Class Actions and Collective redress

Written by Lucy Dyson

Key developments in 2024

The UK group litigation/ class action landscape continues to expand, particularly in an environmental and consumer context.  Whilst we still have no US-style "opt-out" class action regime for civil claims (opt-out class actions are only viable in respect of competition law infringements), the available mechanisms for seeking redress on behalf of multiple claimants, continue to be tested.

 To re-cap, in England & Wales, there are essentially four mechanisms for bringing "group claims", the suitability of which depends on the legal issues, the volume of claimants and amount (and type) of damages at stake.  These include: 1) group litigation orders (GLOs) where claimants must "opt-in" and be listed on the claim form; 2) groups of individual claims managed together (as in Mariana-v-BHP); 3) representative actions where claimants and/or defendants have the "same interest in a claim"; and 4) opt-in and opt-out collective actions for infringement of competition law.

GLOs continue to be the main legal mechanism for civil group claims in England & Wales, whereby claims are managed together provided claimants can satisfy the "common or related issues of fact or law" threshold.  In recent years, claims have been brought in relation to the Post Office Horizon scandal, the contaminated blood products scandal, the metal on hips litigation and the VW Nox Emissions Group Litigation.  In December 2024, the Court of Appeal in Alame and others -v- Shell¹ provided useful guidance on how claims involving multiple claimants should be managed.  The claimants seek damages allegedly arising from multiple and repeated pollution events and although Shell argued that they should be managed as "global claims" when assessing causation (i.e. an all or nothing approach that the claims seek one amount which pertains to multiple alleged causes of loss).  The court rejected this premise and held that the claims should be assessed by reference to "lead cases".  The court further reiterated the importance of access to justice and not placing an overly onerous burden on the claimants in terms of evidence.

However, an ongoing challenge to bringing GLOs is the "opt-in" requirement which is onerous (as opposed to automatically belonging to a certified class) and requires the establishment of a claimant register.  This might explain why only 194 GLOs have been made since 2000 (averaging five per year).  So what is the best mechanism for mass claims?

On the face of it, a representative action under CPR 19.6 appears akin to a class action, given it permits an individual or entity to bring an action on behalf of others with the same interest, without establishing a claimant register.  However, in practice, establishing common legal and factual issues amongst the group of claimants, has proven difficult.  There have been various examples of consumer and environmental claims being dismissed for lack of commonality, complexity of individual circumstances and inadequate representation of the proposed group of claimants.  Indeed, in Lloyd-v-Google, the Supreme Court confirmed that the circumstances in which representative claims will be allowed to proceed, are narrow (in this instance the claim failed because individual damages under the DPA 1998 would not have been evidenced by reference to wrongful use of data). In Jalla-v-Shell², claims concerning an oil spill in Nigeria was held not to meet the same interest test, given each claimant's circumstances were potentially different, including causation and the types of loss or damage allegedly caused. 

In January 2024, the Court of Appeal unanimously upheld the High Court's approval to allow a representative action to proceed in Commission Recovery Ltd v Marks & Clerk LLP & Long Acre Renewals (A firm)³.  The claim concerned 'secret-commission' arrangements related to IP services and was the first litigation funded claim filed pursuant to CPR19.8 that has been allowed to proceed.  Unfortunately, although trial was listed for January 2025, the claim settled at the end of 2024.  We will therefore have to wait for more guidance on the scope of representative actions, including whether damages can be awarded to all class members or if claimants would have to bring individual claims for quantum purposes.

Data protection group claims continue dominate the group litigation stage.  In 2024, it was announced that online dating platform, Grindr, are facing a group action (totalling 15,000+ claimants) on behalf of platform users who allege their data was used in breach of data protection laws and sold to third parties without consent, including sensitive data such as HIV status.  It will be interesting to see if this action proceeds as a representative action or a GLO.

 In the context of mass claims, 2024 also saw the commencement of the much anticipated "mega trial" in Municipio de Mariana -v- BHP concerning the Fundão dam collapse in Brazil in 2015, which is due to conclude in early 2025.  The case is being heard as a group of individual claims (notwithstanding over 700,000 claimants seek damages in excess of £36bn). The claim was brought as a collection of individual claims (individuals and companies) and is being litigated before the English courts. This was despite a USD31bn settlement being negotiated between BHP and co-defendant, Vale, with the Brazilian government in order to compensate communities and remediate the damage caused to the local environment.  It stands out on its own due to sheer size and for also bringing issues arising from another jurisdiction against an UK parent company.

Collective actions for infringement of competition law (introduced in 2015) remain the only true "opt out" route for class actions.  Claims concerning consumer rights, environmental breaches and data protection are becoming more prevalent.  December 2024 saw a £2.1bn class action being issued on an 'opt-out' basis against Microsoft in the CAT alleging Microsoft overcharged UK businesses who used rival cloud computing services for its Windows Server software.  We also saw the settlement of the long-running Merricks-v-Mastercard opt-out collective action brought in respect of allegedly excessive transactional fees charged to consumers.  It has been reported that the litigation funder who backed the case intends to challenge the settlement as premature, given £17bn was originally sought in compensation and the case is rumoured to have settled for in the region of USD200m. It will be interesting to see how this develops. 

What to look out for in 2025

We await the outcome of the Mariana-v-BHP case and whether the trial will proceed to conclusion.  This case has certainly paved the way for mass litigation in the toxic tort context.  The long-awaited Pan-NOx Dieselgate GLO is also due to go to trial in October 2025.  

We also await the outcome of the FCA's investigation into motor finance commission arrangements.  It has been speculated that this will result in a consumer redress scheme similar to those devised for PPI claims.  

Last year we commented on the Supreme Court's decision in PACCAR , which held that Litigation Funding Agreements (LFAs) are Damages-Based Agreements, and consequently unenforceable unless they comply with the DBA Regulations 2023.  Unfortunately, there is no further clarity on the position regarding funding arrangements in the wake of PACCAR (and the Litigation Funding Agreements (Enforceability) Bill 2024 will now not be pursued).  The CJC's Litigation Funding Review is due in November 2025 will provide much needed guidance on the regulation of funding arrangements and their status as DBAs.    

¹ [2024] EWCA Civ 1500

² [2020] EWHC 2211 (TCC)

³ [2024] EWCA Civ 9

⁴ R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28

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