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Group litigation is big news these days, with eye-watering sums being claimed in some cases. The Mastercard litigation is the single biggest claim ever in the UK with a claim of about £15bn for about 46 million consumers.

But are the courts properly equipped to deal with such claims? How well is the group litigation system working and what changes might make it better? These questions were addressed by a panel with lots of experience: Valerie Kenyon, partner at Hogan Lovells, Matthew Cook KC, David Cavender KC, and David Haughan of funders Woodsford.

One clear theme emerged from the discussion: the contrast between the system which operates for competition claims and that for other group litigation. (They were described by one participant as respectively Rolls-Royce and donkey systems). This seems to be reflected in take-up. Since they were introduced in 2000 no more than 112 group litigation orders (GLOs) have been made – a strikingly low number. Compare that with the competition regime (introduced in 2015, but only really getting going since 2021) where about 40 collective proceedings orders (CPOs) have been granted or are in the pipeline.

Why the low take-up?

The panel identified a number of factors which might make the GLO system unattractive. One problem is that opt-out is not available for general group litigation (unlike the position in competition claims). This can result in rival groups engaging in the expensive and time-consuming exercise of bookbuilding. They may do this on a different basis, with one firm of solicitors bookbuilding on a CFA basis and another on a DBA basis. This uncertainty is unattractive for a funder and deeply puzzling for the consumers – hundreds of thousands may have signed up on one basis, only to discover that the claim is not proceeding in that form.

Another perceived problem area was the issue of judicial expertise (or rather, lack of it). In the case of GLOs, the application is made before a Master, who will have extensive experience in procedural issues, but the matters to be dealt with are not purely procedural. High Court judges too might lack experience in group litigation. 

Where to now?

It was by no means all doom and gloom. The general view was that there were merits to the present system and it remains attractive to litigants and funders. (The finality of litigation was mentioned, in comparison to some jurisdictions where claims could be before the courts for many years, with multiple appeals.) However, there is room for improvement and the panel floated a number of possible changes.

There is an obvious question why we have two systems operating differently side-by-side. A big issue here is opt-in versus opt-out. Why should opt-out claims be available in competition claims but not in general group litigation claims? (Very successful opt-out systems for consumer already operate in other jurisdictions.)

Group litigation should be dealt with by a High Court judge and more training is needed for judges working in this area. (It was also noted that the CAT procedure, which involves a panel of 3, means that the two who sit alongside the judge build experience.) There could be a group litigation list, like the Financial List. Having such a specialist list would send a message to litigants and funders that the Courts in England and Wales are equipped to deal with such claims. (Claims of this kind often have competing possible jurisdictions and some other countries are not being slow to develop procedures to attract such litigation.)

Finally, another issue favoured by some participants was a two-stage procedure, which would involve dealing with the defendant’s liability at an early stage. Other issues, in particular the merits of particular individual claims could be dealt with at a second stage.

Conclusion

Litigants (and funders) in massive group actions have options. If the courts of England and Wales are to continue to compete in this market-place, changes will need to be made. For all litigants the system needs to be Rolls-Royce, not donkey.