In the latest edition of our spotlight series, we speak to commercial litigation Partner Hazel Chambers about her experience in the evolution of group actions.
Hazel works on high value, complex and multi-jurisdictional litigation, involving claims for breach of contract, fraudulent misrepresentation, breach of fiduciary duty and negligence. She has particular expertise in acting for Claimants in group litigation, but also acts for Defendants. She works closely with litigation funders, and has an in-depth knowledge of the particular issues that arise in funded claims and how best to navigate these.
A homegrown litigator
I'm Mishcon born and bred. I started at the firm as a paralegal and although I've always been a litigator, I've moved around a bit between departments. After a few years in Mishcon Private, where I worked in private client litigation, I moved over to the Dispute Resolution department and I'm now a Partner in the Commercial Litigation team.
The firm has grown in size since I started but I really think the ethos and culture have stayed constant, which is probably because a lot of the senior leadership who shape the firm have been here even longer than I have!
I enjoyed the private client work because when you are working for an individual you have the opportunity to build a relationship with them, and getting a good result is especially rewarding. It is different when the client is a corporate entity, as they are likely to be more driven by commercial factors and the risk/benefit analysis. But there is still room for emotions – after all, you are ultimately always dealing with people.
Spinning the group action plates
I like a good argument. I'm not confrontational, but I like mapping out a case and strategizing, reading between the lines of correspondence and statements of case, and working out what the other side's pressure points are. I like the psychology of it. Group litigation involves strategizing in a slightly different way – there are usually more spinning plates.
The first group action I worked on was the RBS Rights Issue Litigation. The case concerned claims by investors under section 90 of the Financial Services and Markets Act 2000 that RBS had misled its shareholders when it carried out a £12 billion rights issue in 2008, shortly before it had to be bailed out by the UK Government. It was a huge case, with multiple law firms acting for various different claimant groups under the terms of a group litigation order. We acted for a group of institutional investors and it was a fascinating experience, coordinating across firms as well as trying to secure the best result possible for our clients.
More recently I represented over 100 claimants in the Ingenious film finance litigation, bringing claims for fraudulent misrepresentation, negligence and breach of contract. Again, it was a massive case, with a number of separately represented claimant groups, but in Ingenious we acted for individual investors and there was no group litigation order. It was a very different experience.
On RBS we were generally taking instructions from each institutional investor's in-house counsel, and they tended to agree on strategy. But dealing with 113 individuals on Ingenious, there was much more scope for different opinions and different priorities. In group litigation, when you are giving advice, you have to think about the best interests of the group, rather than individuals, and you then have to be prepared to defend and explain your thinking.
Individuals also have very different sensitivities in relation to things like disclosure. Because of the breadth of time the Ingenious litigation covered, we ended up having to harvest and sift through huge amounts of personal data from the test claimants, even with the assistance of targeted searching. That wasn't easy or comfortable for everyone.
The lack of a group litigation order in Ingenious also meant there was much more scope for uncertainty. Costs issues, in particular, are much more complicated when you don't have the clear structure of a group litigation order in place – everything is up for grabs.
What to think about
When you first start thinking about group litigation, and formulating the claim, you need to think very carefully about common issues – what justifies bringing these claims together in a single action? Inevitably the claims won't be identical, but where there are areas of divergence, you need to think about whether the differences are too problematic, or whether there is enough commonality. Then you need to think about how you present the case and, in particular, how you select and justify your test claimants.
Where you have a number of different claimant groups, the defendants will inevitably be keen to sow division between you. Of course, claimants and their advisors understand that a united front is beneficial, but you always need to think about how you resolve differences of opinion. That can sometimes mean backing down, but there's a balance and you need to make sure you are acting in the best interests of your clients. Sometimes it will be in their best interests to put your head above the parapet and take a different approach to the other claimants.
Third party funding makes a big difference to group litigation and in my experience, provided you get the sums right, funders are receptive. The advantage of group litigation is the ability to bring together claims that perhaps individually wouldn't be economically viable. Third party funding can also help mitigate some of the more complex issues around costs in group actions. Without it, you need to establish how the costs are going to be divided, and if you don't have a group litigation order in place providing for costs to be several, it can be both complicated and contentious.
The future of group actions
The group action sphere is evolving in the UK courts. Opt-out procedures, enabling a claim to be brought on behalf of an entire class, without requiring participants to take any steps, have been dealt a blow by the Lloyd v Google decision. However, the courts have already shown that with opt-in claims, they can be flexible in relation to different types of claim. Group actions certainly aren't just for consumers or pressure groups. You only need to take a quick look at the list of group litigation orders that have been made to see that group litigation can work for a huge range of disputes, from claims arising out of data breaches to nuisance and financial mis-selling claims. The key issue is identifying the commonality.