The concept of a group litigation or group action has been around for quite some time but has been seldom used in the UK. This style of litigation is much more popular in the U.S.
Essentially, it occurs when many people have the same legitimate claim against another party. Normally, the other party is a large corporation and the people wishing to join together to hold that party to account are its customers.
There needs to be a common theme or breach throughout everyone’s complaint: for example, everyone who wishes to make a claim consumed or used a product that harmed them in a similar way. Or all former customers of a bank were subjected to unfair and secret commissions on the financial products that were sold do them. This way, the court can singularly look at the actions of the wrong-doer in the context of providing a remedy to everyone who was affected by it.
How do you start a group litigation?
There are lots of different ways claimants can join together to pursue a common defendant. Not all of them are officially group litigations however. For example, you can have a consolidated action where there are multiple claimants all bringing claims and the court has ordered them all to be dealt with at the same time. This however still not a group litigation.
What sets a group litigation apart from other types of court cases is when a court delivers a “Group Litigation Order” (GLO). This order is usually made once court proceedings have been issued by the initial group of claimants.
If made, a GLO will not only deal with steps that must occur for the claimants that have already jointly issued a claim, but it recognises that the issue is so wide-spread that other claimants may also wish to become involved in the case after others have already started it. The GLO gives additional claimants the opportunity to register their own claim in the same court action that has been brought by the initial group.
The court will not allow people to register their interest in a litigation indefinitely and so will set a deadline by which all claims must be registered within the Group Litigation.
Types of GLO
GLO’s can be loosely broken down to two types: opt-in and opt-out.
The traditional route is the opt-in way: where all claimants need to actually indicate an interest in an action and register their claim following the GLO being granted.
The other more unusual route – which is much more popular in the U.S. is the “opt-out” GLO. This type of claim often involves hundreds of thousands of potential claimants (sometimes millions) and everyone’s claims are almost identical and relatively small on their own. In those circumstances a single claimant, will commence court proceedings, on behalf of many thousands of other unnamed claimants. The single claimant is often a person who is being supported by a consumer action group that wants to bring an issue to the public’s attention and hold a corporation to account.
The court must then grant the opt-out GLO which, if granted, basically means that all claimants who have been affected are automatically included in the group litigation unless they specifically indicate they do not wish to claim. The court will then determine the dispute and the damages payable and only then do people need to register an interest if they have been affected.
This type of claim is very rare and usually limited to breaches of competition law.
Group litigations are a very effective tool to enable consumers and private individuals to join together to hold a company to account for something it did or did not do. Because many of these claims only involve relatively small sums per claimant, corporate defendants will often get away with it because no one individual wants to take on a much better resourced defendant for what is a small sum. Group litigations help redress that balance.
Whatever the type of group litigation, the claims often require handling large volumes of information and client data and require large legal teams to ensure that everyone is kept up to date. The law in this area is still very new and somewhat uncharted – so only a few firms have the experience and the resources to run these claims.
At Johnson Law Group, we are specialists in group litigation claims, with our American arm having been involved in group actions and “mass – tort” in the U.S. for the last 20 years. If you have a claim you wish to discuss, just fill in the contact form to the right of this blog and someone will be in touch!
