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England and Wales

Author: Vincent Smith and Mahdis Moeiri-Farsi

I. Factsheet

Scope

The generally available collective compensatory procedures are: group litigation orders (GLO), representative actions (under CPR 19.6) and test cases

For sector specific mechanisms:

The Competition Act 1998 s 47B-E provides an alternative means of collective redress for claimants to bring collective claims in competition cases.

Remedy: compensation and/or an injunction

The 2015 Consumer Rights Act broadened the scope of redress available to consumer enforcers to include compensation and not solely injunctive relief.

Standing

There are no special rules on standing to bring a compensatory collective redress action under general collective redress mechanisms in England —normal legal capacity is sufficient.

Competition mechanism: it must be "just and reasonable" for the applicant to act as a class representative in the collective proceedings. The tribunal must consider whether the proposed representative would in all the circumstances fairly and adequately act in the interests of class members

Consumer mechanism: only those public bodies either set out in the Enterprise Act itself (the OFT, Trading Standards Offices -run by local authorities -and certain public consumer protection or regulatory bodies) or a private body designated by the minister may apply. To date the only non-public body to be designated is the Consumers' Association (Which?).

Problems/Incompatibilities with Recommendation principles

There is no requirement that the representative in representative proceedings (CPR 19.6) should have a non-profit motive

Admissibility

Admissibility is decided at the earliest stage of the proceedings.

Representative actions: it is open to the court, either on its own motion or on the application of any person with an interest, to direct either that the claim should not be continued as a representative claim at all, or that the representative should be replaced with an alternative.

Competition mechanism: the tribunal determines the eligibility of the claim based on three requirements:

- the claims must be brought on behalf of an identifiable class of persons;

- the claims to be included in the proceedings must raise "common issues"; and

- the claims must be "suitable" to be brought in collective proceedings.

Information on Collective Redress

Various privately-run websites offer information on collective redress

The national GLO list can be accessed at https://www.gov.uk/guidance/group-litigation-orders

Information in applications for competition CPOs is on the CAT website: http://www.catribunal.org.uk

Funding

Funding for collective redress claims comes from private sources —either litigation funders or the law firms which are representing the claimants.

Civil legal aid from government sources has all but disappeared in the UK in recent years.

Problems/Incompatibilities with Recommendation principles

Most larger collective claims are funded by a third party and/or law firm in some way. There is no legislative or public administrative control of funders in the UK.

However, at common law, anyone who improperly funds the litigation of another may be found liable for all of the (adverse) costs of that litigation if the case is lost

Cross Border Cases

There are no rules preventing claimants residing outside the UK from joining a GLO.

Competition mechanism: any victim of a competition law infringement may opt-in to a UK collective competition proceeding regardless of nationality or residence. However, an opt-out CPO order will only bind those class members who have not opted out and who are domiciled in the UK at the time set out in the order. However, even in an opt-out proceeding, non-UK residents may nevertheless decide to opt in

Problems/Incompatibilities with Recommendation principles

Consumer mechanism: foreign claimants have no standing to bring an application as they are not specified in the Act, nor have any non-UK bodies been designated by the Minister.

Expedient procedures for injunctive orders

The court can make an interim injunctive or declaratory order at any time -even before a claim has been commenced -in cases of urgency or where it would be in the interests of justice to do so.

Efficient enforcement of injunctive orders

Refusal to comply with an injunction or similar order —which is endorsed with a 'penal notice' (a warning that non-compliance is a criminal offence) —may be enforced through contempt of court proceedings. A court may make an order committing the defaulter to prison or may impose a lesser sanction -a fine or sequestration of goods, for example.

Opt In/Opt Out

The general compensatory collective redress mechanisms in the UK are opt-in only, with the exception of representative actions. An order or judgment in a representative action is binding on all persons represented, even if they were not parties to the proceedings and even if they were unaware that the proceedings were underway.

Competition mechanism: the collective proceedings order allows both an 'opt-in' and on an 'opt-out' system, at the discretion of the Tribunal. Opt-in is the starting point with opt-out being made available if necessary in the interests of justice.

Collective ADR and Settlements

The court is entitled to 'encourage' parties to use ADR (CPR rule 1.4(2)(e)) and may impose sanctions on them in costs if they unreasonably fail to do so.

Pre-action conduct requires parties to consider ADR.Competition mechanism: The tribunal may refuse to make a CPO if it thinks that the dispute could better be resolved using a form of ADR.

Costs

The Loser Pays Principle applies however, the court may make a different order if the loser was partly successful, the conduct of one or the other of the parties was unreasonable or where an offer to settle was made which was rejected but could have dealt with the claim earlier.

In cases under £10m in value parties are required to complete a costs budget which will be approved by the court. Recoverable costs are then limited to those set out in each party's budget.

To attempt to keep costs predictable and proportionate in GLO cases, courts have sometimes applied costs caps to the amount parties may recover in costs if they win.

Where a party has entered into a conditional fee agreement it will be unable to recover the success fee element from the losing party.

Lawyers' Fees

In England, contingency fees are permitted, but subject to some limitations:

- subject to a cap of 50% of recoveries.

- the DBA agreement must be in writing and there are ethical rules for lawyers requiring them to explain carefully to their clients the effect of the DBA

Problems/Incompatibilities with Recommendation principles

The court does not review and approve conditional fee agreements. However, a client may apply to have the reasonableness of his solicitor's costs assessed.

Prohibition of punitive damages

Punitive (exemplary) damages are only available in England and Wales in very rare circumstances. The defendant must have known he was acting unlawfully and continued with the conduct in the expectation that his gain from the unlawful act would exceed any compensation that could be awarded to the claimants.

Exemplary damages have not been awarded in collective redress actions.

Not available for competition mechanism

Problems/Incompatibilities with Recommendation principles

Punitive damages available

Collective Follow-on actions

It is not a pre-requisite for a competition claim that a public authority should have first made an infringement decision, although both of the applications made (to mid-2017) have followed on from a competition authority decision.

Interplay between injunctions and compensation across all sectors

Both injunctions and compensation are available under the collective redress mechanisms.

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