Out-Law / Your Daily Need-To-Know

Limits of ‘representative action’ procedure highlighted by Court of Appeal

Out-Law News | 08 Oct 2021 | 11:28 am | 3 min. read

A recent ruling by the Court of Appeal in London reiterates the limited circumstances in which individuals will be able to pursue claims against businesses on behalf of a wider group of people under the representative action procedure in England and Wales, an expert has said.

The Court of Appeal was considering an appeal lodged by two individuals, Harrison Jalla and Abel Chujor, against an earlier decision of the High Court in which the court ruled that the two men could not pursue litigation on behalf of thousands of people said to have been impacted by a 2011 oil spill off the coast of Nigeria as a representative action.

The Civil Procedure Rules (CPR) in England and Wales provide that, where different claimants have "the same interest in a claim", the claim may be begun or continued by one or more of the claimants as representatives of other claimants with the same interest. Unless the court orders otherwise, any judgment or order made in a representative action is binding on all persons represented, even if they are not party to the proceedings, although an order may only be enforced by or against someone who is not a party with the permission of the court.

In their appeal to the Court of Appeal, Jalla and Chujor claimed that the High Court had “erred in law” in rejecting their bid to raise a representative action in relation to the oil spill.

The Court of Appeal rejected Jalla and Chujor’s appeal. It determined that their case “was not and could never have been a representative action”.

Emilie Jones of Pinsent Masons, the law firm behind Out-Law, said: “Here, in an attempt to meet the objection that they did not have the ‘same interest’ as those they purported to represent, the claimants sought to homogenise the claims by limiting the remedy sought on behalf of each represented party to ‘remediation relief’, involving steps to address the consequences of the spill, rather than individualised damages. Despite this, the Court of Appeal was not persuaded that their case qualifies as a representative action. This was because issues such as limitation, causation, and whether damage sufficient to warrant the relief sought had been suffered would still have to be addressed on an individual basis for each of the 28,000-plus represented parties.”

“Amongst other things, the court considered it ‘highly likely’ that the spread, scale and any long-term effects of the spill varied in different parts of the ‘vast area’ – the size of Belgium – across which the represented parties lived. This meant that pursuing the matter as a representative action would not serve the core purpose of that procedure, namely to enhance the efficient administration of justice, because each of the thousands of claims would essentially have to be tried individually,” Jones said.

“This case illustrates once again the strict requirements which must be met if the representative action procedure in the CPR is to be used to seek collective redress,” she said.

In England and Wales, mass claims can be brought via other procedures.

Jones said: “In particular, the Court of Appeal mentioned the Group Litigation Order (GLO) regime, and the courts’ powers to case manage multiple cases together. These procedures contain efficiencies and safeguards not found in the representative action procedure.”

“For example, the GLO framework makes specific provision for important issues such as how any costs awarded to a defendant are to be shared between group claimants; and what happens if one group claimant withdraws or settles. The court may efficiently deal with issues common to some or all of the claims by carefully selecting from the pool of claims before it a number of sample cases, the outcome of which will be binding on others in the group. The court may also adopt similar techniques under a more informal, case management approach. It is important that those wishing to pursue collective actions do not try to use the representative action procedure as a shortcut past more appropriate mechanisms, and that the courts are astute to prevent this,” she said.

Part of the case raised by Jalla and Chujor in their appeal centred on their claim that the High Court was wrong to distinguish their case from that of Lloyd v Google – the leading case law in England and Wales concerning representative actions – in which the Court of Appeal granted Richard Lloyd, a former executive director of consumer magazine Which?, a right to advance a representative action for damages for class members’ “loss of control” over their data on the basis that each class member should be entitled to a uniform sum on a “lowest common denominator” basis which does not take into account their personal circumstances. The claim relates to the placing of advertising tracking cookies on iPhones using Apple’s ‘Safari’ browser in England and Wales between June 2011 and February 2012. Google was successful in a jurisdictional challenge at first instance. An appeal by Google to the Supreme Court was heard in April 2021, and judgment is awaited. 

Jones said that the Court of Appeal in Jalla and Chujor’s case did not consider itself “significantly hampered” by the fact that the Supreme Court judgment in Lloyd has not yet been handed down, because the present appeal was “argued and determined on the basis of an assumption that the Court of Appeal’s decision in Lloyd represented the current law.”

“Even on the basis of that assumption, the court did not consider that Jalla and Chujor could satisfy the ‘same interest’ test,” she said.