Over the years I have had involvement in a number of group actions, all of which have raised interesting issues both substantively and in relation to the battle royale, over costs which always ensues after settlement, or trial, or often trial and at least one tier of appeal.
Historically by and large it has been the claimants who have always sought a group litigation order, seeking to obtain the critical mass that a GLO offers, together with its bespoke case management regime and it is the defendant who has resisted a GLO, perhaps seeking to argue that a small sample of informal test cases would serve to illustrate the issues, at a much cheaper cost.
I have referred to the battle royale over costs as usually taking place after the substantive action: because although for years the courts have deployed costs capping orders in GLO litigation, often they have proved a damp squib, being imposed at too late a stage and at too high a level to provide much comfort to the putative paying party.
What I have observed over the last 10 years or so, and particularly since 2013 is a growing realisation on the part of putative compensators that there can be certain advantages to “ponying up” and actively seeking a GLO at an early stage. In particular since costs management has become a mainstream activity since 2013, with budgets deployed in every case the judiciary at every level have a much greater familiarity with the management of costs. A defendant can seek to leverage this regime.
Two recent cases illustrate these points. The first is that of Lungowe and others v Vedanta  EWHC 749 (TCC)The case is atypical as all GLO cases are, but represents a continuing trend to seek to bring large scale environmental disaster litigation where the harm was suffered overseas in the courts of the United Kingdom.
The case is significant because it involved a defendant seeking a GLO in order to capture and direct all the litigation which was being advanced against it by two separate firms of solicitors.
The case was summarised by Fraser J in these terms:
1. These proceedings are currently constituted as three separate sets of legal proceedings, all brought against Vedanta Resources plc, the First Defendant (“Vedanta”) and Konkola Copper Mines plc (“KCM”). KCM operates the Nchanga Copper Mine in the Chingola region of Zambia. Chingola is a province which is also sometimes called the Copperbelt Province, due to the rich copper deposits of the area. The province adjoins the Katanga province of the Democratic Republic of Congo, which enjoys similarly rich levels of minerals. Vedanta is a UK domiciled company that is the holding company for a number of other companies, including KCM which is one of its subsidiaries. KCM is a very valuable part of the Vedanta group.
2. Chingola is home to the Nchanga Copper Mine. Although this mine was, in the middle of the 20th century, a deep-shaft mine, it is now home to an open-cast mining operation. The Nchanga Copper Mine is the second largest open-cast mine in the world. Open-cast mining involves extraction of the relevant deposits directly from the surface, leading to topographical changes to the ground of increasing depth. The method is used not only for copper, but also for coal, diamonds and other valuable minerals around the world.
3. The application to which this judgment relates was issued by Vedanta on 14 February 2020. Vedanta seeks by its application to have a Group Litigation Order, or GLO, made in respect of these three separate sets of proceedings brought against both it and KCM by a large number of claimants. All of the claimants are residents in the Chingola region in the vicinity of the Nchanga Copper Mine. It is the effect upon those residents of the mining activities that lies at the heart of this litigation. The claims involve claims both of personal injury and widespread environmental damage due to pollution and the activities of the mine.
Fraser J then noted:
7. The subject matter of the different sets of proceedings concerns damage caused by pollution and other detrimental effects from the operation of the mine. Leigh Day, a well known firm of solicitors, act for different groups of overseas claimants in overseas tort claims in proceedings in this jurisdiction and have done for a number of years. The majority of the claimants are subsistence farmers who rely on the land and the local waterways to sustain basic agrarian livelihoods. They live along the Mushishima and Kakosa streams and the Kafue River, into which those streams flow. Their income is likely to be below the average income in Zambia, which is one of the world’s poorest countries. It is unlikely that many of them will have travelled outside this part of Zambia. Some claimants are children. None of the claimants could be said to have any financial depth whatsoever; on the contrary, they are very poor.
8. In another case, Okpabi and others v Royal Dutch Shell plc and Shell Petroleum Development Co of Nigeria Ltd  EWHC 89 (TCC), the defendants in that case described this method of advancing overseas tort claims in England, adopted by Leigh Day, as a “business model”, a term that was not intended to be complimentary. As explained in that judgment at  to , whether it is complimentary or not, it is entirely within the rules and indeed since the Supreme Court judgment in this specific case, expressly permissible for overseas claims to be brought here in this way. However, as a business model, if it was something unique to Leigh Day, it is no longer. This can be seen from this case.
The judge was dismissive of attempts to keep separate the various proceedings.
25. The order suggested by Leigh Day and Hausfeld jointly on behalf of their respective claimants in the different actions is not, in my judgment, properly described as a hybrid order. It had more similarities to Frankenstein’s monster. There is nothing especially unusual or unique about the type of claims advanced in these three different sets of proceedings against these two defendants, other than they have been issued at different times and one of the sets of proceedings was issued by different solicitors to the other two sets. There is no good reason for making any continuing distinction between claims brought by claimants represented by Leigh Day in the 2015 and 2020 sets of proceedings, and those represented by Hausfeld in the 2019 proceedings.
Deciding to make a GLO with issues that spanned the various proceedings he noted:
38. From the provisions of CPR Part 19, PD19 and these authorities, I derive the following principles:
1. Parties to litigation are generally entitled to be represented by the solicitors of their choice, and to have their case argued by their own representatives. However, in group litigation, that entitlement is qualified. In order properly to achieve efficient conduct and case management of the group litigation, that basic right takes second place to the advancement of the rights of the cohort. This is achieved through the role of the lead solicitor, and the use of counsel chosen and instructed by the lead solicitor.
2. The relationship between the lead solicitor and other firms, whether on a steering committee or otherwise, must be carefully defined in writing. In the absence of agreement, or in the event of deficiency in that agreement, the court will become involved, but this will occur only rarely. It is a reserve power and therefore rarely will it be deployed.
3. In group litigation, all the claimants in that group litigation who will be represented by a lead solicitor (or, as in the British Steel Group Litigation, two firms jointly acting as lead solicitor) are only entitled to instruct one counsel team (although that may have, of course, multiple members). Different groups of claimants are not entitled to instruct different groups of counsel.
By reducing the multiplicity of proceedings, the defendants almost certainly will succeed in reducing the costs expended by the claimants and will be able to direct their own defence more cogently and coherently.
GLO’s are to be costs managed like any other set of proceedings: the courts invariably seem to employ the costs management powers in part 3 CPR, rather than the costs capping powers also found in part 3, which now seem largely redundant, not least because due to a drafting quirk it is easier to revise a costs cap, than a costs management order.
A recent GLO case illustrates how costs considerations are driving the substantive case management of the litigation. In Hutson v Tata Steel UK Limited  EWHC 1608 (QB) Turner J refused to order trials of limitation defences as a preliminary issue, the exercise of his discretion heavily influenced by the costs consequences such trials would involve:
19. The defendant contends that the hearing of a limitation preliminary issue in selected lead cases would bring about a costs saving because the judgment of the Court in such cases would potentially lead to the early disposal of a significant number of other cases which would otherwise be expensive to prepare for and litigate in full.
20. I readily accept that questions of costs are, potentially, of considerable importance in the context of the determination of the merits of embarking on the hearing of a preliminary issue in any given case. Care must be taken, however, to identify whether the hoped-for savings may be more apparent than real.
21. A central consideration is the extent to which the determination of the limitation issue in selected lead cases would be likely to catalyse the early resolution of a high proportion of other claims. In this regard, the claimants make the following points:
(i) About half of the claims are not intended to be the subject of a limitation challenge. It must follow that the determination of lead cases confined solely to the limitation issue would provide no useful guidance whatsoever as to the proper resolution of such unaffected cases.
(ii) Only those lead cases, if any, in respect of which the limitation issue is decided in favour of the defendants would be concluded once and for all. Any that survive could well continue to be resisted on the remaining substantive grounds of defence including, for example, matters relating to diagnosis and causation.
(iii) Any adjudication on the limitation issue in the lead cases will not, in any event, be legally determinative of the result in any of the other cases which the defendant claims to be statute barred. The issues adjudicated upon are unlikely to involve the resolution of any disputed questions of law or documentary construction. Indeed, the proper approach to be taken to applications to disapply the three year limitation period is set out in recent detail in Carroll, from which I have already quoted at length, and is unlikely to be significantly revised by any further useful elaboration in the context of the present claims.
(iv) There is also a limit to the assistance which the exercise of the discretion in lead cases would provide in informing the parties as to the strength of the limitation issues arising in other cases. These claims involve over 20 different coke works with varying levels of consistency and availability of documentary records and a very considerable number of claimants the personal circumstances of whom are likely to vary significantly each from the other.
22. In my view, there is force in these points.
23. Moreover, the costs of hearing preliminary limitation issues are likely to be out of proportion to the perceived benefits. Even on the defendant’s estimate, the determination of such issues will take many days and I accept the claimants’ contention that it would probably be necessary to hear live evidence in any given case from: claimants, family members, union officials and/or, potentially, from legal or medical advisers. I am also persuaded that there is likely to be a significant overlap between the evidence which would have to be explored on the limitation issues and that which would have to be considered in the context of substantive liability.
Costs issued arose again, when the case returned before Turner J in Hutson v Tata Steel UK Limited  EWHC 771 (QB) for costs management. As Turner J noted:
2. The litigation is subject to a costs budgeting regime. For this purpose it has been divided into phases. The costs for each phase are budgeted at the commencement of the phase to which it is intended to apply. Phase 1 commenced on 13 March 2018 and concluded on 20 March 2020 whereupon phase 2 commenced.
The issues that he had to find were described as follows:
4. Three issues arose at the CCMC:
(i) The claimants apply retrospectively to amend their phase 1 budget to increase the sums to be allowed in respect of two categories of expenditure;
(ii) The claimants seek to put forward sums in respect of items within the forthcoming phase 2 budget period in excess of those which the defendant is prepared to agree;
(iii) The parties are in dispute over the appropriate order for costs arising from a hearing on 5th November 2019.
Turning to the first point, I have written elsewhere on the interesting decision of Chief Master Marsh on costs management, and the degree to which it can be retrospective. Although the approach in Sharp may not have the conceptual purity some academic writers may yearn for, it has one distinct advantage, to alternative approaches, namely that it works.
12. In Sharp v Blank  EWHC 3390 (Ch) Chief Master Marsh concluded that the jurisdiction to make a retrospective variation did exist. That decision is not, however, binding on this Court.
13. For the sake of argument, without, however, purporting to reach any concluded view on the issue, I am prepared to assume that the Rules equip the court to exercise such a power. Nevertheless, that is not an end of the matter.
The High Court judge declined to increase the past costs:
17. I agree with the defendant that the claimants have failed to produce adequate evidence justifying the categorisation of the delay as being a significant development. Their approach to calculating the figures is based on the assumption that the costs of group co-ordination will have increased pro rata over time. However, as the defendant points out, the heavy lifting of group-co-ordination is already covered by budgeted costs and, upon closer examination, the additional costs of the delay are likely to prove to be modest. Similarly, the increased costs of the CMC/CCMC are based on the assumption that the entirety of the work which would have been done in the adjourned hearing was duplicated. Again, I consider that this is pitching the case significantly too high.
He then went on to make various rulings on costs claimed in the budget and significantly reduced them.
27. In respect of phase 2, the claimants estimate the budgeted costs at £340,000, which is the same figure as that which was approved by the Court in respect of phase 1. It is anticipated, as with phase 1, that there will be one case management conference and one costs and case management conference. Neither is expected to last longer than a day. The defendant suggests £125,000 to be the appropriate figure.
28. The claimants’ breakdown anticipates the deployment of 1,052 hours of fee-earner time, of which only 47 hours represents costs lawyers’ time, which seems oddly low as a proportion of the total. Counsel’s fees account for £65,550 of the total.
29. Presently, it seems unlikely that the directions required at the third CMC will be particularly controversial and counsel’s fees should be lower than the budget predicts. The hourly rates, upon which the budgets are based, for the grade B, C and D fee earners and for the costs lawyers seem higher than would probably be allowed on detailed assessment. The predicted number of fee earner hours appears obviously excessive for the work necessary for two interlocutory hearings. Paragraph 7.4 of Practice Direction 3E requires the court to take incurred costs “into account when considering the reasonableness and proportionality of all subsequent budgeted costs”. Given that the claimants have incurred £876,926 so far, that is an important factor and an indication of an over-generous approach to the time anticipated for the next phase. In all the circumstances £150,000 is a reasonable and proportionate figure for phase 2.
A huge amount of fee earner time was contemplated for the disclosure exercise, which was only concerned with 4500-7500 pages of documents from the defendant. The claimants’ disclosure was thought likely to be less. Interestingly there is no mention in the judgment of the use of e-disclosure techniques or how they might be accommodated within a costs management exercise.
34. The claimants incurred £616,111 on disclosure before the commencement of phase 1 and £761,842 during phase 1. Disclosure was not subject to budgeting in phase 1. In addition to the costs incurred to date of £1,377,953, the Claimants anticipate further costs of £1,754,042, giving a total for disclosure to the end of phase 2 of £3,131,998. The claimants’ breakdown for phase 2 predicts the expenditure of 8,110 hours of fee earner time.
35. The claimants’ estimate was based on a prediction that the defendant’s disclosure would consist of about 12,000 documents. In fact the defendant now expects to make disclosure of between 4,500 and 7,500 documents. On behalf of the claimants, Mr Williams QC realistically accepted that this should lead to a reduction in the work required and a corresponding reduction to the budgeted costs.
36. In relation to the claimants’ own disclosure, given the amount of costs already incurred, much work must already have been done. 624 documents have been disclosed so far. The nature of the claims means that it is likely that the claimants’ disclosure will be significantly less than the defendant’s disclosure. Indeed, by comparison with other group litigation, this is not a very heavy documented case.
37. The defendant suggests £560,000 which is a similar sum to that in its own budget.
38. While the claimants’ disclosure is likely to be less than that of the defendant, the documents they disclose will be coming from a wider range of sources and will require more work to unearth. Further, because the claimants are not represented by a single firm of solicitors, more fee earners will be involved. That said, the amount of fee earner time predicted, in addition to the costs already incurred, seems far too high. In all the circumstances, £750,000 would be a reasonable and proportionate sum for phase 2.
Similar approaches were taken to other phases: the sums sought by the claimants were reduced. Again, there is no mention in the judgment of the technology that might be deployed to reduce costs: the day will surely come, when the courts have to grapple with the concept of sending an email to 10,000 claimants simultaneously, at zero marginal cost, not even the cost of an envelope or a stamp, and how they can fairly or reasonably place a cost upon that exercise.
Although time based charges may be overtaken in due course by value based charging, it is apparent that in most respects, that conceptual shift has yet to be made either by the lawyers or the courts.