Scottish Parliament brings forward Bill to introduce new “group proceedings” procedure in Scotland
The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill (the ‘Bill’) is currently making its way through the Scottish Parliament. If enacted, the Bill will bring into force a number of proposals made in Lord Gill’s 2009 review of the Scottish Civil Courts, including the introduction of “group proceedings”.
If the Bill is passed, there will be a formal procedure for ‘class actions’ for the first time in Scotland. These will be known as “group proceedings” and will allow a representative case to be heard, the decision of which will be binding on a number of claims. At present, there is no facility for class actions in Scotland.
While the courts have some powers to make ‘directions’ to allow cases with the same facts to proceed in a specific manner, the usual approach is to sist (freeze) related cases while one proceeds. Alternatively, courts have had to decide on the best approach on a case by case basis. Both approaches can create problems in practice, for example identification of an appropriate ‘test case’ and the fact that parties need to decide whether to settle on the basis of the first decision or to proceed in light of the precedent that may be created.
The ad hoc nature and potential for duplicated costs has limited the number of these types of actions. By introducing a formal procedure for group proceedings, the Bill has the potential to open up the courts to claims which currently would not be considered to be financially viable. It is expected that claims companies and consumer rights organisations will be looking carefully at how this develops and it is anticipated that the volume of ‘bulk’ litigation will increase.
If the Bill is passed, the details of how group proceedings will work in Scotland will be set out in new court rules to be developed by the Scottish Civil Justice Council. However, the Bill sets out the framework within which these rules will operate.
Group proceedings will only be available in the Court of Session, Scotland’s highest civil court, and the court’s permission will be required to apply the procedure (as is currently required if directions are sought). While the Bill provides that for permission to be granted, the claims will have to raise issues that are “the same as, or similar or related to, each other”, it may be that the court will also limit the types of claim that can be raised as group proceedings.
While one individual or organisation will be able to raise a claim on behalf of a group, the system envisaged is an ‘opt-in’ procedure under which individuals will still be free to keep their claims separate from the group proceedings. The decision on liability will be binding on all those that have opted in, but quantum will be determined on an individual basis. In a group personal injury claim for example, while the representative case may decide that the defender is liable, unless settlement can be reached, the court will still need to decide on damages for each individual claim.
It will be some time before we see the group proceedings procedure in action in Scotland but, once it comes into force, the Bill will allow actions to proceed which previously would have been prohibitively expensive.
The Bill therefore has the potential to significantly shift the balance of power between individual pursuers and large defenders. If the Bill is passed, the next step will be the introduction of new court rules which will flesh out the details of when and how the new procedure can be used. At that stage, we will have a clearer idea of what impact the introduction of group proceedings will have on civil litigation in Scotland and the knock on impact in areas such as litigation funding.