#7 Class Actions – Part II (UK Style)

Hi,

Legal system in the UK allows for class actions although they designed differently compared to the US and a lot of deterring mechanisms are in place which means that in the UK class actions are less popular.

UK law provides for several proceedings under which a class action or a representative action could be brought.

Group Litigation Order (GLO)

GLO was introduced in 2000 as a tool to the case management of similar claims. GLO may be granted on request or by judge own initiative. There is a register where these similar claims are recorded. Judge has the power to exclude the case from the register; also the judge may sets a cut-off date after which the inclusion into the register is not possible. The judge, in fact, has a lot more powers, for example he decides the order in which the GLO proceeds, the judge may order a separate trial for GLO as well. Parties have right to opt-out from the register.

Representative Proceedings

Representative Proceedings was introduced in the Civil Procedure Rules (CPR) after GLO. Main idea of representative proceedings is that legal persons are represented in the civil proceedings by other legal persons with the same interest. GLO, by contrast, allows a case to be included in the register considering not only the same interest pursued by the claimants. The claimants in the representative proceedings are not liable for individual costs; this is not the case in GLO proceedings. The judge has the power to refuse a representative claim. Party represented has right to avoid judgement if this party shows some special reason why this decision should not be enforced against him.

US Style vs UK Style class actions

GLO may be regarded as a UK equivalent of the US class actions. However, they are not similar:

·        UK Judge has power to refuse GLO on the grounds of cost effectiveness of a claims which could be brought in different manner, e.g. as representative proceedings;

·        UK class actions are costly, along with individual costs the claimants are subject to common costs which are distributed proportionately between the claimants;

·        US style class actions provide more incentives for lawyers who may be awarded with high percentages of damages, coupled with some possibility of punitive damages.

There were some developments in the UK procedural rules in relation to class actions. Thus, generic procedure was proposed enabling a claim to be brought by unidentifiable claimants who have not incurred any damages. Generic procedure was not eventually adopted but in specific cases, e.g. derivative actions, the statutory rules allows for such actions.

Hope that the above information was useful for you,

See you soon,

Andrey