British Advisory Panel Recommends Expanded Class Actions In English Courts

The possible transplantation of U.S.-style class actions to other countries has been a subject of much concern and study by those defending companies that market and sell their products internationally. Some have expressed skepticism that other nations, particularly those in Europe, will ever adopt true class actions because of general cultural differences, or specific factors, such as the absence of contingency fees. Others, pointing to examples like Canada, predict that the spread, while slow, may be inexorable.

Now comes a report issued by the advisory body responsible for overseeing the modernization of the English civil justice system recommending an expansion of class-like procedures in England. Entitled “Improving Access to Justice Through Collective Actions,” the Civil Justice Council proposes that the English civil justice system should add an “opt-out” class action to the existing range of procedural options available for civil claims. (The CJC is an Advisory Public Body, established under the Civil Procedure Act 1997 with responsibility for overseeing and coordinating the modernization of the civil justice system. The group provides advice to the Secretary of State for Constitutional Affairs on the effectiveness of aspects of the civil justice system, and makes recommendations to test, review or conduct research into specific areas. The Council includes members of the judiciary, members of the legal profession, civil servants concerned with the administration of the courts, persons with experience in and knowledge of consumer affairs, and persons able to represent the interests of particular kinds of litigants (for example business or employees)).

The Council report made several key findings:
-Existing English procedure does not provide sufficient or effective access to justice for consumers, small businesses, and employees;

-Existing collective actions could be improved considerably to promote better enforcement of citizens’ rights, while also protecting defendants from non-meritorious litigation;

-There are meritorious claims that could fairly be brought with greater efficiency and
effectiveness on a collective rather than unitary basis;

-Collective claims can benefit defendants in resolving disputes more economically and
efficiently, with greater conclusive certainty than can arise through unitary claims.

-The Courts are the most appropriate body to ensure that any new collective procedure is
fairly balanced as between claimants and defendants, the latter of which should be properly protected from unmeritorious, vexatious or spurious claims as well as from “blackmail” claims.

In turn, the CJC made several major recommendations:

-A generic collective action should be introduced.

-Collective claims should be brought by a wide range of representative parties: individual
representative claimants or defendants, designated bodies, and ad hoc bodies.

-Where an action is brought on an opt-out basis the statute of limitation period for class members should be suspended pending a defined change of circumstance.

-Certification of class status should be subject to a strict certification procedure.

-Appeals from either positive certification or a refusal to certify a claim should be subject
to the current rules on permission to appeal from case management decisions.

-Collective claims should be subject to an enhanced form of case management by
specialist judges.

-To protect the interests of the represented class of claimants any settlement agreed by the
representative claimant and the defendant(s) must be approved by the court within a
‘Fairness Hearing’ before it can bind the represented class of claimants.

While the CJC claimed to be wary of adopting the exact same model utilized by the U.S. justice system, and said it studied the pros and cons of the U.S. class action system, the report also suggests changes to the English court system that ought to be a cause for concern. These include aggregate damages, and the ability to have unallocated damages from an aggregate award distributed by a trustee of the award according cy-près.

The report invites a formal response from the lord chancellor, who is responsible for government policy on the legal system.