PPI: Group litigation order would not be quicker or cheaper, judge rules
A circuit judge has refused to make a group litigation order (GLO) in relation to thousands of Plevin claims brought by one class action law firm, a move competitors had opposed.
Her Honour Judge Emma Kelly was critical of the application made by London practice Harcus Parker (HP), saying its proposal was “underdeveloped and reveals a concerning lack of evaluation of the merits and actual issues arising in individual claims, and as to practicalities of the operation of a GLO”.
In challenging HP founder Damon Parker’s contention that it would likely bring around 90,000 claims out of more than nearly 500,000 people who had signed up as potential claimants, the eight defendant financial institutions said HP had not yet screened the clients.
Barclays Bank said it had received data subject access requests (DSARs) from HP in names such as Darth Vadar, Michael Mouse, and Donald Duck, while Santander said it had also received requests in the names of Adolf Hitler and Rishi Sunak.
HSBC said that only around 17% of potential claimant names provided by HP had taken out PPI with it.
“I share the defendants’ concerns as to the accuracy of Mr Parker’s predictions of claim numbers,” said HHJ Kelly, sitting in Birmingham in a decision from January only just published.
“[I]t became apparent during the hearing that HP has made no meaningful effort to triage the issued claims to identify what issues arise in which subsets of cases.
“That chimes with the experience of the defendants and other financial institutions as to the poor quality of data received from HP and the very low conversion rates from DSAR to issued claims in the Plevin market generally.”
it was “not appropriate” for a GLO or an omnibus claim form to be “used as a metaphorical ‘dumping’ of claims at the doors of the court and of defendants”, the judge went on.
“Claimant solicitors should evaluate the merits of individual claims and likely issues arising before issuing claims rather than putting the onus on defendants to construct the claim for them.”
Four other law firms gave evidence, with Altrincham firm Cheval Legal – which described itself as “the main claimant law firm in the Plevin field”, having settled nearly 20,000 claims – and London firm BlackLion Law opposing the GLO.
Consumer Rights Solicitors was neutral, with the only supporter being fellow Manchester firm Sandstone Legal, which since the hearing in October has faced significant financial trouble.
“It is apparent that the GLO application does not have widespread support from other claimant law firms,” said HHJ Kelly.
“Some of the reticence is likely to be influenced by commercial considerations borne out of a risk that firms may lose clients to HP. However, concerns as to delay, increased costs, and the lack of utility of test cases chime with the concerns expressed by the defendants.”
Plevin claims, named after a pivotal Supreme Court ruling, concern undisclosed commissions paid on the sale of payment protection insurance.
The claim before the court named around 3,420 claimants on a single, or omnibus, claim form. HP has issued three further omnibus claims forms in Birmingham against the same eight defendants with around 11,000 more claimants, and well as three against other financial institutions, with the intention for a GLO eventually to cover all of them.
HP’s website for the GLO puts the value of the entire claim at £18bn, saying that “on average, customers may receive around £3,2000 as a refund”.
The claims are backed by Luxembourg-based funder Katch Fund Solutions, which has agreed a litigation budget of more than £10m and also provided a £10m indemnity for adverse costs.
HP envisaged using no more than 20 test cases to resolve all the GLO issues in a single four-week trial but HHJ Kelly found that, although aspects of the litigation made the idea superficially attractive, “multiple matters indicate that a GLO on the application as presented would not further the overriding objective”.
The evidence did not show it would save expense or time, she said, estimating that the GLO “super-structure” and trial of test cases, which she thought would likely need to be a far greater number than HP envisaged, would cost more than £20m.
It was likely that most of the remaining claims “would still then require individual assessment”, meaning the overall costs would be higher than the claims being pursued on an individual basis.
HP claimed it would cost claimant law firms more than £600m to run 90,000 claims to a final hearing, although only around 8% of Plevin claims – virtually all of which are on the small claims track – require a final hearing.
Further, the judge held, the trial of test cases as proposed would resolve some common issues but overall “would not yield binding decisions capable of determining the remaining claims”.
She said: “HP’s desire to railroad all claims into a ‘one size fits all’ framework ignores the realities of the issues that arise for determination in Plevin claims.”
HHJ Kelly was not persuaded that a GLO was needed to ensure fairness to would-be claimants, who it was argued would otherwise struggle to access justice, especially those with low-value claims.
“Other claimant law firms are active in this market. There is evidence that defendants receive many low-value claims, including from those who have legal representation.
“Moreover, there is no evidence that individual determination of Plevin claims under the small claims track procedure is an unfair process for claimants acting in person.”
As to the argument that the courts would struggle to deal with an avalanche of individual claims, HHJ Kelly said they were used to dealing with high volumes of Plevin claims, with around 56,000 issued between October 2020 and March 2022.
While the volume of future claims suggested by HP “would undoubtedly put a strain on the court system if all were litigated simultaneously”, the judge said the “warehousing of claims by HP with a view to unleashing them into the court system at the same time risks undermining the overriding objective”.
She added: “It would be inappropriate if an implied threat to overwhelm the court system were to be a valid reason for granting a GLO, if the claims were otherwise unsuited to that form of case management.”
HHJ Kelly also rejected HP’s alternative that, in the absence of a GLO, there should be collective case management.
“The claimants’ failure to provide an alternative draft order or detailed particulars of their proposed alternative collective case management order is very unsatisfactory and undermines the cogency of their proposal,” she said, continuing that most of the concerns that made a GLO inappropriate applied here too.
HHJ Kelly also found against the omnibus claim form. “The inclusion of eight defendants, who all sold different PPI products, renders a single set of proceedings anything but convenient in light of the added cost and complexity of multi-defendant litigation.”
She went on: “I recognise that it is unattractive for the courts and parties alike to be faced with thousands of individual claims, particularly ones being litigated at the same point in time.
“That does not however turn an omnibus claim form that does not enable the convenient disposal of claims in the same proceedings into one that does.”
The judge stressed, however, that this did not mean omnibus claim forms would never have a place in Plevin litigation.
She concluded: “In due course, consideration will have to be given as to how best to case manage any large influx of individual Plevin claims. The parties should consider the practicalities of determining multiple claims on separate claim forms.
“There may be utility in identifying claims against the same defendant and/or categorising claims involving the same product and/or similar issues as to compromise based on the same standard form documentation, with a view to cohorts of claims proceeding in the same county court hearing centre with provision for block listing.”
We have approached HP for comment.
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