Class Actions

Conducting litigation can be a daunting experience and until recently a party was unable to join forces with others who have faced similar claims.

That has changed and since 31 July 2020, it has been possible to raise group proceedings (also known as class or mass actions) in Scotland. This means that 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 meant that group proceedings can be funded by success fee arrangements - which means that if there is no win, no fee needs to be paid. Coupled with the growing availability of litigation funding this means that people can raise claims, when in the past court costs would have been prohibitive.

Group proceedings in Scotland were also introduced to try and 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 action lawsuits resulting in billion-dollar settlements. There are some differences in the Scottish approach. In the United States, class actions are opt-out proceedings. This means that 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 & Wales, class actions are usually “opt-in” (the express consent of each member of the group is needed) but it is also possible to bring opt out proceedings. Collective proceedings on an opt basis can be raised in the Competition Appeal Tribunal. This has been used to bring claims against high-profile companies such as Apple.

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

For individuals, the availability of class action type proceedings in Scotland gives them the opportunity to raise a claim. For businesses, it could mean there is 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 are predicted to become more prevalent. For example, recently, a group litigation has been raised against Severn Trent Water in England & Wales in relation to allegations of failures to report pollution incidents.

Group proceedings are still very much in their infancy in Scotland and with the inability to raise opt out proceedings, it may mean that 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 in fact 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 given the limited number of active claims, albeit we note one major group litigation has settled out of court. Until the issues of costs and allocation of damages are judicially determined, it may mean claimants are reluctant to opt in.

This article was first featured in The Scotsman.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2023. Specific advice should be sought for specific cases. For more information see our terms & conditions.