Mass claims

We predict in 2022 the wave of anti-trust class action claims will continue to pick up pace, with at least four being certified in the UK.

Why?

• 2021 has seen the first three anti-trust opt out class actions certified in the UK, following the Supreme Court decision in Merricks v Mastercard [2020] UKSC 51. We predict more will follow with many sectors being affected.

• The regime has been in place since 2015 but had stalled pending the Supreme Court decision in Merricks.

• The decision lowered the bar to certification for bringing these claims – which had previously been seen as a key initial battleground and an important and potentially robust check on the process.

• However, current judgments from the Competition Appeal Tribunal indicate a willingness to certify proceedings with a relatively light touch.

• Existing proceedings already cover the banking sector, telecommunications, ferry operators, and insurance.

• The collective value of these proceedings runs into the tens of billions and the claims will be some of highest value claims to be seen in the UK.

Prediction authors: Patrick Boylan, Eleanore Di Claudio

We predict in 2022 at least five group litigation orders will be issued for opt-in class actions in relation to data breaches.

Why?

In November 2021 the Supreme Court issued a long awaited decision in the landmark case of Lloyd v Google and rejected the argument that compensation could be claimed for mere ‘loss of control’ of personal data. Rather, compensation for a breach of s.13 of the DPA 1998 should only be awarded if the data subject suffered “material damage or distress”. The effect of that was - contrary to the hopes of a growing army of claimant law firms and litigation funders - that opt out representative actions (under CPR 19.6) were not an appropriate method of bringing a class action following a data breach.

This decision has closed the floodgates on many envisaged opt out claims. Those seeking funding for such matters suffered a knee jerk reaction as litigation funders immediately raised the bar for the cases under consideration for funding. But it will not stop data protection litigation being the focus of many claims going forward. There are important questions left after the Supreme Court’s judgment – not least whether the same approach would be taken where the GDPR and DPA 2018 applies, rather than the DPA 1998, and whether well resourced funders will be able to adapt the methodology being used to bring representative actions and make use of any of the helpful guidance provided by the Supreme Court on how an opt out representative action should be brought.

Most significantly, it seems likely that claimant firms (and litigation funders) will seek to bring opt in ‘group litigation orders’ following on from data breaches – which was the expectation and trend prior to the Court of Appeal’s overturned decision in Lloyd v Google – mirroring the successfully settled action brought against British Airways in early 2021.

Prediction authors: Robert Allen, Emily Agnoli, Thomas Bowen

Claimant law firms continue to amass “misleading information” class actions against public companies to bring under FSMA Schedule 10A.

We predict in 2022 there will be a rise in claims alleging that companies have published misleading information in respect of wider company values, including ESG.

Why?

We expect to see continued efforts to get FSMA Schedule 10A (formerly FSMA Section 90A) cases off the ground. These cases have had a difficult genesis, with none yet reaching trial.

However:

• This remains the only mechanism by which companies can be held to account for misleading published information. Investors (and claimant law firms) remain very focused on seeking to utilise it.
• A body of case law concerning FSMA Schedule 10A is starting to develop. Several judgments on procedural aspects of the claims have been delivered this year, and the forthcoming judgment in the HP/Autonomy litigation may address some substantive aspects of these claims.
• FSMA Schedule 10A claims often arise in parallel to regulatory enforcement or criminal proceedings and can be expected to continue to do so.
• COVID-19 has brought the importance of company culture and values into sharper focus. Potential Schedule 10A claimants are likely to focus their efforts increasingly in that area, particularly as companies increasingly promote their impact/ESG credentials.
• There is no shortage of litigation funders in the market, eager to bankroll the claims.

See our series of articles on s.90A (now Schedule 10A) claims here.

Prediction authors: Chloe Morris, Alexandra Webster

We predict in 2022 we’ll see the biggest shift to date to the way commercial claimants fund litigation and arbitration, along with an increase in the use of alternative fee arrangements for defending claims.

Why?

Whilst alternative fee arrangements are commonplace for certain claims, the move away from self-funded hourly rates has been slower for strategic and high value commercial disputes. The wind of change is blowing in the following direction:

• Litigation funding is no longer a nascent market. Institutional investors are now commonplace behind the scenes and a number of key litigation funders have earned their stripes on significant commercial disputes.
• In parallel, we are seeing an increase in the use of own fee insurance. Whilst this doesn’t aid the cash flow concerns of paying on-going legal fees during a dispute, it can be a very effective way to transfer the cost risk if cashflow is not a key concern.
• As these external offerings continue to develop, law firms can no longer discharge their duty to explain the funding options to their clients through a line in their retainer letter and must engage in more meaningful discussions that will lead to a demand for better solutions.
• Law firms are also building their own confidence in sharing risk with their clients, either on their own or backed by a litigation funding or insurer, and typically using a conditional fee agreement (CFA) or damages-based agreement (DBA).
• We anticipate at least 3 more law firms will announce a joint offering with a litigation funder during the course of 2022.
• These developments are resulting in more scope than ever for law firms and their clients to work with litigation funders and After-the-Event insurers to create innovative fee arrangements.

Prediction authors: Verity Jackson-Grant, Minesh Tanna