In brief
- The Supreme Court has dismissed an appeal by GLO follower claimants who sought to have their claims decided in line with a favourable test case decision, despite the legal basis for that decision having since been shown to be wrong.
- While a GLO test case decision generally binds all follower claims, the court retains a discretion to "order otherwise". That discretion is narrow: here, the court departed from the default position because the law had shifted so fundamentally that it would be unjust to decide the follower claims on a basis now known to be wrong.
- The decision illustrates when the court will exercise that discretion, and underscores the procedural benefits of the GLO regime.
What are GLOs?
Group Litigation Orders ("GLOs") are a procedural mechanism enabling the English courts to manage multiple related claims together, streamlining complex litigation, and ensuring consistency where several claimants raise the same or similar issues against the same defendant. Please see our discussion of the evolving GLO landscape.
When a GLO is made, a group register is established, common issues are specified, and one or more claims are typically selected as test cases, with the remaining "follower claims" stayed pending the outcome. Any judgment or order on the GLO issues is then binding on all other claims on the register, unless the court orders otherwise.
The court's discretion to disapply a test case decision from the follower claims is the crux of the Supreme Court's recent decision in AXA Insurance UK plc & Anr v Commissioners of Inland Revenue & Anr [2026] UKSC 24.
Background
The AXA proceedings were included on the group register established under the CFC and Dividend GLO, which was granted in 2003 in respect of claims concerning the lawfulness of certain tax provisions. Three test cases were selected from the group register to determine different common issues. The most relevant to the AXA proceedings was a claim brought by companies in the Prudential group. The AXA proceedings themselves were stayed until 2021, pending the outcome of those test cases.
Once the test cases were determined, the AXA claimants, as parties on the group register, argued that they should be entitled to rely on the decision in the Prudential test case.
However, between the decision in Prudential and the resurrection of the AXA proceedings, the law shifted significantly, effectively reversing the relevant parts of the Prudential decision on which the claimants sought to rely.
The central question for the Supreme Court was therefore whether the AXA claimants could rely on the Prudential decision, despite the law underpinning it having fundamentally changed.
The decision
The Supreme Court acknowledged the need for great caution in balancing two competing considerations when deciding to "order otherwise":
- the need to maintain the integrity of the GLO regime; and
- the need to decide a dispute on the basis of a correct understanding of the law as it stands at the time of the decision.
However, in the exceptional circumstances in which the law had changed fundamentally between the decision in the Prudential test claim and the lifting of the stay, the Supreme Court accepted that it would be inappropriate to decide the follower claim on a basis now known to be wrong in law.
The Supreme Court considered the following factors:
The lack of a legal basis
The Supreme Court noted that a challenge to the binding effect of a GLO test case judgment can only succeed where it is clearly established that the legal basis for that judgment was incorrect. It is not enough for a party to wish to re-litigate the matter on the basis of different arguments or to challenge the correctness of the decision after the test case has been decided.
Injustice
It must be unjust, in the specific circumstances of the particular GLO, for the court not to exercise its discretion. The key questions are:
- Whether disapplying the earlier judgment would result in re-litigation of the matter, i.e. further lengthy and costly proceedings. This may be a strong ground for refusing to depart from the default position.
- Whether follower claimants would suffer particular prejudice from not having been chosen as the test claimant, given that their own proceedings were stayed, sometimes for many years, with limited control over the progress of the test case.
Inconsistency
The court did not consider that any resulting inconsistency with the outcome in Prudential outweighed the injustice of holding the respondent liable on a basis known to be legally wrong. Inconsistency alone would not preclude the court from exercising its discretion, since the existence of that discretion necessarily contemplates different outcomes between the test case and follower claims.
Costs
The fact that the claimants were severally liable to the test claimant for common costs likewise did not outweigh that injustice, whether alone or in combination with other factors.
Implications
The judgment underscores how rarely the English court will exercise its discretion to disapply a GLO test case decision from follower claims. The Court acknowledged that GLOs vary widely in the disputes and issues they cover, making blanket guidance inappropriate. For example, had the decision led to a costly re-litigation, the Supreme Court may have decided in favour of the claimants.
In reaching its decision, the Supreme Court weighed the competing interests of finality and consistency within the GLO regime against the parties' right to have their dispute resolved according to a correct understanding of the law. While the latter prevailed in the AXA proceedings, the Court emphasised the value of the GLO regime in streamlining litigation, demonstrating support for the flexibility of the English procedural system in accommodating the various ways in which group actions can arise.