A Victory for Social Justice?

To most people in the UK the mention of a a class action lawsuit immediately conjures up images of large-scale cases in American courts, usually against a large corporation.  Previously regarded as a means for ambulance-chasing law firms to line their pockets, public perception and opinion of group or mass action cases has been changing over the last year.

Although there is difficulty in managing a large group of claimants, mass action cases are increasingly making headway in the English legal system.  Litigation funding is less and less regarded as shady, and instead its funders are presenting themselves as champions of social justice, driving the need for change in how group litigation is controlled.  2021 has seen approval for several mass action lawsuits to proceed, including one involving 46 million consumers against Mastercard, and another where 200,000 Brazilians are taking action against BHP.

Third-party funding for such litigation is now regarded as more acceptable, whereas it was previously thought that such cases were brought by funders for their own benefit, rather than to ensure justice is sought for the injured parties.  “Litigation funding used to be a bit of a dirty word, based on the idea that the cases were just brought by funders to fill their pockets,” says Andrew Nugent Smith, managing director at Keller Lenkner UK.

There is an issue when it comes to competition between which firms represent claimants; in 2016 Harcus Sinclair LLP was approached by Your Lawyers Ltd to collaborate in the case against Volkswagen.  Harcus Sinclair agreed to collaborate, but after signing a non-disclosure agreement they started to recruit their own claimants, submitted their own claim form, and started to work with Slater Gordon.  In the USA and Canada, where class action suits have been more common for years, this sort of inter-firm conflict is less common, where firms tend to be more cooperative in such litigation, and there are provisions in place that resolve competition.

How funding is managed for large scale claims is an area of concern, and it will require modernisation in the not too distance future.  It can be a bitter pill to swallow for claimants who lose a good portion of their damages to cover their funding agreement.