Group Proceedings in Practice - Part Two

This blog is an update to the Group Proceedings in Practice blog published last year (Group Proceedings in Practice).

Since publication of our previous blog, the Court of Session has granted a recent application to proceed against a number of vehicle manufactures under the group proceedings rules. This has signalled a shift in the landscape of group proceedings in Scotland and has brought welcome clarity to practitioners on several key aspects of how the new procedure is likely to function in practice, specifically in relation to the requirements for certifying a Representative Party.

Some key highlights of the decision are:

• The ability of the proposed Representative Party to fund the litigation is likely to be heavily scrutinised by the Court. One factor in assessing whether the applicant is a "suitable person" is whether they are able to demonstrate "sufficient competence … to litigate the claims properly, including financial resources to meet any expenses awards" (Rule 26A.7(f)). Funding arrangements, both for running the case on behalf of the Pursuers and for meeting any expenses awards made against them may be complex, and may include agreements between individual Pursuers, their solicitors and third-party funders and/or insurers. Arrangements may differ from case to case but it seems clear that the Court will expect to be fully appraised in order to assess whether the suitability test is met.

• Claims are unlikely to be grouped together and then sub-divided. The principal consideration before the Court is that the individual claims must raise questions of fact or law which are sufficiently similar to merit inclusion in group proceedings. It was not clear how the Court would respond to a request by a number of different firms representing Pursuers to seek a group proceedings order and then ask the Court to divide the case up into smaller groups to deal with, for example, claims against different vehicle manufacturers several different defenders but, if Lord Ericht's decision is followed, it appears that the Court will be slow to do so. In a recent blog we discussed the potential impact such an approach could have on consumer facing/retail financial services institutions (Group Proceedings Horizon Scanning. Part one – "Mortgage Prisoner" litigation).

• The Court is likely to prefer to determine key questions relative to all claims in the group as opposed to issuing a judgement on "lead cases". This is a departure from the traditional approach taken by the Court in collective proceedings in Scotland, whereby a lead case or cases would be identified and the remaining (separate) actions would be sisted (i.e. paused) pending the outcome.

We anticipate that clearer guidance on certification of group proceedings in Scotland will emerge through caselaw over the coming months and year. Further insights from the Brodies team will follow.