Class formation

Standing

What are the standing requirements for a class action?

Group litigation orders and representative claims

The usual route for bringing legal action applies to claims subject to a group litigation order (GLO) or representative claims. The claimant must therefore show that it has a cause of action.

To be added to the register of claims for a specific GLO, an issued claim must give rise to the ‘common or related issues of fact and law’ specific to that GLO. New claimants must issue a claim form before their claim can be entered on the group register.

The test for a claim to proceed by a representative party is that those represented must have the ‘same interest’ in a claim. The court may add a person as a claimant in proceedings either on its own initiative or following an application, which must be accompanied by evidence. Any order must be served on all parties and anyone else affected.

Competition Act 1998

A representative may be a claimant (an individual or a business that has suffered loss) or a representative body, for example, a trade association. A collective proceedings order (CPO) must include authorisations for the person bringing the proceedings to act as a representative, a description of the class of persons, and whether the proceedings will be opt-in or opt-out (section 47B(7) of the Competition Act 1998 (the Act)).

Rule 78 of the Competition Appeal Tribunal (CAT) Rules of Procedure (the CAT Rules) provides a list of the relevant factors for authorising a class representative. Those factors include whether the representative would ‘fairly and adequately act in the interests of the class members’, whether the representative has a ‘material interest that is in conflict with the interests of the class members’, whether the representative would be able ‘to pay the defendant’s recoverable costs if ordered to do so’ and, if the proposed representative is not a class member, whether it is a pre-existing body. Paragraph 6.30 of the CAT's Guide to Proceedings (the CAT Guide) provides further practical guidance and suggests that the CAT will consider whether the proposed class representative is competent to manage what is likely to be a large and complex piece of litigation.

Participation

Do members of a class have to opt in or opt out of the action? Are class members notified that an action has been commenced on their behalf and, if so, how?

Group litigation orders

For a claimant to have its claim managed under a potential or existing GLO, it needs to first issue its own claim form for its individual claim. Therefore, GLOs provide an opt-in regime as each individual claimant must consciously take steps to bring a claim to court and individuals will be bound only if they choose to be.

The court can also direct particular claims to be managed under a GLO using its discretionary powers. However, if a party disagrees, it can make an application for these claims to be removed.

Representative claims

It is not necessary for those represented to be named as parties to the proceedings, nor is it necessary for the representative party to have the authority of those it represents to act as their representative.

Competition Act 1998

Since 2015, the CAT has the power to state whether any collective proceedings will be opt-in or opt-out (section 47B(7)(c) of the Act). To determine this, the CAT will consider the strength of the claims and whether it is practical for the proceedings to be opt-in, including the estimated amount of damages that individual class members may recover. The class representative must give notice of the CPO to class members in a form and manner approved by the CAT (CAT Rules, Rule 81). The notice must set out in straightforward terms how class members opt in or opt out of proceedings (CAT Guide, paragraph 6.59).

The CPO will specify a time by which class members must opt in or opt out of the collective proceedings. After that date, the permission of the CAT will be required (CAT Rules, Rule 82). The class representative must maintain a register of class members who have opted in or out of the proceedings and this must be available on request to the CAT, any defendant and such other person as the CAT may direct (CAT Rules, Rule 83).

Certification requirements

What are the requirements for a case to be filed as a class action?

Group litigation orders

There is no minimum number of claims or persons required for a GLO to be made.

Before joining the register for the GLO, individual claimants must issue their own claim form. The court may give directions about the form of pleadings for claims covered by the GLO. For example, the court may direct that the claimants serve group particulars of claim. The group particulars of claim is in addition to the individual claim forms, and must include information setting out the claims of all of the claimants on the register for that GLO. Group particulars of claim will usually contain general allegations relating to all of the claims and a schedule specifying which of the general allegations are relied on by, and any specific facts relevant to, each claimant.

Often, the specific facts relating to each claimant on the group register will be obtained using a questionnaire that has been approved by the court managing the GLO.

Representative claims

There is a minimum number of two claimants for a representative action. For a claim to proceed as a representative claim, the persons to be represented must have the same interest in the claim and the representative only needs to note on the claim form that they are acting as representative.

Competition Act 1998

There is no minimum number of class members for collective proceedings in the CAT, but the class must be identifiable. Collective proceedings may be brought by combining two or more claims (section 47B of the Act). Collective proceedings may be commenced by a person who proposes to be a representative, but may only be continued if the CAT makes a CPO (section 47B(4) of the Act).

There is no requirement that all of the claims should be against all of the defendants in collective proceedings (section 47B(3)(b) of the Act).

The proposed class representative must send a collective proceedings claim form to the CAT’s registrar containing specified information (CAT Rules, Rule 75(1)), including (among other matters) whether the application relates to a proposed opt-in or opt-out procedure, a description of the proposed class, its estimated size and any possible subclass, and a summary of the basis on which the representative seeks to be authorised.

How does a court determine whether the case qualifies for a class action?

Group litigation orders

The court will usually deal with any application for a GLO at an oral hearing and may exercise its discretion as to whether to order a GLO or to add a particular claim to an existing GLO.

Whether the court allows a GLO on its own initiative or following an application, it may not be made without the consent of the relevant head of the particular court division in which it would be made (the President of the Queen’s Bench Division in the case of claims proceeding in the Queen’s Bench Division or the Chancellor of the High Court in the case of claims proceeding in the Chancery Division). To obtain this consent, the judge considering a GLO must, either before or after hearing the application, provide the relevant documentation, together with a written statement as to why a GLO is desirable.

Representative claims

Pursuant to the Civil Procedure Rules (CPR) 19.7, there are certain categories of claims for which the court’s permission is expressly required, including where the claim concerns the estate of a deceased person, property subject to trust, or the meaning of a document, and the people whom the representative is to represent have not been born, cannot be found or cannot easily be ascertained. Other than these, a party can commence a representative claim without the permission of the court by indicating on the claim form that it is acting as a representative.

However, the court can intervene and reject the person acting as a representative, either at its own discretion or following an application from another party. The test to be satisfied for a claim to proceed by a representative party is that the parties to be represented must have the same interest in the claim. In general terms the test is strict and is considered more difficult to satisfy than that for a GLO.

Competition Act 1998

The CAT may make a CPO if it considers the proposed class representative is capable of acting in that capacity. The representative does not need to be a class member, but the CAT must conclude that it is ‘just and reasonable’. It must also consider that the claims raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings (section 47B(5) of the Act; CAT Rules, Rule 77).

The CAT will also determine whether the collective proceedings should be opt-in or opt-out. In doing so, it will assess, among other things, the ‘strength of the claims’ (CAT Rules, Rule 79(3)(a)). However, this does not amount to a full ‘merits assessment’ (CAT Guide, paragraph 6.39).

The decision on whether to make a CPO will ordinarily be made after an oral hearing. The CAT rejected the MasterCard CPO application on the basis of insufficient quantification of consumer losses. In the MasterCard case, the CAT followed its own decision in Pride in endorsing the test for whether the class representative had proposed an appropriate method for the calculation of damages.

Consolidation

Is there a process for consolidating multiple class action filings?

Group litigation orders

A list of all GLOs is maintained and published by the court.

Individual GLOs may expressly provide for how they are to be publicised and often state a ‘cut-off date’ before which claims proceeding under the GLO should be made (failing which they are likely to be stayed).

Once a GLO has been made, a group register is established on which details are recorded of the cases that are to be subject to the GLO, and any judgment on one GLO issue will be binding in relation to all other claims on the group register, unless otherwise ordered by the court. The court may direct that, from a specified date, all new claims that also raise any of the GLO issues already in consideration must be started in that same court. However, the relevant practice direction expressly provides that if a claim starts in the wrong court it will not be automatically terminated, but instead should be transferred to the correct court.

The courts also have general powers under CPR 3.1 to consolidate proceedings or to try multiple claims together.

Competition Act 1998

There is no formal record of claims in the CAT.