The Business and Property Courts have always had to deal with the challenges of managing multi-party actions. In the absence of a class action system in England and Wales, parties to litigation have long been looking for innovative ways to use the existing procedural framework to pursue or defend similar claims in an efficient and cost-effective fashion.

Elaina Bailes

Elaina Bailes

The Commercial Court has recently developed an initiative of active case management of ‘test and grouped cases’ (as described on its website) where similar facts or common legal issues are engaged. The website describes the court as seeking ‘to actively manage suitable sets of cases either via a test case or a sub-list of cases where linked cases can be managed together’ .

This began with cases concerning business interruption insurance (BII) coverage for Covid-19, but has now expanded to other categories of case:

  • Covid BII claims: claims relating to BII and whether claimants’ insurance policies cover the shutdown of businesses during the lockdowns in 2020 and 2021.
  • Other Covid-related cases: claims related to non-BII Covid insurance issues.
  • Italian swaps cases: the court is jointly managing claims relating to swap transactions entered into by an Italian region, and notes there are cases involving other regions engaging similar issues.  
  • Russian aircraft leasing claims: claims on ‘contingent and possessed’ insurance policies brought by lessors of aircraft (and/or aircraft equipment, such as engines), alleging loss of assets leased to Russian airlines since the invasion of Ukraine.

Most of the cases relate to insurance coverage, where it is easy to see how the effects of a global event will engage similar, but not identical, legal questions depending on the policy wording and individual fact pattern. But it is noteworthy that the Italian swaps cases are included, indicating that the court is prepared to employ this case management method in a range of scenarios.

The court’s wide range of discretionary case management powers is found within Part 3 of the CPR. Specifically, CPR 3.1(2)(h) and (m) enable the court to try two or more claims on the same occasion, and take any other step or make any other order for the purpose of managing the case and furthering the overriding objective. These powers are intended to enable the court to manage and resolve cases efficiently, effectively and justly, ensuring swift and fair resolution while reducing costs.

One novel mechanism that has been used in the above cases is the court’s direction that the test and grouped cases should be determined either in a consolidated or concurrent trial, or consecutive hearings. Other procedures are more familiar, such as appointing a designated judge to all of the cases in a category.

The orders made in the test and grouped cases have been framed around the desirability (in principle) for common issues to be determined together, whether in consolidated or consecutive hearings.

Interestingly, the court has seen the need to take this proactive approach at an early stage, once it has become aware that more than one claim has been issued and where it expects more to come.

For example, in relation to the Russian aircraft claims, the court emailed court user groups and published statements in advance of a case management conference fixed in March 2023 in one set of proceedings. The court asked persons or entities who would be interested in participating to get in touch with the court in advance. The March hearing ultimately involved issues related to five sets of proceedings.

This is a departure from procedure in a standard case where case management issues would not be presented to the court until the first case management conference, which generally takes place after close of pleadings.

Another interesting point is that this active case management is taking place under the court’s general case management powers, without reference to the specific provisions in the CPR for joint management of claims concerning similar issues. Examples most relevant to the commercial sphere are:

  • Group Litigation Orders (GLOs) under CPR 19.22, which provides for group case management of claims where common facts or legal issues are engaged. This is an opt-in group action, where any claimants who have an interest need to actively join the claim.
  • Representative actions under CPR 19.8 (formerly 19.6), which can be used when more than one person has the same interest in a claim. This is an opt-out action – the representative pursues its claim and other members of the class would qualify to benefit from a judgment (though a non-party requires court permission to enforce a judgment).

Both GLOs and representative actions have often been unattractive to commercial parties for many different reasons. Compared to parties in other spheres, where group actions are common (for example, consumer claims or mass torts), commercial parties:

  • tend to want autonomy in the conduct of their claims;
  • are not necessarily reliant on the economies of scale of consumer group actions, for example; and
  • have commercial interests that they wish to keep confidential (within the parameters of open justice).

The Commercial Court’s initiative appears to try and plug this gap – recognising that commercial parties may prefer to issue their own claim than wait for a representative to pursue it, or to be swept up in a large litigation under a GLO. Indeed, one of the lessors in the Russian aircraft claims opposed the prospect of a concurrent ‘mega trial’, suggesting it could be a ‘procedural nightmare’. However, there are clear advantages available to parties if costs can be shared and proceedings can be expedited. Concurrent complex claims may also lead to technological innovation to help manage the increased administrative burden. One can also see that this flexible method of group case management could also be attractive to parties in growth areas of group litigation, such as securities litigation and ESG claims.

 

Elaina Bailes is a committee member of the London Solicitors Litigation Association

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