to the extent of their funding commitment. 23 Lloyd (Respondent) v Google LLC (Appellant) [2021] UKSC 50 at [79].

For the CPO regime, the claimant adverse costs risk is primarily borne by the representative. However, where issues are resolved for a sub-class costs can be awarded for or against the representative for that sub-class.  Also, where individual issues are resolved costs can be awarded for or against the relevant individual(s). Finally, where class members make an application to court costs can be awarded against those persons who made the application.

The market for “after the event” (ATE) insurance – insurance against liability to pay adverse costs – is well developed in England.

Litigation funding is available for class action mechanisms in England. Most large group claims filed in England are supported by a litigation funder and the market is well developed.

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