What is a Group Litigation Order?
Group Litigation Orders (‘GLOs’) were added to the Civil Procedure Rules in May 2000 and allow a number of claims which give rise to common or related issues of fact or law to be managed collectively by the High Court. Examples of recent GLOs include the VW emissions scandal, RBS Rights Issue dispute and the Construction Industry ‘Blacklisting’ litigation.
Why are GLOs increasingly popular?
GLOs are increasingly popular for three reasons. First, they are a cost-effective way for large groups of claimants to bring a claim in the High Court without each individual taking on a major costs risk. Second, there is now an established litigation funding market in the UK, and numerous firms will agree to pay for the substantial legal costs of issuing a GLO claim, in exchange for the funder taking a share of the proceeds in the event of a successful outcome. Third, UK law firms have followed in the footsteps of their US cousins, by building teams of specialist of ‘class action’ lawyers who have experience of recruiting and managing large number of claimants.
What are the increased reputation risks of a GLO?
By its nature, Group Litigation tends to involve many more stakeholders than a conventional High Court case and this creates increased reputation risks for both claimants and defendants at the pre-trial, trial and settlement phases of the dispute.
Unlike in the US, where class actions are “opt-out”, meaning once approved by the court claimants sue on behalf of all possible claimants, in the UK GLOs require claimants to “opt-in”. This means that both claimant and defendant lawyers need to consider how they are going to engage with potential GLO claimants before substantive legal proceedings have begun. For example, are there any communications strategies that might impact the ‘book building’ process by which individuals are ‘recruitment’ to the litigation?
The early stage of Group Litigation is characterised by significant judicial management and it is vital that all potential reputation pressure points are mapped out. Cases with multiple claimants being represented by ‘activist’ lawyers, are generally much more news worthy events. Case Management Conferences (‘CMCs’) where lead cases are selected or disclosure orders are made can become a particular focal point for claimant groups. In the Blacklisting Group Litigation it was not uncommon for there be over 100 people attending the High Court hearing.
Part 36 is still an effective settlement mechanism in Group Litigation and can be used by a canny Defendant to pick off stronger Lead Cases. However, a significant reputation risk remains if a small ‘hardcore’ of Claimants involved in a GLO decide to hold out, prolonging the litigation and preventing media closure in respect of the dispute. It is important to consider the non-financial goals claimants might have in Group Litigation, including their desire to see a particular individual in the witness box.
Alex Just is a former barrister with extensive experience of Group Litigation, including acting on behalf of over 300 trade union members in the Construction Industry ‘Blacklisting’ litigation.