The long-awaited group claims or "class actions" procedure comes into force in Scotland on 31 July 2020. For the first time, groups of two or more people with the same, similar or related claims will have a mechanism to raise proceedings as a single action in the Court of Session.
The rules, published on 9 July, implement Part 4 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 and introduce group proceedings on an opt-in basis. This means that potential class members must elect to join a class in order to participate, as opposed to the US style opt-out system whereby those falling within a class definition are automatically included unless they elect to opt-out.
How group proceedings will be raised
Applicants (i.e. the person seeking to be the representative party raising the proceedings on behalf of the group) must first be authorised by the court to commence the action. The court will consider factors such as the applicant's:
• relevant expertise or special abilities;
• interest in the proceedings and any potential benefit they will obtain (and that these do not conflict with the interest of the group as a whole);
• ability to demonstrate "sufficient competence" to litigate the claims properly, including financial resources to meet any costs awards.
Separate permission is required for the case to proceed as a group action although this can be sought at the same time or by separate application once the representative party has been approved. As well as the usual documentation to start a claim, a Group Register (listing the pursuers) must be filed alongside the application and served upon the intended defender.
The defender has an opportunity to respond to applications to start group proceedings and to applications to authorise the representative party. It is possible to appeal against the grant or refusal of permission to bring group proceedings, however it does not appear to be possible to appeal against the authorisation (or refusal of) the representative party.
Types of claim which can proceed as a group action
The principal requirement is that the group of claims must raise issues of fact or law which are the same as, or similar or related to, each other.
The representative party must be satisfied that each group member's claim falls within this description and that the individual claim has not prescribed. It also appears to be possible to add group members up until a proof (trial) has been fixed.
The court must also agree that:
• there is a prima facie case;
• proceeding as a group will be more efficient than as separate claims; and
• there is a real prospect of success
What this means
How quickly we see a rise in group proceedings being raised will inevitably be determined by the speed at which litigation funders, working in conjunction with pursuer law firms, establish a firm presence in the Scottish litigation market. Since the aim of the new rules is to make it easier for claims to be brought, it seems likely that we will see an increase in the number of cases proceeding in the Court of Session over the coming months, with significant litigation exposure for defenders.
The range of sectors impacted could be very wide-ranging indeed, with almost any type of consumer-facing organisation now facing exposure to claims with low individual value, but with a significant total damages award if the class is large, or indeed cases which might not otherwise have been filed.
Although the rules give some welcome clarity on the key aspects of the new procedure, questions are likely to remain about how it will operate in practice until we see the first group proceedings being raised. Brodies will continue to monitor developments in this area closely, with further insights to follow.