A Group Litigation Order (or GLO) is a procedural tool allowing the court to manage a number of separate claims which give rise to "common or related issues of fact or law". These issues are referred to as the "GLO issues" and must be set out in the GLO. A recent High Court judgment in Tew and others v BoS (Shared Appreciation Mortgages) No 1 plc and others [2010] EWHC 203 (Ch) gives helpful guidance as to how GLO issues should be formulated and illustrates the potential difficulties in bringing group litigation where cases raise individual issues.

The facts

In this case the claimants brought actions against two banks challenging the fairness of their shared appreciation mortgages under relevant consumer protection legislation. The difficulty for the claimants was that, as the judge held, the relevant legislation required the court to conduct a wide-ranging factual inquiry, including matters relating to the qualities and circumstances of the debtor, in determining whether the terms were unfair.

The claimants sought to obtain a GLO on the basis that the court could determine unfairness without any consideration of individual circumstances, simply by looking at the terms, their potential effect and their actual effect in monetary terms. Essentially the claimants' argument was that the banks' returns on these products were so large that the terms could not possibly have been fair no matter how sophisticated or well-informed individual claimants might, in practical terms, have been. Alternatively, the claimants invited the court to reach a prima facie conclusion on unfairness based on common circumstances, and then go on to consider whether that might be displaced by individual circumstances in individual cases - either by giving guidance in the abstract as to the sort of factors that would tip the balance against individual claimants and make a particular transaction fair, or alternatively by going on to consider the actual facts of individual cases to determine whether those facts tipped the balance.

The claimants also argued on "access to justice" grounds. The claimants were all individuals, none were really wealthy, and none had the funds, or outstanding mortgage liabilities, which would sensibly justify bringing individual claims. They therefore needed the court to deal with the cases in a single trial, or a small number of trials, on a group basis. It was suggested that some or all of the claims would not (or might not) be pursued if the court insisted on examining all of the individual issues.

The judgment

The judge rejected the claimants' approach in strong terms, saying that it would be "quite wrong" to allow the GLO issues to be phrased in such a way as involved a shutting out of individual circumstances from the scope of the litigation. That would amount to a form of pre-judgment of some issues. He commented, "I must form a view of the extent to which any given issue will arise. It does not cease to arise merely because the claimants would like to run the case without it."

He also rejected the notion that the claimants' suggested way of deciding the case could take effect as a case management approach, saying that this was not a sensible or practical method of trying the cases. The claimants' approach effectively required the court to test the case against the hypothetical customer, or to consider in the abstract what might make a transaction fair or unfair. The judge commented that it was "highly undesirable" to approach the factual issues in this hypothetical way "especially when one has got real facts, involving real people and real transactions, who can be used to test the transaction instead".

As for the access to justice point, the judge noted that it would be a matter of concern if group litigation were to be conducted in such a manner that the claimants could not fund the litigation. He recognised that the court must take into account the more limited resources of one side, but said it would not allow one set of parties to dictate the shape of the litigation on the basis that they would refuse to pursue the claim on any other basis. He said that this risked "presenting moral blackmail issues which the court will resist".

Despite his criticisms of the claimants' suggested approach, the judge allowed the case to go forward under a GLO subject to settling the terms of the GLO issues appropriately. The judgment envisages that the fairness issues would be determined by taking lead or test cases within the GLO procedure: although any actual findings of unfairness in those cases would not bind other litigants, they would doubtless provide guidance for the disposition of other cases.


This case illustrates that the GLO procedure, which is designed to manage and resolve claims on a group basis, cannot be used to avoid the need to deal properly with any individual issues that arise in the particular type of claim. The court refused to allow the claimants to define the GLO issues in such a way as to shut out consideration of individual circumstances, where these were fundamental to the questions the court needed to decide in order to determine the claims.

The past year has seen significant steps toward the introduction of a new collective action procedure in England and Wales, which would be available in addition to the GLO regime - see our e-bulletin dated 27 November 2009 on the government's proposals for collective actions in the financial services sector and our e-bulletin dated 22 February 2010 on the proposed draft court rules for collective actions. The new procedure would allow claims to be brought by way of collective proceedings, subject to the court's discretion, where they raise "the same, similar or related issues of fact or law". The court would also have a wide discretion to determine whether claims would be brought on an opt-in or opt-out basis.

If the new procedure is introduced it will be interesting to see the court's approach to claims which, like the present case, necessarily require consideration of individual circumstances. The present case suggests that the courts will not allow procedure to dictate over substance, and so will not allow claimants to shoehorn their claims into the collective action procedure in order to avoid consideration of individual matters that necessarily arise. It should be noted that the proposed draft rules for collective actions recognise the possibility that issues relating only to a particular sub-class, or even an individual case, will need to be determined separately.

Of course, if the proposals to allow aggregate damages are implemented (which would allow the court, in appropriate cases, to assess the damage suffered by the class overall without requiring proof of loss by each individual claimant) this could avoid the need to consider individual variations in the quantum of the claimants' losses. However, individual variations that are relevant to liability (such as those in the Tew case above) would still need to be addressed.