press release
Rise in Group actions from US based Groups predicted
21 April 2009
UK courts have little appetite for ‘class actions’
A recent court case (Emerald and others v British Airways) could be
the spur that prompts UK claimants, eager for justice in the wake
of the credit crunch, to bring ‘class actions’ against high street
banks and other institutions, using the US legal system. The claim
comes from Nichola Evans, specialist insurance lawyer at Browne
Jacobson, who believes that disgruntled investors may be forced to
adopt US attorneys to bring cases against UK businesses in the wake
of claims of financial mismanagement.
Citing the recent case of flower importer, Emerald - which
sought damages from British Airways, claiming it operated a cartel
with other airlines – Evans believes that the UK system is not
ready to accommodate US-style group actions.
She said: “In the Emerald case, the business wanted to bring
what was effectively a group action against BA, along with other
businesses it claimed were affected by the alleged cartel. The
judge struck out the representative part of the claim as he felt
that the difficulty in this case was that the "criteria for
inclusion in the class depends on the outcome of the action itself.
In other words, he was unwilling to hear a case, where the
definition of the class rested on the eventual outcome.
“This is a complex area of the law and rests on CPR Rule 19.6,
which governs the situation where claimants seek to bring a
representative claim. The case shows a reluctance to allow
representative actions in accordance with this section of the CPR
Rules. The judge in this case commented that this matter might
better be dealt with by Parliament rather than stretching the
meaning of the current rules.”
This case is at odds with the way in which it has generally been
intended that representative claims could be brought and shows that
the English system is not developing in the same way as that in the
US for these types of claim.
She continued: “Even where a claim has been brought, for
instance the Which? campaign over football shirts, there are still
concerns as to whether they were cost effective and worthwhile.
This may explain why it has been mooted that group claims arising
from the credit crunch are more likely to be brought in the US and
the news last month that Cherie Booth QC was to represent two local
authorities trying to bring a case in the US adds weight to this
argument.”
According to Browne Jacobson, this development presents the UK
government with a difficult balance to strike. While access to
justice is a perennial issue that causes much debate, the
ever-growing influence of the compensation culture is of concern to
both the government and the legal profession.
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