The Court of Appeal has delivered a judgment on the representative action procedure pursuant to CPR 19.6 in Jalla & Anr v Shell International Trading & Anr  EWCA Civ 1389. The judgment confirms that—save for limited exceptions—the collective action regime in the High Court operates on an "opt-in" basis and, subject to the eagerly anticipated judgment from the Supreme Court in Lloyd v Google, the scope for "opt-out" actions outside the Competition Appeal Tribunal (CAT) remains limited.
What was the case about?
The Defendants are said to be legally responsible for an oil spill off the coast of Nigeria in 2011. The two claimants named in the action were occupants of land allegedly affected and sought to pursue their claim under the CPR 19.6 representative action procedure. They brought the claim for themselves and on behalf of the "represented parties". This was purported to include more than 27,800 individuals and 457 communities comprising coastal and inland areas said to be polluted by the oil spill and spread across an area the size of Belgium. The initial claim sought, amongst other things, damages for the represented parties in their individual capacity and an order requiring the defendants to take remediation measures to address the environmental impact from the oil spills.
At first instance, the judge found that the claimants did not have the "same interest" as required by CPR 19.6. In particular, the judge found that issues such as causation and the necessary individual evidence of damage were an integral part of the requisite assessment by the court. As such, it could not be said that the claimants had the "same interest". Instead, the court concluded that the claim before it represented a very large number of individual claims requiring individual consideration and proof of damage and the generation individual defences. The claimants appealed.
What did the Court of Appeal hold and why is it significant?
Coulson LJ, delivering the leading judgment, upheld the decision at first instance, holding that the "same interest" test had been correctly applied. We consider below four talking points arising from the judgment:
- The lack of impediment presented by the pending Supreme Court decision in Lloyd v Google: The timing of this Court of Appeal decision, with the Supreme Court decision in Lloyd v Google still pending, could reasonably have thought to have hampered the Court of Appeal's ability to rule on CPR 19.6. It didn’t. The Court was happy to proceed on the assumption that its previous decision in Lloyd v Google was correct, in part because this represented "the high water mark of the appellants' case". In other words, the appellants' case that their claim was "materially indistinguishable" from Lloyd v Google was incorrect, with the Court agreeing with the first instance judge that the present case was in fact quite different.
- The right procedure for the right facts: Coulson LJ considered what CPR 19.6 is intended to achieve, noting the objectives of saving time and cost and the avoidance of procedural complexity. The Court further noted that, on the findings made by the Court of Appeal in Lloyd v Google, that case was "a paradigm example of a representative action" as "the representative had the same claim as the 4 million he represented, which gave rise to the same damage and in respect of which Google would have the same defences". As Coulson LJ put it, "instead of 4 million claimants, there was one, with the result of his claim then binding the 4 million".
Coulson LJ observed that some pollution cases could also be well-suited to proceeding as representative actions. He gave the example of a group of residents seeking an injunction to prevent emissions from a chemical plant, noting that was a case where it would be "overwhelmingly likely" they will have the same interest in the claim. This is to be contrasted, however, to an example where the residents have claims for different personal injuries arising from the pollution caused by the chimney. In such a case, the "same interest" requirement is much less likely to be met, and other vehicles for group litigation –such as GLOs—will be more appropriate. In the present case, Coulson LJ held that none of the purposes of CPR 19.6 could be achieved by allowing the case to proceed on a representative basis, and throughout the judgment there are various criticisms of the procedural vehicle through which the claim was brought, with the Court noting it was "the subject of perfectly workable litigation", but that it was just "not possible to categorise it as a representative action under CPR 19.6".
- The Court's willingness to hear large scale environmental claims and considerations of access to justice: The appropriate procedural mechanism for advancing group claims also featured in noteworthy comments from the Court in addressing its apparent unwillingness to deal with multi-party environmental claims, with Coulson LJ stating that such a suggestion "could not be further from the truth". The Court held that the issue before it was whether the particular proceedings were appropriately constituted as a representative action and that, on a proper analysis, the present case was not, and never could be, a representative action.
The submissions made about access to justice were similarly given short shrift. The appellants submitted that there were only two ways in which this litigation could have been progressed: either by way of a GLO or a representative action. The submission was that, if the Court did not allow the appeal, in circumstances where there was no GLO, the appellants (and more particularly, the represented parties) would be denied access to justice. The Court disagreed and found "these proceedings could (and perhaps should) have been brought by way of a GLO", noting further that if there "is a problem now because the claim form was only issued in the name of the two appellants, that is of the appellants’ and the represented parties’ own making; it is not a question of access to justice".
- The potential implications of discrepancies in collective action procedures across courts: Should a group of claimants who have suffered a particular wrong, such as tortious environmental pollution, have a different (and more restrictive) procedural menu available to them than, for example, a group of claimants seeking redress for a breach of statutory duty for a competition law infringement?
That question arises because one of the current idiosyncrasies with the collective actions regime in England and Wales is the difference in approach between the proceedings in the CAT and outside it. In November 2008, the Civil Justice Council (CJC) recommended that the reforms leading to the collective action regime in the CAT should lead to a generic collective action procedure available for all civil claims on an opt-in or opt-out basis. This suggestion was, however, rejected by the then incumbent government in favour of sector-by-sector reform where required. Such a sector-by-sector reform has yet to materialise.
It remains to be seen how the Supreme Court's decision in Lloyd v Google will expand (or not) the opt-out regime outside the CAT. However, if the Supreme Court disagrees with the Court of Appeal and finds that the same interest requirement has not been met in Lloyd v Google (a "paradigm example" of the sort of claim involving significant numbers of claimants), this would arguably raise questions of access to justice for particular classes of litigants. It would also reintroduce a debate as to whether a generic collective action procedure, available for all civil claims on an opt-in or opt-out basis as originally advanced by the CJC, should be reconsidered.
For now though, outside the CAT, the procedural mechanisms remain, and as the judgment in Jalla demonstrates, these largely operate on an "opt-in" basis, with limited scope for "opt-out" actions. Claimant groups looking to bring mass environmental tort claims, or any collective action where issues of causation, limitation, potential defences or damages may diverge amongst the claimant group, will need to consider other procedural mechanisms such as a GLO.
For more detail on collective actions generally in the English courts, see our Quickguide.
Author: Tim West (Senior Associate)