Pulling together

The reforms of Lord Woolf were intended to make the courts more accessible to individuals, particularly in smaller claims and in the absence of legal aid. There is strong debate as to whether that has been achieved; certainly in relation to access given to large groups of consumers, there is no cohesive and predictable process that ensures consumers can enforce their rights before the courts in collective actions.

Despite ten years of promise that consumers would find the courts considerably more accessible to common claims raising similar issues and reliefs, allowing small claims to be brought together, it remains an ad hoc process developed from case to case.

Group litigation orders (GLO) were intended to produce a predictable process for groups. They have failed, remaining unpopular with litigants and the judiciary. Few GLOs are made '“ the Ministry of Justice website suggests there were just two last year and one so far this year.

Conversely, there is significantly more interest in individual claimants clubbing together to spread the cost and risk of litigation. Solicitors who take on these cases do so by adapting existing practices to cope with the process of organising and administering the group.

To the extent that groups are organised by solicitors offering conditional fees and ATE cover, proposals to remove recoverability of success fees for CFAs and the ATE premium may halt the increase in collective actions seen in recent years. Proposed contingency fees may assist but only for a mass of claims of considerable value. Claims management companies may take up some slack but that market may itself be affected by a ban on referral fees.

Despite the lack of any particular model for groups, solicitors appear to adopt a relatively common practice in organisation depending on the group size.

Establishing a web presence

There are no ready methods of recruiting to a nascent group. The press and other media can assist but interest, if any, tends to be short lived. The internet offers the most effective communication between individuals and, in due course, between a group and its lawyers. This can be organised in many ways from simply establishing a web page to a fully interactive secure bulletin board. If proceedings are commenced the web also provides the means of communicating with clients. Even if part of the site is secure, however, that security cannot be trusted; passwords are passed on and the opposition may gain access to the secure site. Thus, information posted is fairly bland even within a secure section. Nonetheless, the internet is a major tool in organising the group.

Building an organisation

Very large groups are impossible to manage unless there is a core organisation within the group from which you can take instructions and, vitally, which has the authority to settle the claim. There are usually a few leading personalities with the time and apparent commitment to form a committee to lead the group.

An association will be formed to elect the committee, and the association rules will include delegation of authority to the committee. Some groups, such as solicitors, are nervous of delegating any authority to anyone, but without proper authority it is difficult to run the litigation and resolve the dispute.

Some groups and committees can become quite political. The association rules and the committee must cater for this. They also need to consider different interests in outcome. Individuals often have different perspectives ('wanting the day in court') compared to corporations looking for early resolution. These interests must be reflected within the structure of the organisation.

Funding

Everything turns on funding: no funding, no claim. Almost the first question posed to a group is how any litigation will be funded. Funding must be capable of seeing the claim through to trial if there is no earlier resolution. This can be arranged in a combination of solutions; working with a group is not in principle much different from representing any client.

ATE and third-party funding

The first concern for individuals is to cover the downside. This usually means ATE cover either on a paid premium or a deferred and contingent premium. Growth in the latter buoyed by recoverability of the premium has greatly assisted the representation of groups of individual consumers and shareholders. Some within the group may have BTE cover which complicates matters but usually the relationship in the litigation between BTE and ATE cover can be squared.

Subject to insuring the downside, how will other costs and disbursement be paid? The major disbursements are likely to be experts' and counsel's fees. Counsel may be willing to enter into a CFA; experts need paying as the case progresses. Solicitors may undertake work on a CFA but now in commercial claims the norm is swinging towards a mixed agreement where part of the fee is conditional and the remainder is paid as the case progresses. In very large groups or small groups with large losses, self funding may be an option but for large groups there has to be a well-organised collection process. It is important to obtain as much as possible upfront when interest remains high. It will be increasingly hard to collect from all as the case proceeds.

Third-party funding may be a possibility. Purely anecdotally, third-party funders appear little interested in funding groups of consumers or large groups, tending towards small commercial groups with high-value claims. The growing body of funders is, however, always looking for business.

The important point on funding is to organise matters and make it plain to opponents from the outset that, through a combination of funding options, the case can be seen through to trial.