Group litigation in Scotland – a year in review

Joanna Fulton
Burness Paull LLP, Edinburgh

joanna.fulton@burnesspaull.com
 

Last year (2023) was the year that collective proceedings really got off the ground in Scotland, and this theme has continued into 2024.

This ‘class action’ style process was introduced in 2020 in the thick of the Covid-19 pandemic. It takes elements from different jurisdictions, with the principal features being:

• it is an opt-in procedure only (although the underlying legislation foreshadows an opt-out approach in the future);
• it requires commonality between claims, but the test is fairly flexible (same, similar or related issues of fact and law);
• it runs in the name of a ‘Representative Party’ (RP) who can be an affected claimant or, alternatively, a third party;
• permission to proceed as a formal group has to be given by the court at the outset; and
• claimants outside of Scotland can in principle be involved, if there is a basis for jurisdiction.

The first group to run under the procedure was in 2020 against Volkswagen Group in relation to diesel emissions claims. A second high profile group, proceeding against Celtic Football Club with claims relating to historic abuse involving its youth division, settled last year. The pace has picked up since then.

The biggest and most active action has been the more than 1,000 strong claim against James Finlay, a subsidiary of the Swire Group that owns and operates tea plantations in Kenya. The claim is brought by Kenyan tea pickers alleging musculoskeletal injuries. The proceedings have been mired in a jurisdictional battle since 2022, only resolved by an appeal court decision in November 2023 in favour of the company. This means the case will not, subject to any appeal to the UK Supreme Court, proceed in Scotland (but see below).

The London courts have become used to dealing with such ‘out of jurisdiction’ claims in recent years, for instance in relation to environmental contamination/pollution outside the UK against global corporations with a UK presence. Does the Finlay case show the Scottish courts are unwilling to act as a forum shop? It is really too early to say. The Finlay decision turned on the wording of applicable Kenyan legislation; the Scottish court was clearly sympathetic, and the appeal court left the door open for the claimants to return to Scotland if needed in due course. A ‘yes’ vote is foreseeable on different facts.

Scottish courts are now dealing with a wave, both current and prospective, of diesel emissions claims against a number of car manufacturers. Permission was granted in the second half of 2023 for group claims against BMW, Opel (part of Stellantis) and Mercedes to proceed, and yet more are waiting in the wings.

What does all this tell us? 

We can predict a continuing upward trend in the numbers of ‘class actions’ in Scotland. Other group claims are being advertised.

The courts also seem keen to use the new procedure. At the time of writing, permission has been granted in every application made so far. The bar to achieve commonality does not appear to be set very high, nor the evidence required to demonstrate this.

Similarly, the bar is not being set high for courts to approve the proposed RP. A list of considerations is applied, but so far in a benign manner. Funding of the RP has been a considerable focus, and we are likely to see significant debate continue around this, but it has not yet led to onerous disclosure or rigorous interrogation. The identity of the RP has also been a subject of debate, and in the majority of cases a class/group member has been selected as a figurehead.

Other than at the very initial stages, the procedure is largely at the discretion of the presiding judge, applying whatever case management tools they consider appropriate. This is not in substance different to what was available historically. This continues to provide flexibility of approach, albeit potential difficulty in predicting the likely process and timelines.

The Scottish courts are not keen to defer to England even where similar issues are being or have been litigated in England. Albeit not a formal group under the new procedure, one recent example is in the Metal-on-Metal hip litigation. No claims are being pursued in England following the decision in Gee v DePuy in 2018 and a separate UK Supreme Court decision in 2022. Despite this, the Scottish courts are entertaining ‘another bite at the cherry’.

In short, we can assume that group actions are going to be an increasing risk for corporates operating or selling in to Scotland.