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All for one and one for all - is this the impact of the new Scottish Group Proceeding Rules?

  • Legal Development 16 juillet 2020 16 juillet 2020
  • Royaume-Uni & Europe

  • Litiges commerciaux

The Court of Session has introduced new rules which, for the first time, enable two or more parties with the same, similar, or related claims, to raise proceedings in a single action in the Court of Session. They come into force on 31st July 2020.

All for one and one for all - is this the impact of the new Scottish Group Proceeding Rules?

Act of Sederunt (Rules of the Court of Session 1994 Amendment) (Group Proceedings) 2020

The Scottish Civil Justice Council has stated that the rules will be "particularly useful in cases where lower value claims are considered too costly for individuals to raise separately", giving an indication of the types of cases where these rules will be used. The introduction of the rules also signifies an effort to make the Court of Session more financially accessible, and indeed this was the principal aim behind the legislation.

Key provisions

  • There must be two or more claims which are the same, similar to, or related – whether by issues of fact or law.
     
  • This is an 'opt-in' procedure. This means that a successful outcome in a group action cannot be relied upon by those who did not opt-in to be part of the proceedings. Likewise, those who have not opted-in will not be bound to accept a settlement and can raise their own proceedings if they wish.
     
  • One party must be appointed by the court as the representative party of the group. There are various requirements to be met including that they must demonstrate sufficient competence in respect of the litigation and that they would act fairly and adequately in the interests of the group. Usually, although not necessarily at the same time, this party must also apply by motion for permission to bring group proceedings. This includes asking for "such advertisement as the Lord Ordinary thinks fit" – to reach out to potential group members. The representative party will then lodge the summons and a group register (a record of all group members). When the group register is then served on the defender, proceedings are deemed to have commenced.
     
  • 14 days after defences have been lodged, a preliminary hearing must be fixed. At that hearing, the judge will determine whether the pleadings need any further specification and can make a variety of orders concerning the pleadings, witnesses and documents. A case management hearing will also be arranged. Each party must lodge a written statement of proposals for further procedure 14 days in advance of the case management hearing.
     
  • The representative party must consult with all group members on any proposed settlement terms.

Impact

These new rules should save court time and parties' money. The obvious significant benefit for pursuers is lessening the financial burden of bringing individual actions in the Court of Session. For defenders, an advantage is the opt-in procedure. This gives defenders knowledge and reassurance regarding the size and scale of the action. The legal costs of one action should be significantly less than the combined costs of many separate actions.

On the flip side, group proceedings may create a risk that claims will proceed where they would have had no merit on their own and discrete issues may be missed. Similarly, group proceedings reduce the ability to provide individualised representation or outcomes. 

Inevitably some aspects of the rules will become clearer in practice.

What qualifies as sufficiently similar or related will be explored by the court. We also expect the court's level of involvement in case management and the logistics of coordinating group proceedings to be clarified through use. However, given the objectives behind the rules, we anticipate that the court will be as accommodating as possible.

Our experience of group-type litigation prior to these provisions is that numerous firms can be involved for pursuers. Thus, there may be multiple applications to take on the role of representative party and we expect to see some competition between claimant firms.

Finally, the SCJC has said that it will be continuing work on an opt-out procedure. This would mean a claim can be brought on behalf of an unlimited group of people; if the claim is successful the award will be available to the entire group unless they actively chose to opt out of the proceedings. This will be an area to keep a keen eye on, particularly for defenders.

Fin

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