Niven: Class actions are on the rise
The Court of Appeal has allowed 134 claimants to start an action against a law firm with a single claim form, which their solicitor said will strengthen the trend for class actions in the UK.
The Master of the Rolls, Sir Geoffrey Vos, said the Civil Procedure Rules Committee (CPRC) – which he chairs – could look at the rules on multiple claimants to bring their claims in one claim where “some common question of law or fact” arose.
The ruling overturns the test set out last year in Abbott v Ministry of Defence, where Mr Justice Andrew Baker held that, if there were likely to be “common issues of sufficient significance that their determination would constitute real progress towards the final determination of each claim in a set of claims, that could be enough for a conclusion that common disposal rather than separate disposal of that set of claims would be convenient”.
In Morris & Ors v Williams & Co Solicitors, the claimants argue that the law firm was in breach of its duty to advise properly in relation to their investments in one or more of nine separate development projects promoted by the same group of companies, Northern Powerhouse Development Ltd.
Applying Abbott, His Honour Judge Jarman KC dismissed the solicitors’ application to strike out the claim form on the grounds that it was an abuse of process or an obstruction to the just disposal of the proceedings, or the claim form did not comply with part 7.3.
He found significant common issues in these cases, including the scope of the solicitors’ duties, questions of breach, what losses were recoverable in principle, and whether the investments were unlawful as collective investment schemes.
The appeal concerned the circumstances in which it was permissible for multiple claimants to bring claims in one claim form and one set of proceedings, and in particular the proper meaning of rule 19.1 (on group litigation) and 7.3.
Rule 19.1 provides that any number of claimants or defendants may be joined as parties to a claim, while 7.3 says a claimant may use a single claim form “to start all claims which can be conveniently disposed of in the same proceedings”.
Vos MR said that the regime allowing multiple claimants to bring their claims in one claim form under 19.1 had to be construed against the background of the previous regime in the Rules of the Supreme Court (RSC) and specifically order 15 rule 4 (O15 r4), which allowed multiple claimants where ‘some common question of law or fact’ arose and where their claims arose out of the same transaction or series of transactions.
“Those were not exclusionary tests, because there remained the fall back of the permission of the court,” Vos MR explained.
Abbott was wrong to suggest that rule 7.3 required the court to apply the ‘real progress’ test, the ‘real significance’ test or a requirement that the determination of common issues in a claim by multiple claimants under 19.1 would bind all parties, he held.
“[Rules] 19.1 and 7.3 mean what they say. Any number of claimants or defendants may be joined as parties to proceedings, and claimants may use a single claim form to start all claims which can be conveniently disposed of in the same proceedings.
“The court will determine what is convenient according to the facts of every case. There is no test beyond the words of rule 7.3, even if it is clear that cases within the old O15 r4 and cases where common issues will bind all the claimants will obviously be capable of being conveniently disposed of in the same proceedings.”
He added that it would nonetheless be valuable for the CPRC “to have another look at the current provisions, with a view to considering whether the existing rules are working well or whether a requirement for common questions of law or fact to be identified could usefully have been brought across from the RSC”.
Vos MR stressed that he was not looking to discourage the use of group litigation orders, which he described as “a very useful and desirable procedure in many cases”.
As it “cannot be doubted that, on the judge’s findings of fact as to common issues (which have not been appealed), the claimants’ claims would have satisfied the requirements of O15 r4”, there was “no point” in sending the case back to the judge to apply the correct test.
Dismissing the appeal, Vos LJ said: “We can make that decision now. The claims brought by the claimants in their single claim form can be conveniently disposed of in these proceedings.”
David Niven, the partner at Penningtons Manches Cooper representing the claimants, said: “This is a significant legal victory for claimant class action teams. This decision is likely to make it easier for claimants to bring claims even where there are differences between the claims and the claimants.”
A key element was the court making clear that the convenience of bringing multiple claims in one form did not require establishing ‘commonality’ between the claims and claimants.
“This landmark judgment is a significant step forward not just for this claim but for collective redress in the English courts. It provides claimants with access to justice in the simplest form of a group claim: a single claim form for all claimants and claims.
“Class actions are on the rise in the English courts. This crucial judgment highlights the courts’ willingness to ensure that procedural complexities do not prevent access to justice in large-scale litigation.
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