Can Class Actions get off the ground in the UK without technology or funding?
Earlier this month FinLegal, in association with litigation support services provider Sky Discovery, ran a webinar on the current state of the UK class action marketplace. The speakers concluded that, while it is theoretically possible to run a class action without technology or funding, it won’t be a viable option for much longer.
The market
The UK class action regime has been slowly developing since 2000 and has received a boost by the 2015 creation of a competition-based collective action regime litigated at the Competition Appeals Tribunal (CAT), said speaker Lucy Pert, a commercial litigator at Hausfeld LLP.
While that’s the only dedicated class action regime, the High Court can, and does issue group litigation orders for claims involving multiple people. Lawyers have been innovative, and group actions are increasing in popularity for number for a variety of reasons. Why so?
“Some of this is really it's really quite obvious: the costs of litigation are very expensive, and if you want as an individual to take your claim to the High Court, it’s not worth doing that unless you're famous of a very high value,” she said.
“But when you have a number of different people who have suffered a small amount of harm, people are grouping together to bring to bring their claims in in a commercially viable way.”
Also “there is a growing activism on the part of consumers. Consumer groups are getting more active, and individuals are getting more aware or the rights.”
Consumers are starting to look towards the established class action regimes abroad and would like to see the same thing happening here.
And, importantly, new ways to fund litigation and make it less expensive to run has opened up the market significantly. “Technology can really assist,” she said.
Tech as an enabler
“We really see the benefit of the efficiency created by technology,” said speaker Andrew Nugent Smith, a commercial litigator and Managing Director of law firm Keller Lenkner UK.
“Tech is a great enabler. It drives efficiencies and it is the only feasible way to manage the sorts of numbers we have in modern [group actions]” which might have “tens, if not hundreds of thousands” of claimants.
“In the last few years, with the advent of large group actions, we have seen an exponential development or technology, in particular focused on the client journey. The starting point these days is to create as digital a client journey as possible: no manual review if we can avoid it, not paper: a client experience that works for clients but requires limited human interaction.”
Law firms aren’t used to spending large amounts of money on technology, but, when the cost is used on mass claims “the technology cost per client actually becomes very, very cheap,” he said.
So, while claims have been run in the UK without dedicated technology, using it slashes costs.
Claims funding
This is important, said speaker Susan Dunn, the founder of Harbour Litigation, the world’s largest privately-owned dedicated litigation and arbitration funder.
“When you start to have the ability to sign claimants up for £10 a head, it starts to make claims viable” that wouldn’t otherwise have got off the ground.
“Let’s be clear: judges want to see that too,” she said. The legal system is set up to provide redress to properly-litigated cases.
Lawyers may be wary of new technologies because they are unused to them, “it’s like taking the car to the garage,” she said. “Much of it is confidence… but none of this is rocket science.”
“A class action is really a legal claim with a large amount of claimants, there is just an extra administrative element that we need to make sure is done cost effectively, so we don’t spend large amounts of money on it.”
Genevieve Quierin, a commercial litigator at Stephenson Harwood, said she has been embracing new tech innovations.
“Technology is absolutely indispensable,” she said. “I’ve spent long hours, days, weeks book building claims in the past.” The new systems the firm is implementing make claims administration "much more straightforward,” she said.
Firms that don’t use new technology may find it difficult to get funding, Susan Dunn warned.
“We are now starting to insist on law firms using it, and we won’t accept people saying, ‘we’ve got a bunch of paralegals with Excel spreadsheets doing this on phone at the cost of £100 a head.”
“That’s not good enough. It makes it ten times more expensive to sign up new claimants… I think that we are going to see law firms showing off more about how well they understand technology.
“That would be a good thing, in my view.”
To access a recording of the webinar, click here.