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Costs issues

Although one of the key benefits of a group action is the efficiency that comes from determining common issues in a single set of proceedings, inevitably not all the work on a case will relate to every claim, and so multi-party proceedings can involve complex questions around costs allocation.

In the context of a GLO, specific rules govern costs recovery, distinguishing between individual costs (costs incurred in relation to an individual claim on the group register) and common costs (costs incurred in relation to the GLO issues, individual costs incurred in a claim while it is proceeding as a test claim, and costs incurred by the lead legal representative in administering the group). The general rule is that all the members of the group will have several liability for an equal proportion of the common costs, together with individual liability for costs on their own claim. Where common costs have been incurred before a claim is entered on the group register, the court may order that claimant to be liable for a proportion of those costs.

By contrast, in a representative action, generally speaking only the representative will be liable for costs (although in practice any costs liability is likely to be covered by third-party funders and ATE insurance). Although it is, in theory, possible for the court to make a third-party costs order against a represented party, such orders are unusual.

Where multiple claims are brought together, the approach to common costs is not dealt with explicitly. It may be appropriate to mirror the GLO regime and to share common costs equally on a several basis, but parties may seek an alternative order. For example, in Re Ingenious Litigation (2020), which concerned claims by investors in various film finance partnerships, the court suggested that liability for adverse costs should be apportioned on the basis of their cash investment, such that the claimants shared risks proportionately to the possible rewards.