Group Proceedings in Scotland: From Kenya to the Court of Session – Part 2

As noted in our recent blog, a group of more than 700 Kenyan tea farm workers has been permitted to raise group proceedings in the Court of Session against Finlays, a multi-national tea and coffee producer. The court's decision has now been published and contains some interesting commentary in relation to group proceedings and, in particular, who may be appointed as a representative party to act on behalf of the group.

Representative parties

In order for group proceedings to be raised, it is necessary for a representative party to be authorised to raise proceedings on behalf of the group. As noted in the court's decision, neither the relevant legislation (the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018) nor the rules of court define who may, or may not, be authorised to be a representative party in group proceedings. Instead there are factors for the court to consider in determining whether it is satisfied that the applicant is a suitable person to act in that capacity. These include:

• The special abilities and relevant expertise of the applicant;
• The applicant's own interest in the proceedings;
• Whether there would be any potential benefit to the applicant (financial or otherwise);
• Confirmation that the applicant is independent from the defender;
• Demonstration that the applicant would act fairly and adequately in the interests of the group; and
• Demonstration of sufficient competence by the applicant to litigate the claims properly, including financial resources to meet any expenses awards.

A person may apply for authorisation to be a representative party, whether or not that person is a member of the group.

The Kenyan tea farm worker's case

In the claims that have been raised on behalf of the Kenyan tea farm workers (also known as Thompsons Solicitors Scotland v James Finlay (Kenya) Limited), the court has considered the question of whether the law firm acting on behalf of the claimants can also act as the representative party.

In refusing to authorise the claimants' lawyers as the representative party in this case, Lord Weir (whilst making it clear that he was imputing absolutely no impropriety on the part of the particular applicant) noted: "the potential for conflict of interest, and the appearance of impropriety, arising from the possibility that decisions made by a representative party in group proceedings would be influenced by their financial interest as a member of the firm acting in those proceedings. Implicit in that concern would seem to be a recognition that, all things being equal, the positions of representative plaintiff in class proceedings and "class counsel" are, and should be, separate and distinct."

He considered that this broader concern arises from the "apparent blurring of the distinction between a party and its advisors, and the improbable consequence that the applicant would be issuing instructions, as representative party, to itself on matters relating to the progress of the group proceedings." He noted that he had not been referred to any authority, in any jurisdiction, where permission had been granted for the same firm to be both the representative party and instructed agent for the claimants in class or group proceedings.

In terms of this case, the funding arrangements for the proposed group were speculative and subject to success fees, which Lord Weir thought would serve to emphasise the potential for conflict (or the appearance of it) to arise in circumstances where settlement proposals are made to the representative party.

Accordingly, he did not consider that the applicant was a suitable person to act as a representative party in the contemplated group proceedings (which he was otherwise satisfied would meet the criteria to proceed as a group).

Future group proceedings in Scotland

In the absence of any specific provision in the legislation addressing who can be appointed, cases such as this one will be looked at for guidance by prospective representative parties. As more group proceedings are raised in Scotland, it will be interesting to follow the court's approach, and the practice which develops, in relation to the appointment of representative parties and the operation of group proceedings more generally. We will continue to monitor developments.