In the twenty first century, everything is “bigger”. There are more people, with more rights and interests, more disputes, and consequentially more pressure on the civil justice system to find ways to resolve those disputes, swiftly, efficiently and at proportionate costs. A key tool in the locker is the scope to use “class actions” to resolve disputes which may involve many thousands of litigants, who would otherwise face barriers of knowledge and costs, which might prohibit them from bringing individual claims.
One type of “class action” is the representative action which has undergone significant evolution, culminating in the modern rules encapsulated in CPR 19.8. These rules provide potentially an important procedural mechanism for resolving mass claims efficiently by allowing one or more individuals to represent a broader class with the “same interest” in the litigation. Representative actions have deep historical roots in the ancient practice of the Court of Chancery and have been refined by both legislative changes and judicial interpretation. However, in recent years, there has been an issue over whether representative actions remain a viable alternative or complementary concept, to Group Litigation Orders (GLOs) or whether they are now largely redundant due to the proliferation of other procedural tools.
The purpose of this article is to consider the development of representative actions, particularly through recent cases such as Lloyd v Google LLC and before that seminal decision of the Supreme Court, the decision in the Court of Appeal in Jalla v Shell International Trading and Shipping Co Ltd, and assess whether representative actions provide a practical alternative to GLOs. I will examine the principles that govern representative actions under CPR 19.8, look at some recent case law, and consider whether there are conceptual or procedural impediments to representative actions.
Representative actions have long played a role in English law, originating in the Court of Chancery before the Judicature Acts of 1873 and 1875 unified the courts of law and equity. In equity, the strict requirement that all interested parties be joined to a suit was relaxed where it was impractical to include every individual concerned. This practical concession allowed representative parties to litigate on behalf of others with a similar interest, thus ensuring a more efficient and conclusive resolution of disputes.
Over time, this equitable principle was codified into modern procedural rules. Today, the relevant rule is found in CPR 19.8, which governs the conditions under which representative actions may be brought. The core principle remains where multiple individuals share the same legal or factual interest in a claim, they can be represented by a single party, avoiding the need for each affected person to become a formal party to the proceedings. The result of the litigation is binding on all members of the represented class, even if they do not actively participate in the litigation.
The current iteration of the rule reflects the enduring need for an efficient mechanism to resolve mass claims. However, the application of CPR 19.8 continues to raise questions about the appropriateness of using representative actions compared to other procedural devices, such as GLOs.
The primary purpose of CPR 19.8 is to streamline litigation where multiple claimants have a common interest, allowing for a single, binding decision without requiring every individual to be involved in the process. The rule is particularly useful where the issue at stake affects a large number of people, and it would be inefficient or impractical to involve them all in the litigation.
Under CPR 19.8, representative actions are available where more than one person has “the same interest” in a claim. In practice, this means that the issue to be resolved must be common to all members of the group. The court may either allow a claim to be started by one or more representative parties or order that a claim already underway continue on a representative basis.
While the rule offers significant potential for efficient dispute resolution, it is not without limitations. The court has discretion under CPR 19.8(2) to direct that a person may not act as a representative, which has been a focal point of judicial consideration in recent cases. This discretion is critical in ensuring that representative actions are only used where they are appropriate, and where they can achieve the desired balance between efficiency and fairness.
The two key cases in recent years are Jalla v Shell International Trading and Shipping Co Ltd [2021] EWCA Civ 1389 and Lloyd v Google LLC [2021] UKSC 50 which have provided substantial guidance on the application and limitations of CPR 19.8.
The Jalla case arose out of environmental damage and economic loss caused by an oil spill in Nigeria. The claimants sought to bring a representative action on behalf of thousands of affected individuals. However, the Court of Appeal ruled that representative proceedings were inappropriate because the interests of the claimants were not sufficiently identical. The court found that the nature of the harm varied significantly between individuals—some had suffered damage to land, others to livelihood, and others were affected in different ways altogether.
This decision reaffirmed the principle that for a representative action to proceed, the represented class must have a truly common interest in the claim. The variability of the claimants’ circumstances in Jalla meant that the issues could not be resolved collectively without individual consideration. This made the case unsuitable for representative proceedings and highlighted the challenges of using CPR 19.8 in cases involving disparate claims.
Lloyd involved a data privacy claim brought on behalf of over four million iPhone users, alleging that Google had unlawfully tracked their internet activity without consent. The claimants sought compensation for breaches of the Data Protection Act 1998. While the Supreme Court ultimately rejected the claim on the basis that individual damage had not been demonstrated, Lloyd provided important judicial commentary on the principles underpinning CPR 19.8.
Lord Leggatt clarified that representative actions are permissible where the members of the class have a common interest in the resolution of core issues, even if individual circumstances or claims for damages differ. Moreover, the judgment suggested that representative actions could be viable where damages could be calculated on a uniform basis or where liability could be determined collectively, with damages assessed individually at a later stage. This is the “bifurcated” approach.
Lloydaffirmed that representative actions are particularly suited to claims seeking declaratory relief, where the outcome will apply uniformly to all class members. However, where individualized damage assessments are necessary, a representative action may be less suitable, unless a bifurcated approach is adopted.
The Jalla and Lloyd decisions have established a number of key principles governing representative actions under CPR 19.8:
- Common Interest: The claimants must have the same interest in the litigation, meaning a truly common issue that does not require individual determination.
- Variability of Claims: Divergent individual interests or differing factual circumstances can preclude the use of representative actions.
- Discretion of the Court: Courts retain broad discretion to allow or refuse representative actions, considering factors such as the overriding objective of dealing with cases justly and proportionately.
- Declaratory Relief: Representative actions are most effective in claims seeking declaratory relief, where a uniform decision can be applied to all class members.
- Damages and Individual Assessments: While damages may be claimed in representative actions, this is only feasible if damages can be calculated on a common basis or if liability is determined first, with individual assessments of damages to follow.
- Bifurcated Approach: In cases involving both common and individual issues, a bifurcated approach may allow liability to be resolved on a representative basis, with damages addressed later.
- Absence of Conflict: There must be no conflict of interest between the representative and the class members, as all must have the same interest in the outcome.
Against the backdrop of these principles, cases have now started to come forward.
The recent case of Commission Recovery Ltd v Marks & Clerk LLP [2024] EWCA Civ 9 involved a representative action concerning undisclosed commissions paid by a third-party intellectual property renewal service to Marks & Clerk LLP. The claimant, Commission Recovery Ltd (CRL), sought to act as a representative for a large class of clients who alleged their details had been passed to a further firm to undertake further steps to protect and renew their intellectual property rights, the said firm in turn paying Marks & Clerk LLP commissions, alleging that Marks & Clerk LLP had breached its fiduciary duties by failing to disclose receipt of those commissions.
The Court of Appeal upheld the decision to allow the claim to proceed as a representative action, highlighting the potential for representative proceedings in cases involving a common legal grievance shared by a large group of individuals. However, the judgment acknowledged that individual assessments would be required at later stages to determine issues such as consent and limitation. This bifurcated approach allowed the common issues to be resolved collectively while recognizing the need for individualized determinations later.
The Commission Recovery case demonstrates that representative actions can be used effectively in complex commercial disputes where the members of the class share a common legal interest, even if individual facts vary. However, the case also underscores the need for careful judicial management, as individual assessments may still be necessary in certain aspects of the case.
A recent case is a fascinating example of both the imaginative way in which it was sought to use a representative action on a large scale and the limits of the procedure. In Claire Smyth v British Airways [2024] EWHC 2173 (KB), the claimant sought to represent a large class of passengers whose flights had been delayed or cancelled, entitling them to compensation under EU Regulation 261/2004. It was suggested that the member class, drawn from 116,000 flights could include up to 23.2 million passengers, and potentially a liability of £319 million. The action brought by Ms Smyth was backed by a Mr John Armour who was funding the costs: and it was suggested in the judgment that a sum of up to £70 million might be deducted from this sum in respect of a funder’s fee and fees payable to the legal representatives. The legal basis for payment of these or any fees, was said to derive from an Order that had been obtained in the High Court, based on trust law principles, albeit that the order did not approve the funding arrangements or appoint Ms Smyth as a representative. Ms. Smyth’s claim raised important questions about the scope of representative actions in consumer claims, where there is an undisputed right to compensation but different factual circumstances surrounding the delays or cancellations.
Master Davison struck out the claim and refused to allow it to proceed as a representative action, primarily because the interests of the proposed class members were not sufficiently uniform. The judge noted that although members of a class can have divergent interests, which do constitute a conflict of interests, in the instant case the members interests diverged so widely, that the class members could not be said to have the “same interest.” The Claimant proposed to amend the class successively, but the defect was judged fundamental. The Master also indicated that he would not exercise his discretion in any event, to allow the claim to proceed. He did so as he found that the dominant motive for it lay in the financial interests of its backers, and not the interests of consumers. In those circumstances, it was not necessary to address the question that lay beyond that, namely whether it was possible in a representative action for the court to authorise the deduction of monies from damages or other sums recovered, to pay lawyers or litigation funders, and if it was possible, on what criteria such payments might be made.
Master Davison’s ruling in Claire Smyth highlights the importance of uniformity of interest in representative actions and suggests that where individualized circumstances significantly impact the claim, such actions may not be appropriate. The decision also reflects the court’s focus on proportionality, ensuring that procedural mechanisms are used in a way that avoids unnecessary complexity and cost: in the instant case, the availability of portals for customers to make their own claims or the Small Claims procedure were relevant factors to refuse to allow the action to proceed.
One of the key questions arising from the cases discussed above is whether representative actions remain a viable alternative to Group Litigation Orders (GLOs). GLOs, governed by CPR 19.11, provide a different mechanism for resolving mass claims. Unlike representative actions, GLOs allow individuals to bring separate claims that are managed together, ensuring that common issues are resolved collectively while preserving the autonomy of individual claims.
GLOs are often seen as more flexible than representative actions because they do not require the claimants to have identical interests. Each claimant retains their individual claim, which allows for variations in the facts, or the relief sought. In contrast, representative actions require a high degree of uniformity in the interests of the class members, which can be a significant limitation in complex cases.
Moreover, GLOs provide for individual assessments of damages, whereas representative actions are often limited to cases where damages can be calculated on a common basis. This makes GLOs a more appropriate tool in cases involving personal injury, financial mis-selling, or other claims where the quantum of damages varies between claimants.
In light of the judicial developments discussed in this article, representative actions under CPR 19.8 remain a viable procedural tool, but they are not without limitations. As seen post Jalla and Lloyd, representative actions are most effective in cases where the claimants share a truly common interest, and the issues can be resolved collectively without significant individual variations, notwithstanding the possibility of a bifurcated approach. However, where the facts or the relief sought differ between claimants, GLOs may offer a more practical solution.
While representative actions are not entirely redundant, their utility is limited to specific types of claims—particularly those seeking declaratory relief or cases where damages can be calculated on a common basis: identical payments of commission might be one such case, where a bifurcated approach was not necessary. In contrast, GLOs provide greater flexibility and are often better suited to handling complex, multi-claimant litigation where individual issues of liability or damages need to be assessed.
In conclusion, representative actions continue to serve a function in modern litigation. However, their scope is narrower than that of GLOs, and in many cases, GLOs may be the preferred mechanism for managing mass claims efficiently and fairly.
An earlier version of this article appeared in Litigation Funding magazine.