The Memo: Could US-style group litigation make its way across the pond?

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Could US-style group litigation make its way across the pond?

Nikolai Viedge – 27 February 2023

Unlike the US, UK courts seldom deal with multi-claimant litigation cases (MCLCs). In these cases, a group of plaintiffs (usually individual citizens, called ‘claimants’ in England and Wales) band together to take on a defendant (typically a company), which the group feels is liable for some alleged misdeed. The court treats the group as a single entity and, unless there’s a change in circumstances, the group wins or loses together, and damages are awarded in one lump sum for the claim.

As readers and watchers of courtroom dramas know (think Erin Brockovich), the damages awarded in such cases can be astronomical. But, while we may shake our heads at the figures involved in some cases, MCLCs are often the only recourse for people who would not have the resources to take on the accused independently.

While still uncommon in the UK, BigLaw firm Dechert has highlighted several factors that could see this change. First, UK courts are becoming increasingly willing to embrace MCLCs. Second, litigation funding (an increasingly popular method of financing major claims) has increased, providing claimants and the lawyers that represent them with a potential source of funds. Third, there has been an increase in US plaintiffs’ firms partnering with English firms to recruit English claimants for their own multidistrict litigations (MDLs). Which in turn could lead to copycat English claims, which bring with them the potential for increased damages. English courts seldom award punitive damages and are restricted to only specific types of cases. A potential consequence of English/US partnerships, along with a greater willingness by courts to deal with MCLCs, could see punitive damage awards increase in the future.

From a company perspective, an increase in MCLCs is likely to be unwelcome. Not only due to the possibility of litigation, but the possibility for punitive damages. For claimants however, the changes are potentially welcome news for the same reasons. For those interested in tort, or as the recent Student Group Claim highlights, breach of contract work, this is a development that is worth keeping an eye on.