The Civil Justice Council ("CJC") has recently published its formal recommendations as to how to improve access to justice through collective actions (i.e. an action brought by or on behalf of a represented class, whose members have a common interest in the action). The report proposes the introduction of a generic collective action, capable of being brought by a wide range of representative parties, from individual representative claimants to designated or ad-hoc bodies. Whilst the proposals do not call for the wholesale adoption of the much-feared American-style class action, the CJC does propose that in some instances an opt-out procedure would be appropriate.
The report is likely to have a significant impact on the way the options for collective redress are developed in this country and the proposals will come under close scrutiny, at a time when collective redress is very much in the spotlight not only within England and Wales, but across Europe.
In summary, the CJC's advice to the Lord Chancellor, which runs to some 480 pages, makes the following 11 proposals:
- A particular collective action mechanism should be
introduced, to be supplemented by further collective actions
to be used in the wider civil context, for example in cases
before the Competition Appeals Tribunal.
- A wide range of representative parties should be
permitted to bring a collective action, from individual
representatives to designated or ad-hoc bodies.
- Such claims should be capable of being brought on either
an opt-in or opt-out basis (subject to certain restrictions
on limitation periods for class members where an action is
brought on an opt-out basis).
- In order to bring a collective action, the claim would
need to be certified by the court.
- Appeals regarding certification (or lack thereof) should
be treated in the same way as permission to appeal from case
management decisions and all other appeals within the claim
should be subject to normal appeal rules.
- Specialist judges should be responsible for
case-management of collective actions.
- Courts should have the power to aggregate damages in
cases brought on an opt-out basis, where appropriate.
- Settlements agreed on behalf of a represented class of
claimants should be subject to a "fairness hearing"
before binding all those within that class.
- There should be full costs shifting (i.e. the loser
should continue to pay the winner's costs as a
disincentive to bring unmeritorious claims).
- Any unallocated damages from an aggregate award would be
distributed by a trustee, in accordance with general
principles of trust law.
- The new collective action should be introduced through
primary legislation.
In conducting its research the CJC found that there was "overwhelming evidence" that meritorious claims that could be brought are not being pursued and it said that a new collective action could not only "promote better enforcement of citizens' rights" but could also protect defendants from unmeritorious litigation.
The CJC also announced in its recommendations that that it will publish a report on the operation of contingency fees and costs shifting in its next paper. This comes at the same time as a plan by Sir Anthony Clarke, Master of the Rolls, to appoint a senior judge to undertake a review of the costs system. It is understood that the review by the senior judge will look at all aspects of the costs system in England and Wales, including conditional fee arrangements and other types of funding, proportionality of costs and the length of time spent on costs assessment processes.
The issue of collective redress and the proposals to introduce class or collective actions in Europe is one of the key topics being addressed by a 5-year research programme examining European civil justice systems at the renowned Centre for Socio-Legal Studies at the University of Oxford and sponsored by CMS.
To mark the beginning of this research programme CMS is planning a number of events for the Autumn to provide an opportunity for industry, academics and practitioners to come together to debate the issues.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 02/09/2008.
