So vast a throng the stage can ne’er contain: litigation involving groups

This article was first published on Practical Law's Dispute Resolution Blog.

Often, a litigator’s single greatest desire is for clarity: of instructions, tactics, or argument. Few circumstances can disrupt this as effectively as a large group of clients or opponents, each clamouring for different (often mutually exclusive) approaches. Once such a case reaches a certain size, it is simply not feasible to proceed in the usual way, with all parties giving evidence and making submissions. There are a number of ways of addressing this problem, each with unique benefits and pitfalls.

Group litigation orders (GLOs)

GLOs are governed by CPR 19 and Practice Direction 19B. Though the Civil Procedure Rules (CPR) are explicit that GLOs can be used in respect of either claimants or defendants, the CPR arguably have a group of claimants in contemplation. In the majority of reported cases, the claim is brought by the group in question, and the Practice Direction (PD) applies only where the multiple parties are claimants. Where the multiple parties are defendants, the process of applying for a GLO and the application of CPR 19 are less clear.

The central features of a GLO are:

• A group register setting out all of the claims being managed under the GLO.
• A list of “GLO issues” which identify which cases should be managed under the GLO.
• A “management court” which manages all claims falling under the GLO.

Any judgment or order made in respect of one claim on the register will be binding on all the claims on the register at that time unless the court orders otherwise, and the court may make directions setting out the extent to which the judgment or order will bind claims added to the register at a later date. A party whose claim is added to the register later cannot make any application in respect of the judgment or order itself, but they may apply for the judgment or order not to be binding upon him or her.

Once a GLO has been made, the court has wide case management powers in respect of the claims on the register:

• One of the claims can be nominated as a test case.
• A solicitor acting for one of the multiple parties can be appointed as lead solicitor for all of the claimants or defendants (as the case may be).
• Details can be specified to appear on any statement of case to show that the criteria for entry on the register are met.
• The court may direct filing of a “group particulars of claim” setting out general allegations relating to all of the claims together with a schedule showing which individual claims rely upon which general allegations.

Cases being managed under a GLO are automatically allocated to the multi-track.

Parties may apply to have their own individual case removed from the register, but the court has discretion as to whether to permit this. This ought to be considered when deciding whether to issue a claim and when: there is always a risk of a claim being unintentionally caught within a GLO and the court not permitting it to be removed from the register.

As to costs, the default position under CPR 46.6 is that each of the multiple parties will be liable for an equal share of any costs order. That said, the court retains its discretion as to costs, and can depart from this position if the conduct of any party justifies it (see Bairstow v Queens Moat Houses Plc (Assessment of Costs)).

The details of the process of applying for a GLO are beyond the scope of this blog, save to say that it is relatively onerous and requires the consent of members of the senior judiciary: either the President of the Queen’s Bench Division or the Chancellor if in the Queen’s Bench or Chancery Divisions respectively, or the Head of Civil Justice (who is, at present, also the Master of the Rolls) for a claim in the County Court.

Whilst GLOs are a relatively neat method of conducting litigation for or against a group, they are not without problems. Any individual is likely to lose a certain amount of control over the litigation, there are significant logistical hurdles to overcome, and the process is more apt for a group of claims rather than a group of defences.

Representative parties

As an alternative to GLOs, multiple claims may be dealt with using the representative parties procedure, also set out in CPR 19. However, this may only be used where the parties in question have the “same interest” in the proceedings. That requirement has been interpreted liberally in the case law as meaning that the parties must have “a common interest and a common grievance” and that “the relief sought [must] in its nature [be] beneficial to all” within the group (Emerald Supplies Ltd v British Airways Plc). Where there is any conflict of interest within the group, the requirement cannot be satisfied.

Any judgment or order made under this procedure will be binding upon all persons represented by the representative parties, but can only be enforced by a non-party with the court’s permission. Attractively, the consent of other parties with the “same interest” is not required in order for them to be represented under this procedure (Independiente Ltd v Music Trading On Line (HK) Ltd). Analogous to GLOs, the court can order service of a judgment or order against an affected non-party. If there is no acknowledgement of service, that non-party will become bound by the judgment or order; if service is acknowledged, the non-party may either apply to set aside or vary the judgment or order, or may participate in the proceedings.

Consolidation, joinder and so on

If neither a GLO nor the representative parties procedure can be used, the court still has wide case management powers under CPR 3.1, which can be used to address litigation involving groups of parties, albeit that the available solutions are far from perfect.

Assuming that the cases have not been issued as one claim from the outset which identify all of the relevant parties as claimants or defendants, the most straightforward route is for the court to consolidate claims which have already been issued or to join non-parties in respect of whom there are no ongoing proceedings, at the same time as nominating lead cases within that group. The non-lead cases can then effectively be determined without the court hearing any evidence or submissions as to the specific facts of that case.

Alternatively, the issue can be addressed without the court taking any procedural steps at all if there is a freestanding agreement from the relevant parties to be bound by the outcome of one particular case.

The immediately apparent difficulty with both of these approaches is that they require the consent of all the parties. Absent consent, it is highly unlikely that the court is empowered to restrict a party’s access to justice in this way. That may well prove problematic for parties within the group as well as their opponent(s), who may wish their own case to be resolved separately for factual, legal, or commercial reasons. For example, an institutional client might wish to avoid “setting a precedent” with a large piece of litigation that may be heavily publicised. Further, consolidation and joinder merge cases under one claim number, aggregating the quantum of each individual claim. Self-evidently, this will interact with allocation to track, something parties on either side of the litigation may wish to avoid.

The first approach is also likely to involve a degree of frontloaded expense. This is clear from the complexity of deciding which cases to consolidate, identifying issues to be determined, and dealing with the logistics of serving documents on (or on behalf of) a large number of separate parties.

The second approach (of a freestanding agreement to be bound) will also not dispose of the other cases without more. The agreement will only create an estoppel in the other claims, preventing the parties from relying on arguments determined in the nominated case. At best, this would require a summary judgment application in each of the other sets of proceedings. At worst, it gives the other parties an opportunity to find new arguments to “plead around” the findings by which they are bound. This approach may not be cost effective, and is wracked by uncertainty and risk.

Under either approach, arguments on costs are also likely to be complex and require the parties to be given the opportunity to make further representations in respect of the non-lead cases. Unlike GLOs, there is no default costs position; an analogous costs order may well not be appropriate in the circumstances of the particular case. On the second approach, there is also a very real possibility of the losing party in the lead case bearing the entirety of the costs burden of litigating on behalf of the rest of the group.

Conclusion

None of the methods of dealing with group litigation constitutes a perfect solution. Irrespective of whether acting for or against a group of parties, the key considerations are:

• Ensuring the other party is bound by any determination in the proceedings.
• Liability for costs and the enforceability of costs orders.
• Streamlining the litigation as much as possible.

The problem is perhaps at its most pronounced in mid-sized cases, where obtaining a GLO is likely to be disproportionately onerous but where the alternatives are inadequate. If possible, these difficulties ought to be considered before even embarking upon the litigation.