#3661 - Multi Party Litigation - Civil Procedure

ESSAY PLAN 1 – Multi-Party Group Litigation

Intro

English multi-party litigation can take one of three forms:

(1) Representative proceedings – CPR 19, S II;

(2) Group Litigation Orders (CPR 19, S III); or

(3) consolidated litigation – joinder of co-claimants e.g. Weir (no 1): group of C’s formed an action committee which brought a single action for 50,000 co-claimant shareholders who were each full parties to the proceedings; is opt-in.

Lord Woolf (1996) identified 3 fundamental objectives that the multi-party litigation regime ought to achieve: 1) access to justice; 2) expeditious, effective and proportionate; 3) balance beween C’s and D’s

Andrews shortly after CPR Pt 19 came into effect – “the custodians of English civil justice have not formally created a mechanism for assessing the success of group litigation”.

Pro GLO (opt-in)

Characterised by high levels of case management at all stages of the proceedings

Opt-in system but no limit to the number of parties who might register their names in GLO

Mainstay of multi-party litigation, though it is possible that relaxation of rep proceedings so as to accommodate some pecuniary claims, might cause GLOs to become less important during the next decade.

Turner (response to 2011 European questionnaire) – shortest set of rules in civil litigation code...imaginative thinking.

Six main components:

1) court must approve a GLO

2) Opt in

3) group member enjoys both membership of the group and general status as fully-fledged party to civil proceedings

4) the court exercises extensive case management and issue directions including (19.13): providing for 1 or more claims on the group register to proceed as test claims; appointing a solicitor to be the lead solicitor; specifying the details to be included in a statement of case; specifying a date after which no more claim can be added to the group register unless court permits.

5) if group loses the case, each group member is liable to the victorious party both for that member’s share of the common costs of the proceedings and for any individual cots specifically incurred with respect to his claim; but if the group wins, the defeated party is liable to pay costs attributable to both the common costs and the individual costs

6) decisions on common issues are binding on and in favour of the group. Thereafter has to show suffered personal loss.

Versatile and wide-ranging- no restriction on the subject matter; all forms of civil wrongdoing and dishonest misconduct can form the basis of common issues; all necessary to show is that there are common or related issues of fact or law.

The group litigation order system has been used extensively to enable various types of claims for pure financial loss to be brought against major companies. Procedure can accommodate allegations of fraudulent dealing or misrepresentation, breach of contract, breach of trust, breach of fiduciary duty and violations of securities law.

Tew (2010) – Mann J: upheld decision to authorise a GLO concerning alleged unfairness in the provision of a certain type of mortgage. Shows that the GLO system can flexibly accommodate different categories of C and claims arising from the same or related set of facts, and the case also shows that different D’s can also be validly party to a GLO procedure. Mann J’s comments show the court’s determination to ensure the procedure is used speedily, effectively, with proper focus, and appropriately: “advantages in automatically binding all participants in relation to the genuinely common issues, and provides a useful umbrella for controlling other claims by means of stays. There may be advantages in dealing with costs too”.

Wide range of GLO’s:

Sayers – claims for personal injury arising from pharmaceutical drugs

Boake Allen – corporation tax allegedly overpaid to UK Revenue

Autologic – loss of group tax relief. Lord Nicholls: “six groups of companies have been selected as test cases. They represent a large number of C companies”.

Turner (2008) – GLOs have settled/decided in half or a 1/3 of the time normal litigation might have taken = speedy.

Andrews – highlights positives of C having a choice to enter into litigation or not e.g. liberty.

Allows the D to know the size of the pool of potential C’s BUT this is doubted by Mulheron (2005a) – if miss cut off date- D doesn't know how many individual claims he may face.

Benefits of GLOs doubted in terms of quickness and choice doubted! – can be just as bad if not worse that reps e.g. Mulheron (2007) uses the case of Owen v MoD – GLO claim: he didn’t have a CHOICE to be the lead case or not. He couldn’t detach himself; his delay was delayed for many years by creation of group action.

Anti GLO (opt-in)

Funding is a major issue – public funding for group litigation is seldom funded.

Hodges (2006) – “the funding of large cases remains complex and controversial. The size of the funding required and the loser pays rule require sophisticated arrangements to be put in place in order both to fund ongoing costs and to cover the risk of losing... the previous freedom with which Legal Aid was dispensed has disappeared.”

Mulheron (2008) – been relatively few (only 63 by then) GLO orders since introduction in 2000. This figure is low compared with other common law jurisdictions such as Canada, USA and Australia offering opt-out systems. Disconcerting for access to justice. Rise of opt out class action in Norway, Denmark, Netherlands, Portugal Spain and Italy.

Andrews – the figures are not surprising because won’t be fought unless substantial public support or funding. Conditional fee system has not worked in this context – absence of After The Event legal expenses insurance to cover C’s risk of liability for the D’s costs.

Mulheron (2008) - Sharp decline in legal aid funding to only 4 in 2006/7 from 133 in 2000.

Mulheron (2005a, 2008): why people won’t opt in:

• Economic anxiety

• Substantially liable for costs

• Psychological considerations

• Fear of reprisals

• Basic misunderstanding of system

Mulheron (2008) – possibly less than 30% of potential class may choose to opt in,.

Sorabji – doesn't given access to justice where the size of the individual claim is small – barrier of entry for individual claim so high that individual claim not brought e.g. the JJB sports football shirt overcharge case – made 50m but only 1,300 opted in. BUT questions whether GLO ever intended to deal or benefit small claims – are they worthy?

Mulheron (2005a) – opt in approach “is less than satisfactory, is wasteful of litigants’ resources, and is beset with problems” – demonstrated by Taylor – C commenced proceedings in relation to alleged sexual abuse; same issue was covered by GLO; C wished to join GLO, but missed cut off date for joining two years previously and held to be out of time. Initially the D’s plea was upheld (struck out) but CoA gratefully reversed – shows issues of opting in.

= issues of advertising/knowledge etc

“D may escape full consequences of its conduct simply because a number of putative class members do not opt in”

Issues of front loading; whereas in rep proceedings a positive step may well need to occur at some point under an opt out regime but that step will usually be deferred until either settlement or judgm,ent has been approved or delivered.

Rep

Mulheron (2007) - The absence of a fully-fledged opt out class action remains a “yawning gap”.

Rep C’s brings an action on behalf of himself and others; he is the only C. Members of that represented class are not parties to the action but will receive benefits of a res judicata decision.

Opt out system

Hodges (2007, 2010) – uncommon in England

CPR 19.6

BENEFIT OF REP ONE - Utility as a means of obtaining declaratory relief e.g. Abbey National – in the bank charges litigation, the CoA declared that charges for unauthorised overdrafts on current bank accounts are subject to the Unfair Terms in Consumer Contracts Regulations (1999); this case shows how declaratory relief obtained on behalf of a very large community of interested persons can become the foundation of individual redress or adjustment rights.

Efficient means of gaining closure of a dispute affecting a host of persons.

Equitable Life – D life insurance company sponsored a representative action. Ultimately HoL issued a declaration in this action establishing the true interpretation of a clause in the D’s company life assurance policy. 90, 000 policy holder bound by this decision.

Oxford Union v Webb – Irwin J: representative mechanism can also be used for effective injunctive relief against a disruptive unincorporated association like a protest group.

Distinctly marginal in England though

PROBLEM ONE: courts’ narrow interpretation of the notion of a common interest (same interest).

It is very rare for English representative proceedings to culminate in a damages award in favour of the represented class.

Sorabji (2009) – contrast with US: four conditions that need to be satisfied; (1) numerosity, (2) commonality, (3) typicality and (4) represented parties fairly and adequately protected

Seymour – the test has proven unhelpful and obfuscating; rep rule has not been successful and over limited utility....

Markt – English stumbling block is the courts’ narrow and literal interpretation of the statutory phrase in CPR 19.6(1) of “where more than one person has the same interest in a claim”. The court in this case held that it is not enough that the suggested class of C’s is suing in respect of the same cause of action e.g. contract/tort of negligence; nor that their claims raise strikingly similar factual...