New class action procedure in Scotland
A new group claims procedure will come into force in Scotland on 31 July this year.
Together with the introduction of success fees and other changes in relation to funding of litigation and legal costs, this package of changes is likely to have a significant impact on consumer actions in Scotland. We predict an upturn in the number of claims which are raised. Indeed the aim of the changes is to make it easier for claims to be brought.
Any sectors that are consumer facing may be affected by these changes, which could include:
- medical devices
- financial services
- consumer products
- travel and tourism
- environment and health
- and any business dealing with personal data.
Group claims could be brought against businesses with operations in Scotland and companies selling services or products into Scotland.
- The procedure will be opt-in.
- A representative party will bring the proceedings. They have to be authorised by the court, and the intended defendant (called defender in Scotland) will have an opportunity to respond to the application.
There are suitability criteria set out in the rules, including any special abilities and relevant expertise of the applicant; any interest the applicant has in the proceedings and any potential benefit they will obtain; and demonstration of sufficient competence to litigate the claims properly, including financial resources to meet any costs awards.
- A Group Register of claimants (called pursuers) must be filed alongside the representative party application.
- There is a separate application required for permission to proceed as a group. Again the proposed defendant will have an opportunity to respond, although the court can approve the group without a hearing.
The group of claims must raise issues of fact or law which are the same as, or similar or related to, each other. The representative party must also demonstrate that they have made all reasonable efforts to identify and notify all potential members of the group about the proceedings.
In addition the court will interrogate whether there is a prima facie case and some real prospect of success, and that proceeding as a group will be more efficient than as separate claims.
- There is provision for a stay of proceedings of 28 days (with option to extend) at this stage of the procedure.
- No clear timescale is given for a defence to be filed, and so it appears to be left to the discretion of the judge to decide (unless this is an inadvertent omission that will be corrected).
- A preliminary hearing will be scheduled for 14 days after a defence is filed. Beyond this, the next substantive part of the procedure will be in the form of a case management hearing.
- It appears possible to add group members without permission up until the point at which a trial is fixed.
- There is no exclusion of claims that have arisen before these new rules come into effect.
There remains a large degree of uncertainty as to how the new procedure is going to function in practice, particularly given the desire not to create a comprehensive new set of rules but rather only to deal with key aspects. It is likely there will be a fairly diverse model of how group proceedings run, given the wide case management powers granted to the court. To a great extent it will depend on the capacity of the court to proactively case manage to achieve the stated aims.
There are also a number of issues that remain unclear, such as:
- will it be possible to aggregate lower value claims in order to proceed as a group, given the procedure only applies in the higher tier civil court in Scotland;
- how easy will it be for consumers outside of Scotland to participate;
- can companies join in group proceedings;
- and how will costs be dealt with amongst the group.
The new rules can be viewed here.
Please get in touch with any views on the rules, we would be very interested to hear your thoughts.
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