Safety in Numbers

New rules permitting group proceedings (class actions) to proceed in the Court of Session come into force today, 31 July 2020.

Procedure

Part 4 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (“the 2018 Act”) provides that two or more people with the same, similar, or related claims can now raise court proceedings in a single court action.

The 2018 Act provides a mechanism for both “opt-in” or “opt-out” procedures. The “opt-in” procedure provides that all members of a group will have to give their express consent to be part of court proceedings. However, the “opt-out” procedure automatically groups all the individuals together unless and until they choose to leave the group.

It is the "opt-in" rules that are being brought into effect initially. The “opt-out” procedure may follow later.

The outcome of the court action will only apply to those who are signed up to the class action, so a successful outcome cannot be relied on by anyone who is not a party to the group.

Effect

The group proceedings rules aim to make it easier for groups of individuals to raise court proceedings. It is likely that we will see groups of claimants pursuing claims that they would not otherwise have been able to. The cost of litigation can be onerous for an individual claimant, particularly with a low value claim.

The introduction of group proceedings may not be welcomed by potential defenders. The type of group claims could be very wide-ranging and cover any number of sectors. Any organisation with an element of customer contact may well see an increase in the number and value of claims raised against them. Multiple individual claims, even with low level losses, can add up to a significant award of damages where the group of claimants is large.

As with any new rules, we will have to wait to see how they work in practice.

How can we help?

If you have any queries in relation to any of the above, MacRoberts' Commercial Dispute Resolution team is available to assist, so please do not hesitate to contact our team.

Latest updates from @MacRoberts