Readers in the USA and Australia will be more than familiar with the thriving class action scenes in their home countries, and others may have read much recently about EU Member States being about to join the party via the Representative Actions Directive. Which begs the question, where does this leave the UK?
Is the UK set to get a slice of the (class) action?
The short answer is yes. In fact, we already have a large slice. A recent report identified that 48% of all class action filings across Europe between 2018-2022 were made in the UK and had a total combined value of more than £100 billion. The shape, size and subject matter of these cases, however, has evolved significantly over the last 5 years, as claimants have hit a variety of procedural roadblocks forcing them to get more creative in their pursuits.
The English Civil Procedure Rules (CPR) provide for two formal mechanisms by which collective actions can be brought. The first of these is a representative action brought under CPR 19.6, which can be brought either as an opt-in or an opt-out action. Prior to 2021, however, this mechanism was little-used due, in part, to the narrow manner in which the courts historically interpreted a key requirement, being that the representative had to demonstrate that he/she had “the same interest” as everyone else in the class. 2021 proved a turning point, when the Court of Appeal in the much talked-about Lloyd v Google case took a less restrictive approach. This was a data protection claim, and the Court of Appeal’s decision led to a flood of copycat actions being issued – and then quickly stayed pending Google’s appeal to the Supreme Court. Which, for reasons which turned partially on the “same interest” test, overruled the Court of Appeal, and led to the death of most copycat claims as well.
The second mechanism, a Group Litigation Order, is not a true class action route, but rather a means for the court to manage together large numbers of cases with “common or related issues of fact or law”. They can only be used where each and every claimant opts into the litigation, and so can be less attractive to claimant lawyers and funders alike due to the greater upfront work and investment required to build the class and prepare individual claims. However, it has its uses in the collective action landscape (particularly where “same interest” arguments are insurmountable), and has been used regularly in product liability, personal injury and post-data breach claims in recent years.
With the above-described limitations to the CPR mechanisms recognised, law-makers have, in certain instances, decided to implement statute-specific collective regimes to ensure an economically-viable means of redress is available. The most notable example of this is the Consumer Rights Act 2015, which currently provides the only true opt-out class action regime in the UK. Claims can be filed in the Competition Appeals Tribunal (“CAT”), if they are based upon a competition law complaint, by a single representative for an entire class. Again, despite its entry into force in 2015, this mechanism was relied upon relatively infrequently until it underwent its own watershed moment in late 2020. The Supreme Court handed down a decision in the case of Merricks v Mastercard which significantly lowered the threshold to be used by the CAT when assessing whether a Collective Proceedings Order (“CPO”) should be made in relation to a claim. Two major parts of this test, commonality and suitability, had, up until the Merricks decision, often proved insurmountable for many claims. The result of this was an explosion of cases being filed in the CAT during 2021-2023, a development which is showing no signs of slowing down as we near 2024.
What’s new, pussyCAT?
The glut of CAT claims filed over the last 3 years reveal some interesting, albeit not entirely surprising, trends. Perhaps most noticeable is the targeting of large technology businesses. Claims against such companies are easier to frame in antitrust terms, given the ability for claimants to highlight their size and alleged dominance. They are also attractive to claimant law firms and litigation funders, given the class sizes are often into the millions. Claimant lawyers looking for inspiration don’t need to search too hard either; class actions and settlements in other jurisdictions (most prominently the US) provide ideas for those looking for them on asserted infringements which could be actionable as a competition claim here.
On the note of alleged infringements, clearly in order to bring a CAT claim one needs to establish that a breach of competition law has occurred. Consequently, we are witnessing some admirable attempts by claimant law firms to shoehorn complaints, which might more naturally be framed as an infringement of, for example privacy or consumer protection law, into the guise of a competition infringement. If they succeed in doing so, they can unlock all the advantages of an opt-out class action regime without the same obstacles regarding “same interest” which they would likely face in the High Court. A recent example of this was the (to-date unsuccessful) claim issued by Liza Lovdahl Gormsen against Meta, a claim whose natural home would be before a data protection judge, but which was framed as an allegation of abuse of a dominant position.
Another trend is the move away from CAT claims being “follow-on” actions (i.e. where the competition infringement in question is already the subject of a decision handed down by the CMA) towards “standalone” actions instead. This pattern is partially a by-product of the previous trend noted; where complaints are increasingly shoehorned into competition law by creative claimant lawyers, it is of course to be expected that the number of standalone claims will increase – it is unlikely that, prior to the formation of the lawsuit, anyone (including the CMA) would have considered the complaint at issue to raise antitrust issues.
A final notable development is the increase in the size of classes represented. In 2022 alone, the 15 new actions filed in the CAT claimed to represent, in aggregate, 169 million people. As litigation funders in the UK become increasingly focussed on the CAT as the main class action battlefield, this of course is very likely to continue – those embarking on litigation with financial goals in mind will be seeking to identify cases where the damages pot will be at its biggest.