Group Litigation

By Jamie Johnson Group litigation is a collective lawsuit brought by a class of claimants. It is also referred to as class action. These claimants will share at least one characteristic.

A class is defined as a group of people who have the same interest. It must be discernible who belongs to the class of people and who does not, although the list of people who belong to the class could change over time. There is no cap on how large this group can be.

What are the types of group litigation open to a claimant?

A claimant could bring a consolidated claim, make a group litigation order or make a representative action.

A claim can bring a consolidated form to a court because the court has exercised case management powers to make it so. The court would do this because it is more straightforward from their perspective to deal with all the claims at once.

Claimants could also make a group litigation order. This is where several claims are brought where multiple claimants have the same reason for their claim against the defendant.

There are representative actions where a representative of a group brings forward a claim. Here, if multiple law firms are representing the group, a lead solicitor is appointed for dealing with the case.

How does a group litigation claim work?

There are five stages to note: the appointment of a judge, the registration of the group, the statements of case, the early disposal of claims and disclosure.

At the very start of a case, the group will decide which court should manage the claims. A judge will be appointed to oversee the case management. There could also be a master or district judge to deal with procedural disputes and a cost judge to deliberate over cost disputes.

The groups will register in order to become a party for the claim. At this stage, each claimant will generally provide the relevant information for their specific claim. There could be a cut-off date here, after which point no more claimants can be added.

In the statements of case, the management court decides which group claims should be filed. This may require additional information about the specific nature of the dispute and a questionnaire might be issued at this juncture. The defendant will then typically plead a defence.

The court could then make a summary judgment to deal with claims quickly if there is no prospect for the claim to be made or defended. This is quite a rare move, though, as there is a high bar for making a summary judgment.

Disclosure is then carried out where evidence is provided for the case. Usually the defendant has a more significant burden of disclosure because the group litigation claim will be typically made based on something that the defendant did or neglected to do. The burden of disclosure and evidence required will, of course, depend on the particulars of the case. Witness evidence may be required at this point. Disclosure may be ordered before the action takes place if the court believes that it is necessary.

After these stages, the court will make a judgment in the usual manner.

Alternatively, a defendant could just settle the case out of court. This would involve creating a contract for the settlement, as with standard settlement procedures.

How long does a case take?

Usually, a case will take between two and three years. Of course, this ultimately depends on the amount of information that the court has to process and any other complications that may occur. A party could make an application for an acceleration of the case in some specific circumstances.

Why would a claimant bring forward a group litigation claim?

There are three main reasons why a claimant would bring forward a group litigation claim: legal support can be shared, the risks are reduced and it is cheaper than bringing individual claims.

Legal support can be shared amongst the group because legal advice would extend to multiple members within that group. This means that instead of each member having to find out the best grounds for making their claim, the advice can be shared.

The risks are also reduced because the potential costs of losing the litigation claim are lower. If a party loses a litigation case, they have to pay the other side’s legal fees. In this case, there are more people to share that cost.

Finally, the costs are reduced. This is primarily because the costs of going to court are shared but also because there are cost savings from having one court proceeding instead of multiple.

On what basis would group litigation be brought?

Group litigation could be brought for all sorts of reasons. The five most popular reasons for bringing a claim are: personal injury, product liability, environmental disputes, pension disputes and consumer redress.

How is group litigation typically paid for?

Lawyers are paid for by using conditional fee arrangements (CFAs) or damages-based agreements (DBAs).

A CFA is where there are success fees added to any basic costs.

A DBA is where a lawyer is not paid at all if the case is unsuccessful. If the claimant wins, the lawyer is given a fraction of the damages that were given.

Case studies

The UK Supreme Court is currently hearing a collective litigation case against Mastercard. Mastercard faces charges of overcharging 46 million consumers and may have to pay £14 billion. There is a significant amount of dispute between the parties over whether the case is suitable for a class action at all.

In 2016, a court in New Orleans approved a settlement on a class action case brought for the Deepwater Horizon oil spill scandal. BP had to pay $20 billion to deal with the claims brought against it.

In 2016, a San Francisco judge approved a $14.7 billion settlement on a class action case brought against Volkswagen. This case was brought because of Volkswagen’s attempts to cheat on its emission tests. This settlement gave monetary payments to 475,000 people.