Introduction of Group Proceedings in Scotland increases access to justice in multi-party claims

New rules introducing group proceedings in Scotland from 31 July 2020 mean that claims can now be brought by a representative on behalf of a group of people who are all affected by the same issues.

This welcome change follows on from the introduction of damages based fee arrangements in April 2020 which allows “no win no fee” and speculative fee arrangements, removing the up-front cost of proceedings as a barrier to raising litigation. Both developments reflect the ongoing reform of the Scottish legal system to improve access to justice through implementation of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018.

What are group proceedings?

Group proceedings are the new mechanism for combining multiple claims into a single representative action. A “group” is simply two or more people who have claims which raise the same, or similar or related, issues of fact or law.

Group proceedings are popular in other jurisdictions and are suitable for a variety of claim types such as consumer claims, personal injury claims, data breaches, pension claims and shareholder claims. Some recent high profile examples of group claims in England include the Volkswagen emissions litigation, British Airways data breach claims and contaminated blood products group action.

Group proceedings often involve a large number of people who are entitled to only a small sum in damages individually but who collectively have a substantial claim. They are also an efficient means of bringing claims in situations where the same negligence or breach of contract has impacted a relatively small number of people who would otherwise each have to bring separate proceedings against the same party.

How does the new representative action work?

Group proceedings must be raised in the Court of Session in Edinburgh by an authorised representative who is either part of the affected group or who has an interest in the proceedings. The representative could be an individual or an organisation, such as a consumer body or public interest group.

First of all the court must authorise the chosen representative to lead the claim on behalf of the group. The court must be satisfied that the representative is a suitable person or body and will act in the best interests of the group.

The court must also grant permission for the claim to proceed. Permission will only be granted if all of the relevant criteria are met:

a. the group claim raises issues which are the same as, or similar or related to, each other;

b. the representative party has made all reasonable efforts to identify and notify all potential members of the group about the proceedings;

c. there is a prima facie case (i.e. on the face of it there are grounds to proceed);

d. group proceedings is a more efficient administration of justice over separate proceedings; and

e. the proposed proceedings have real prospects of success (this is not intended to be a high hurdle at the preliminary stage).

Once permission has been granted, group proceedings follow a very similar model to existing commercial court actions. The judge will have discretion as to how best to manage the case and parties will ultimately work towards a final hearing of the issues. All group members must be consulted on the terms of any out-of-court settlement proposed before the conclusion of the formal court process.

What does “opt-in proceedings” mean?

The rules provide for an “opt-in” regime for group proceedings in Scotland at this stage. This means that the claim is brought with the express consent of each member of the group and individual claimants are only included in the action if they take positive steps to join.

Anyone who is affected by the issues in the claim but elects not to join the representative action will not be entitled to receive a share of any damages awarded. They can still raise a separate claim in their own right and will not be bound by the outcome of the group action.

The Scottish group proceedings legislation also provides for the possibility of opt-out processes in future. An opt-out action is where everyone who meets the group criteria is automatically included in the claim unless they actively opt-out. This type of “class” action is more similar to the US style procedure. Opt-out procedure is currently only available for Competition Appeals Tribunal claims in England and it has not yet been implemented in Scotland but remains under consideration.

How do I join a group litigation action in Scotland?

It is a requirement of group proceedings that the representative party must make all reasonable efforts to identify and notify all potential members of the group about the proceedings. The authorised representative, or the solicitors acting on their behalf, will therefore make the details of the claim available to those eligible to join the proceedings. There is a form that must be completed to opt-in to the proceedings and you will be asked to provide details of the circumstances that make you eligible to join the group claim and to produce any evidence available to support your claim. You can later withdraw from participating in the proceedings but if you are in any doubt as to whether or not you should join a representative action then you should seek independent legal advice.

We’re here to help – advice on group proceedings

The introduction of group proceedings in Scotland is a new and welcome development that will increase access to justice and streamline the court’s handling of multi-party claims.

Please contact our specialist Dispute Resolution team for advice and assistance on any aspect of group proceedings.