Group Litigation Archives - EURO LIT INSIGHTS

“Dominant motive…lies in the financial interests of its backers”: High Court Strikes Out a Representative Action under CPR 19.8 by Passengers in 116,000 Delayed or Cancelled Flights

by Jack Thorne and Briana Walley | Sep 12, 2024 | Court Judgment, Transportation & Logistics, United Kingdom

On 2 September 2024, the High Court struck out an application for a representative proceeding under CPR 19.8 that had been brought against certain airlines for cancelled and delayed flights: Smyth v British Airways Plc & Ors [2024] EWHC 2173 (KB). The Court considered that the “same interest” requirement under CPR 19.8 had not been met and that the claim was motivated by financial recovery for the litigation funder, and not the interests of the would-be class. The case highlights the importance of a well-defined class and a suitable representative claimant in order for representative proceedings to proceed.

Background

Ms Claire Smyth had booked a flight with British Airways (BA) from London to Nice. A week before she was due to depart, the flight was cancelled. Under Article 7(1) of the EU Regulation 261/2004 (retained post-Brexit), Ms Smyth had the right to claim compensation against BA (who manages a portal through which passengers may claim compensation). However, Ms Smyth chose not to use the portal and instead brought a representative proceeding on behalf of her fellow travellers – not just on her flight, but anyone who had booked flights with BA or easyJet scheduled to depart from, or arrive at,

UK General Election: Anti-PACCAR Bill Torpedoed

by Jack Thorne and Harry Denlegh-Maxwell | May 31, 2024 | Legislative Update, United Kingdom

In a previous blog post, we discussed the introduction to Parliament of the Litigation Funding Agreements (Enforceability) Bill (the Bill), which was designed to introduce legislation that would reverse the outcome of the UK Supreme Court’s decision in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others.[1]

As we previously set out, the ruling in PACCAR was set to have significant ramifications for litigation funders, claimants and claimant law firms in the UK that rely on third-party funding, potentially threatening the financial viability of swathes of the litigation funding industry. In PACCAR, the Supreme Court held that litigation funding agreements that entitle funders to be paid a portion of any damages recovered (as opposed to a multiple of the investment made by the litigation funder) are “damages-based agreements”, as defined in the Courts and Legal Services Act, and are therefore unenforceable unless they comply with the relevant regulatory regime.

The Bill proposed amending s58AA of the Courts and Legal Services Act, to insert a provision that “an agreement is not a damages-based agreement if or to the extent that it is a litigation funding agreement”. A litigation funding agreement

Commercial Court Orders Disclosure in Wake of Fraud Summary Judgment

by Jack Thorne and Jonathan Robb | May 22, 2024 | Court Judgment, United Kingdom

In the case of Lowry Trading Limited and anor v Musicalize and ors [2024] EWHC 773 (Comm),[1] the Commercial Court demonstrated its willingness to use the various tools at its disposal to compel disclosure and/or the provision of information, particularly where there is a subtext of fraud.

Background

The Claimants operate investment businesses. They claim that Mr and Mrs Anderson (the Second and Third Defendants), acting through various limited companies (the other Defendants), made various false representations as purported concert promoters in order to obtain investment from them. In pursuing recovery of their investments, the Claimants allege claims in: deceit; unlawful means conspiracy; breach of contract; inducement of breach of contract; and breach of trust, as well as claims pursuant to certain guarantees.

On 21 October 2021, the Court granted freezing injunctions against the First, Fourth and Fifth Defendants preventing them from dealing with or disposing of assets outside of the ordinary and proper course of business (the Injunctions). The Injunctions further required the Defendants to notify the Claimants before dealing with or disposing of assets purportedly inside the ordinary and proper course of business, which notice requirements form the basis of the Claim ants’ present application.

On

Representative Proceedings | A Low Bar to the “Same Interest” Requirement?

by Jack Thorne and Briana Walley | Feb 11, 2024 | Court Judgment, United Kingdom

In Commission Recovery Ltd v Marks & Clerk LLP & Anor [2024] EWCA Civ 9, the Court of Appeal handed down one of its first decisions concerning representative proceedings following the landmark Supreme Court decision in Lloyd v Google. The Court of Appeal upheld the High Court’s decision at first instance and allowed a representative proceeding under CPR 19.8(2) to proceed, but also identified several issues that it noted will require careful case management in the future.

The underlying proceedings concern current and former clients of the two defendant firms, Marks & Clerk LLP (M&C), and its associated firm, Long Acre Renewals (LAC), alleging that those firms received secret commissions for referring clients of M&C to a third party. They allege that M&C and LAC are liable to account for the amount of those commissions. A special purpose vehicle, Commission Recovery Ltd (CRL), was incorporated for the purposes of bringing the proceedings and took an assignment of a claim from one of M&C’s clients, Bambach Europe. CRL is the representative claimant in the action.

Representative Actions under English Law

Under CPR 19.8, a Claimant can bring a claim on behalf of other persons where they have the “same interest” in