The jury’s out on whether class actions will take off in Scotland - Louise Chopra

Conducting litigation can be a daunting experience and until recently a party was unable to join forces with others who have similar claims. That has changed and since 31 July 2020, it has been possible to raise group proceedings (class or mass actions) in Scotland. This means two or more people with the same, similar or related claims can raise court proceedings in a single court action.

The main benefit of a class action is that it allows people (often consumers) to club together to raise a claim which might have been too expensive for an individual. When group proceedings were introduced in Scotland, new rules in relation to civil litigation funding were introduced at the same time. This means group proceedings can be funded by success fee arrangements – if there is no win, no fee needs to be paid. Coupled with the growing availability of litigation funding this means people can raise claims, when in the past court costs would have been prohibitive.

Group proceedings were also introduced to try to resolve cases quickly and efficiently, especially when a high number of people have a similar claim against the same party. Whilst these types of claims can only be raised in the Court of Session and there is a requirement to obtain permission, once certified and if defended, the case will be managed by the same judge with a clear focus on parties working together to narrow the matters in dispute.

When considering this type of litigation, what usually springs to mind is American class actions and billion-dollar settlements. There are some differences in the Scottish approach. US class actions are opt-out proceedings; a claim can be raised by a party for a whole group without each person’s express consent (or even knowledge of the claim). Australia also has a well-established class action market and uses the opt-out mechanism. In England and Wales, class actions are usually “opt-in” (the express consent of each member of the group is needed) but opt-out proceedings are possible.

Louise Chopra is a Partner, TLT

The legislation that introduced group proceedings in Scotland intended that these could be opt-in or opt-out claims or a hybrid. However, court rules subsequently introduced only allowed for opt-in claims. It remains to be seen if this will change, particularly as there is express provision in the legislation for group procedure to be reviewed in 2025.

The availability of class action-type proceedings in Scotland gives individuals the opportunity to raise a claim. For businesses, it could mean more risk of being sued. The types of claims seen in Scotland to date are personal injury and product liability claims. Data breach and environmental claims are also suited to class actions and these types of claims could become more prevalent. For example, recently, a group litigation has been raised against Severn Trent Water in England and Wales in relation to allegations of failures to report pollution incidents.

Group proceedings are still in their infancy in Scotland and the inability to raise opt-out proceedings could mean it is more difficult (and possibly less attractive for those representing claimants) to raise proceedings here. There certainly hasn’t been a deluge of group proceedings in Scotland. There have only been three cases so far and permission for proceedings hasn’t been granted for any new group proceedings since March 2022.

As such, it is difficult to gauge the success of the introduction of group proceedings in Scotland. Until the issues of costs and allocation of damages are judicially determined, it may mean claimants are reluctant to opt in.

Louise Chopra is a Partner, TLT