CLASS ACTIONS: REINVENTING THE WHEEL
CIVIL JUSTICE COUNCIL COLLECTIVE ADDRESS EVENT
THEOBALD’S PARK: 26 – 27 MARCH 2008
Introduction
1. Imagine you’ve hitched a ride with David Tennant (something which might appeal more to some than others) and he’s taken you back to 1904. He could take you anywhere, to see anyone, but you have the misfortune to land in the chambers of Thomas Snow, in the Inner Temple. Because, like Churchill’s optimist, you see the opportunity in any difficulty, no matter how it might appear to a pessimist to lack promise, and because you’re fervently committed to expanding your knowledge of civil procedure you decide to ask Mr Snow the odd question or two. (You know of course that Thomas Snow was the Jack Jacob of his day – the first and founder editor of what is now the White Book). You get on like a house on fire and he’s as interested to hear what’s going on in 2008 as you were in finding out what was going on in 1904. The conversation turns to collective redress (which you explain is the ungainly term for what are sometimes called representative or class actions); and you tell him about the latest developments and the arguments for and against its introduce in England and Wales. This puzzles him and he pulls down from his bookshelf the latest edition of the White Book.
2. He turns to page 162, looks more puzzled and then asks you when were they abolished? It’s your turn to look puzzled and you ask him to explain. He refers you to the notes to RSC Order 16 rule 9, and reads the following:
“Intervention by persons and parties – If a person not a party to a class action desires to intervene in any way he should apply to be made a party, Watson v Cave (1881) LR 17 ChD 19 [CA].”
3. So when did you abolish the class action he asks again? You might well look confused at this point – I certainly would. We must have abolished it, otherwise why are we discussing how best to introduce a collective redress action.
4. Must we have abolished it though? Maybe its still there, but we’ve just lost sight of it. That we’ve lost sight of it and it has lain unused, underused or unappreciated for what it really is does not mean the jurisdiction has ceased to exist. As was submitted in the ultimately unsuccessful attempt to breathe new life into the old equity bill of review in Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9 (at 95)
“. . . even if . . . jurisdiction has not been exercised for a 100 years that does not matter: once there is jurisdiction there is always jurisdiction. Jurisdiction does not fade with time.”
That attempt to breathe life into an old jurisdiction failed not because that submission was rejected but because the common law procedure had overtaken the old equity procedure in that case.
5. Where does this leave us for today’s purposes? Well I know where it leaves me; in the unenviable position of presenting what might be taken as the minority report to Rachael’s many, exhaustive and authoritative reports. It leaves me looking at whether what Snow referred to as a class action is available to us today as a means through which to introduce – or reintroduce – an effective collective redress mechanism via procedural reform of the representative action in England and Wales.
6. In order to consider the modern-day utility of the representative action it is perhaps instructive to give an overview of the jurisdiction.
Past
7. The traditional conception of the purpose of English civil proceedings is, in Lord Brougham’s often repeated words, is ‘to do justice between man and man.’ To do justice between individuals. This is undoubtedly right and is often used as an explanation or justification for the reticence with which English civil procedure has treated the class action. It is however only a partial picture as it only articulates the common law’s approach to litigation. Equity, English civil justice’s other parent took a diametrically opposite approach. Equity’s aim was in the words of Talbot LC in Knight v Knight to do ‘complete justice and not by halves.’ What did he mean by this?
8. Talbot LC was adverting here to the practice in equity of ensuring that finality of litigation was reached within one set of proceedings by requiring the joinder of all interested parties. Equity did not simply do justice between man and man but between all those who had an interest in the litigation. As Eldon LC explained the rule in Cockburn v Thompson:
“The strict rule is, that all persons materially interested in the suit, however numerous, ought to be parties: that there be a complete Decree between all parties, having material interests.”
9. Through this equity could adjudicate as to the rights of all within one set of proceedings having examined each and every relevant issue; thereby obviating the need for any future or further proceedings. This requirement, known as the complete joinder rule, brought with it a number of procedural disadvantages however. It often resulted in the joinder of large numbers of essentially passive parties, which increased litigation time and expense unnecessarily. This was especially problematic when a party died and proceedings had to be stayed pending joinder of the deceased’s heir or heirs. It was equally problematic where an individual who ought to have been joined was, for whatever reason, not joined to the proceedings as they could appeal by way of rehearing at any time after judgment.
10. To obviate the procedural disadvantages of the rule while maintaining its advantages equity developed the representative rule. By this mechanism the complete joinder rule was relaxed so that a single party, for instance the plaintiff, was deemed to represent all other potential plaintiffs, who would thereby be bound by the decision. The basis on which this relaxation of the joinder rule was made was explained in 1722 in Chancey v May as arising where
“it would be impracticable to make them all parties by name, and there would be continual abatements by death and otherwise, and no coming to justice if all were to be made parties.”
11. The complete joinder rule gave way when it would be inconvenient if it was strictly applied. It could be relaxed so that there were either representative plaintiffs or defendants, who properly represented the class. It did so because as Cottenham LC put it in Wallworth v Holt:
“. . . it is the duty of this Court to adapt its practice and course of proceedings to the existing state of society, and not by too strict an adherence to forms and rules, established under different circumstances, to decline to administer justice, and to enforce rights for which there is no other remedy.”
12. The was however a second procedural basis for the representative rule, again consistent with equity’s aim of achieving complete justice albeit more obviously contrary to the common law’s aim of doing justice between man and man. US Supreme Court Associate Justice Story described it in this way in his magisterial guide to equity proceedings in England and the US:
“The general doctrine of public policy which in some form or other may be found in the jurisprudence of every civilized country is, that an end ought to be put to litigation, and above all to fruitless litigation . . .If suits might be perpetually brought to litigate the same questions between the same parties or their privies as often as either should choose, it is obvious that remedial justice would soon become a mere mockery; for the termination of one suit would become the signal for the institution of a new one, and the expenses might become ruinous to all parties. The obvious ground of the jurisdiction of Courts of Equity in cases of this sort is to suppress useless litigation and to prevent multiplicity of suits.
One class of cases to which this remedial process [by way of a bill of peace] is properly applied is where there is one general right to established against a great number of persons. And it may be resorted to where one person claims or defends a right against many or where many claim or defend a right against one. In such cases Courts of Equity interpose in order to prevent multiplicity of suits; for as each separate party may sue or be sued in a separate action at law [that is to say in a common law action between man and man], and each suit would only decide the particular right in question between the plaintiff and the defendant in that action, litigation might be interminable. Courts of Equity therefore, having a power to bring all the parties before them, will at once proceed to the ascertainment of the general right; and if necessary, they will ascertain it by an action of issue at law, and then make a decree finally binding upon all the parties.”
13. All the parties did not need to be before the court however. Complete joinder could again be relaxed under the bill of peace as long as ‘there was a right claimed that affects many persons, and that a suitable number of parties in interest are brought before the court . . .”
14. We can already begin to see the contours of the early class action. It was a procedural mechanism aimed at efficiently and economically dealing with disputes involving large numbers of parties all of whom had a common dispute. It obviated as Plumer MR put it in Meux v Maltby the ‘great inconvenience’ of bringing all the parties before the court. But for the mechanism those claims would either not be litigated at all or would be litigated individually at great cost and expense for the common party and the court. Absent such a procedure there would be, again in Plumer MR’s words, ‘an absolute failure of justice.’ Rather than allow either of those eventualities to occur the court permitted a single representative plaintiff or defendant to bring or defend proceedings on behalf of those others.
15. What other features did it have? First of all, the representative party prosecutes the claim at his own expense. He ran the costs risk. He also ran the risk of an order of security for costs. The court would require sufficient representative parties to ensure that the disputed issue was justly and fairly tried. It lay to the court to assess whether the representative could properly and fairly represent the represented class. The represented class could be as wide as the whole world. The decision would bind all the rights of those represented i.e., it would operate as a res judicata in respect of the matter decided i.e., the common issue. But only in respect of the matter decided. Where a represented party wished to assert that he did not have an interest in common with the representative and the represented class he could and should apply to be joined as a defendant to the action. In order to bring such proceedings the representative party must seek a remedy that was ‘in its nature beneficial to all those whom he [undertook] to represent.’ To be beneficial to all, the representative and the represented parties had to have a ‘common interest’ or ‘general right’ i.e., one common to all. As Lord Hatherley LC put it in Warrick v The Queen’s College, Oxford, a decision of the Court of Appeal in Chancery:
“I take it that the view of this Court is, that all persons having a common right, which is invaded by a common enemy, although they may have different rights inter se, are entitled to join in attacking the common enemy in respect of that common right . . . although after the common right is established they may have a considerable litigation among themselves as to who are the persons entitled to the gains obtained through that suit.”
16. Hatherley LC also makes it clear that the common rights did not need to arise through the same document. All that the represented class need demonstrate was that their rights ‘all depend(ed) upon the same question’. Where however the representative action was brought by bill of peace the common rights did have to arise out of a single document.
17. So matters stood at the turn of the 20th Century, when consideration of the representative action came before Lindley MR, Rigby and Vaughan Williams LLJs in the Court of Appeal in Ellis v Duke of Bedford. The question before the Court was whether a group of fruit and vegetable growers could maintain an action both on their own behalf and on behalf of other such growers against the Duke of Bedford in respect of rights to stalls at Covent Garden Market. Lindley MR, who was in all likelihood the leading authority on the use of the representative action, and Rigby LJ held that they could bring the action in a representative capacity. They could do so because despite the fact that there were differences between the represented parties inter se they had a common claim against a common defendant.
18. While Vaughan Williams LJ agreed on the principles, he dissented as to the application of those principles holding that as the plaintiffs had no individual property rights they could have no rights in common. In essence he based his judgment on an earlier decision of the Court of Appeal in Temperton v Russell (albeit he did so without reference to it) in which Lindley LJ giving the judgment of the court appeared to hold that representative actions could only be brought where the class held beneficial property rights. That decision had already been explained by Wills J in Wood v McCarthy & Another as not going that far but as simply holding that following the Judicature Act reforms this aspect of Chancery procedure was available in all Divisions of the High Court but only on the same basis as it had been in the Court of Chancery. As Wills J put it Temperton simply held that as representative actions could not be used in actions for tort prior to the Judicature Act reforms they could not be used to prosecute such actions post-1873. I gloss over the fact that Lindley, by then MR, felt no need to advert to his previous decision when giving his judgment in Ellis.
19. The Court of Appeal’s decision was upheld by a majority of the Lords in Duke of Bedford v Ellis & Others, in which Lord Macnaghten gave the leading judgment. In doing so he provides the most authoritative discussion of the representative rule. Within that discussion he held that:
1) Representative actions are available where the class has a common interest, a common grievance and the relief sought was in its nature beneficial to all;
2) The basis of the common interest and grievance did not have to be the same for each class member;
3) That other factors, such as distinct rights between the class members, may serve to differentiate the class members was irrelevant. The basis of a representative action is what the class has in common ‘not what differentiates the cases of individual members’;
4) If Temperton held that representative actions were only available where a beneficial property right was in issue it was wrongly decided; the rule was not so limited;
5) It did not matter that the represented class was ‘fluctuating and indefinite’, the description of the class was sufficient to properly define it.
20. Lords Morris and Shand delivered concurring judgments. All three emphasised how Vaughan Williams LJ erred in placing any weight on the principle said to be established in Temperton. A principle which both Macnaghten and Shand pointed out was contrary to precedent that would have been as binding upon the court in Temperton as it was on the Court of Appeal in Ellis (i.e., Warrick v Queen’s College; a decision of the Court of Appeal in Chancery).
21. Lindley, by then Lord Lindley, would expressly disavow Temperton shortly after the Lords’ decision in Ellis when giving judgment in the Lords in The Taff Vale Railway Company v The Amalgamated Society of Railway Servants where he held that:
“The principle on which the rule is based forbids its restriction to cases for which an exact precedent can be found in the reports. The principle is as applicable to new cases as to old, and ought to be applied to the exigencies of modern life as occasion requires. The rule itself has been embodied and made applicable to the various Divisions of the High Court by the Judicature Act, 1873, ss 16 and 23 – 25 . . . and the unfortunate observations made on that rule in Temperton . . . have been happily corrected in this House in . . . Ellis.”
22. Vaughan Williams LJ was to have his revenge though. In Markt & Co Ltd v Knight Steamship he gave the lead judgment, with which Fletcher Moulton LJ agreed (Buckley LJ dissenting) which explained the House of Lord’s decision in Ellis in as restrictive a fashion as possible. This judgment set back the development and application of the representative action throughout the 20th Century and did much, in answer to the question our hypothetical Thomas Snow posed earlier, to abolish the class action in England. The claim arose out of the wreck of a steamship. The representative action was brought by various shippers and was an action for breach of contract and duty in and about the carriage of goods by sea. The contracts were the respective bills of lading. Vaughan Williams LJ held as follows:
1) There was nothing on the writ to show that the bills of lading and the exceptions within them were identical or that the goods shipped were of the same class or kind;
2) There was no common purpose or connection amongst the shippers to justify a representative action either under the old chancery practice or under Rule 16 Order 9. The only bond between the class members was that they all had goods on the ship;
3) While the shippers suffered a common wrong in that their goods were all lost, they had no common right or common purpose and as each class members claim could be defeated by facts and matters unique to them it could not be said that they had the same rights as required per Ellis
4) Whether or not, and the implication was not, Macnaghten was right in his summary of the pre-1873 Chancery practice the court had now to construe the rule consistently insofar as the common law and chancery was concerned ‘notwithstanding any prior practice in the Court of Chancery.’
23. Fletcher Moulton LJ held that the claim was not properly brought as a representative action as:
1) The class had not properly been defined. Simply listing the class members did not define the class;
2) Whatever the practice had been in equity, that was now immaterial as the Court was now governed by the language of Order 16 Rule 9. That rule is now definitive of the court’s practice and it is irrelevant whether the rule narrows or expands the pre-1873 practice. The rule is the rule;
3) The rule requires as an essential condition ‘that the persons who are to be represented have the same interest as the plaintiff in one and the same cause of action or matter.’ This is what Macnaghten meant in Ellis when he adverted to common interest;
4) The same interest could not arise where different defences could be raised against the class members;
5) The same interest could not arise where the class members entered into separate contracts with the defendant, even if the contracts were identical, as this would an impermissible infringement of privity of contract ;
6) Damages were not an available remedy to representative actions, nor could a declaratory judgment be given declaring a right to damages.
24. Buckley LJ dissented and his judgment reads like the judgment of the single equity lawyer in a three judge Court of Appeal. He held that:
1) Order 16 Rule 9 was intended to apply the equity, which was more flexible than the rigid common law approach to all Divisions (per Macnaghten);
2) It is no objection to a representative action that the rights between the parties arise under separate contracts;
3) A representative plaintiff must be in a position to claim a benefit common to all the class, but he can also claim a benefit personal to himself;
4) The class can have the same interest against a defendant notwithstanding the fact that it can result in different measures of relief to its members;
5) The shippers had a common right against a common enemy (as per Warrick and Ellis) i.e., that the ship owner should consign their goods to a ship not also carrying contraband, as such they could seek a declaration that the ship owner was in breach of contract. Once liability was established in the class action, further proceedings could be brought by the individual class members for damages, in which proceedings individual defences could be run by the ship owner as to why that particular plaintiff ought not to recover (applying Warrick; Gellatly).
25. Vaughan Williams and Fletcher Moulton LJJs, who I assume (perhaps unfairly and inaccurately) were common lawyers, won the day and effectively put and end to the utility of the representative action. This is said by many commentators to mark the high point of the court’s narrow interpretation of the jurisdiction. A more accurate summation would be that it marked the high point of the common law’s attempt to improperly emasculate an equitable jurisdiction. But it’s wrong to indulge in ad hominen comment.
26. After Markt the representative rule’s utility was severely restricted as the combination of their judgments meant that in order to fall within the scope of the rule a representative plaintiff had to show: ) a common interest arising under a common document; ii) a common grievance; and iii) a remedy beneficial to all, but not damages. On its own merits though the decision in Markt doesn’t stand up to much scrutiny. Both judges ignored binding precedent to the effect that: i) the rule could be used when there were separate contracts, the basis of the common interest need not be the same for all (Warrick; Ellis); ii) the differences which existed between the representatives and the defendant were irrelevant, the key issue was the common element (Warrick; Ellis;) unless the action was brought by Bill of Peace (long since abolished); iii) the rule had to be interpreted consistently with the old equity practice, the RSC was not to be interpreted on its face alone (Temperton; Ellis; Taff Vale).
Present
27. The representative rule suffered due to the Markt decision until the early 1970s and then again in the 1990s when a number of decisions tried to breathe new life into it. Vinelott J in Prudential Assurance Co Ltd v Newman Industries Ltd held that the effect of Ellis and Taff Vale was to make representative actions available for claims in tort: Temperton simply showed that the non-representative plaintiffs had been chosen, if proper representatives had been chosen the action in tort would have proceeded. Insofar as damages were concerned, Vinelott J held that while individual damages claims could not be pursued by a representative plaintiff, a declaration that class members were entitled to damages could be granted, which individual class members would then be entitled to rely on in future individual damages claims [at 257]. In other words he adopted Buckley LJ’s approach from Markt that the representative action would give a prima facie right to damages or might operate as an issue estoppels on the common issue, which could be defeated in secondary proceedings where and if there were any special circumstances, defences etc.
28. In EMI Records Ltd v Riley Dillon J held that damages were recoverable in a representative action. They were recoverable because the global quantum to the entire class was ascertainable. Without reference to it Dillon J applied Lord Hatherley’s point from Warrick, that once a common right was established there might well be considerable litigation between the class members to ascertain their individual right to a share of the common gain.
29. In Moon v Atherton Denning MR, affirmed that only the representative plaintiff was liable for costs and that the represented parties would be bound by the decision. He went on to hold that as limitation continued to run for represented parties the court had sufficient power to substitute one of them for the representative, if the representative wished to discontinue or settle the claim. In an obiter dictum he stated that the action, for negligence, could properly be brought as a representative action. He thus affirmed, without reference to it, Vinelott J’s conclusion, that contra Markt, Ellis and Taff Vale established that the representative action was available for tortious claims.
30. Then in The Irish Rowan the Court of Appeal (Purchas LJ) explained that it had erred in Markt when it, that is Vaughan Williams LJ (and Fletcher Moulton although he was not referred to), held that the rule had to be interpreted without reference to pre-1873 Chancery practice. It went on to outline how: i) the rule as then drafted had safeguards, consistent with the old practice, for class members who wished to disassociate themselves from the class (at 239); that the rule permitted class members to opt-out of the class (at 241 per Order 15 rule 12 (1)); that as the class members entered into identical contracts there was sufficient commonality. Relying on EMI Records and Moon v Atherton, amongst others, it went on to affirm that damages claims were not to be automatically excluded from representative actions (at 227). In essence, it held that the representative action had to applied, as Andrews put it, ‘within the spirit of flexibility’ which imbued the 19th Century case law. A flexibility available in 1790, reaffirmed in 1990 and still available then in 2008(?).
31. Most recently Morritt VC in Independiente Ltd v Music Trading On-Line (HK) Ltd examined the scope of the rule in its CPR guise: CPR 19.6. He noted that the principles governing the rule were the same post-CPR as they were pre-CPR, albeit the rule had to be interpreted and applied consistently with the overriding objective. In particular the definition of ‘same interest’ in the rule had to be interpreted flexibly and in conformity with the overriding objective. The test to establish whether the rule was appropriate for the case was that laid down by Ellis: common interest, common grievance and relief beneficial to all. There was a common interest despite the presence of different defences (contrary to Markt but fully in line with Temperton; Ellis; Taff Vale). Pecuniary relief was available as it was beneficial to all.
Future
32. Where does all this leave us now and for the future? It is arguable that the representative rule as explained in the jurisprudence could be transformed into a modern class action, with two exceptions. As it stands at the present time the jurisdiction does not accommodate cy pres distributions nor does it operate to suspend limitation periods for the represented class. Such reforms would need to be the product of primary legislation and a public policy debate properly carried out by Parliament; within which, for instance, government might consider whether any unclaimed damages could or should be applied to the Legal Aid Fund or a SLAS. Such a use, would arguably, be in keeping with the aim of furthering access to justice for the many. That’s the negative, so what’s the positive?
33. We can see that by contrasting the rule with Rule 23 of the US Federal Rules of Civil Procedure, which shapes the US class action. Rule 23 (a) sets out 4 conditions which have to be satisfied in order to certify an action as a class action: i) numerosity i.e., that there are so many class members that joinder of them all is impracticable; ii) commonality i.e., there must be a common question of law or fact; iii) typicality; the claims or defences of the representative parties are typical of the class i.e., that the representative’s complaint is typical of the classes complaint, in other words that the representative is a member of the represented class; and iv) the representative parties fairly and adequately protect the interests of the class.
34. The English representative rule, as I have hopefully shown, contains: a minimum numerosity requirement (Chancey v May); a commonality requirement, to which Markt was an improper attempt to sidestep binding authority as to the nature of common interest and grievance (Warrick, Ellis); a typicality requirement (Adair v New River Company); and a requirement that the representative must properly and adequately represent the interests of the represented class (Gellatly). Equally its justification and the basis of its jurisdiction is the same as that of class actions throughout the world: to increase access to justice, to enable claims that it would not otherwise be possible to litigate to come before the courts and to prosecute others with greater procedural efficiency and economy than would otherwise be possible.
35. Rule 23 (b), following the 1966 reforms, introduced into the US the damages class action (Rule 23 (b) (3)). When introduced additional procedural safeguards were also introduced. In order to bring such an action it must be superior to other forms of procedure. The representative rule incorporates the same requirement (Meux). Equally, the damages class action must satisfy a common benefit requirement (Rule 23 (b) (3)). This is already a pre-requisite under the representative rule (Warrick, Glasse, Ellis). Further commonalities between the US class action and the representative action are: that the class has to be capable of proper definition (Rule 23 © and Ellis); they bind the represented class in respect of the common issue (Rule 23 © and (Meux and others). While damages are available under both systems, there is a greater practical acceptance and application of aggregate damages claims in the US in contrast to the arguably theoretical basis upon which the English action might embrace them through further developments akin to those acknowledged by Purchas LJ in The Irish Rowan.
36. Having accepted that global damages awards are available and that the basis of the representative action is a flexible one not limited to past precedent (in Lindley’s words a flexible action which ‘ought to be applied to the exigencies of modern life as occasion requires’), is it or perhaps it is reasonable, to conclude that the English jurisdiction could well accommodate damage aggregation, through perhaps treating the class as a single entity which has suffered damage and then leave it for the class members to ascertain their rights inter se as per Warrick.
37. What about opt-in, opt-out and mandatory classes? Professor Mulheron has on occasion noted the difficultly in characterising the representative rule. Is it a mandatory class or not? The answer to that question is yes and no? And the same issue and answer arises in respect of the Rule 23 class action. In the US Rule 23 is a mandatory class action. It’s mandatory, with no notice of certification requirement, where injunctive or declaratory relief is sought. Why? Because the relief sought is indivisible for all class members. There is however a power to order notice. Insofar as Rule 23 (b) (3) damages class actions are concerned the class action opt-out operates. The same is true, both as to it being a mandatory action and in some circumstances an opt-out action, under the representative rule, where the court has the power to permit an opt-out under CPR 19.6 (4) cf. The Irish Rowan. Given the introduction of Article 6 ECHR, CPR 19.6 (4) could not but, in my view, be interpreted now as providing an opt-out power per the interpretative approach exemplified by Cachia and Others v Faluyi [2001] 1 WLR 1966 and Goode v Martin [2002] 1 WLR 1828. Such an Article 6 compliant interpretation of the jurisdiction could not but require the court to operate a sufficient notice requirement prior to certification here as in the US. (I gloss over Cappalli’s and Consolo’s suggestion that there may well be a positive duty to introduce class actions so as to give proper effect to constitutional guarantees of access to justice. )
38. It is sometimes argued that the introduction of an opt-out class action would be ultra vires the rule-making power. I wonder if this is right. There has been a power since 1873 and beyond to create a mandatory class, the a fortiori case. Given the power to create the a fortiori case surely it follows by necessary implication that there is a power to create the lesser case, the opt-out class action?
39. We should perhaps not be surprised at the similarity between Rule 23 and the representative rule, as the Rand Institute for Civil Justice acknowledged last year, Rule 23 is based on rules which had existed since the 19th Century in the US; rules which I have no doubt were based on the English representative rule.
40. Insofar as settlement is concerned there appears to be no present basis in the jurisprudence for court-approval of settlements so as to bind the class. That is not to say that the court’s power to approve settlements in cases where parties are represented by others e.g., CPR 21.10 (children and patients) could not be so extended to cover represented parties. The rationale for approval is the same in both types of case; the parties to be bound are not before the court except by representative. Again the rule could be drafted so as to provide for adequate opt-out notice.
41. And as for disclosure? It was held in 1990 that there was no general power to require disclosure from represented parties as they were not for this purpose parties to the action. I wonder whether this is really a genuine difficulty now. CPR 19 (1) (2) (a) and (b) provide the jurisdiction to add parties to proceedings so that the court can resolve matters or issues in dispute in the proceedings. If there was a necessity to obtain relevant evidence from a represented party I cannot see why they could not, in principle, be joined as representative parties, in order to obtain that evidence to enable the court to deal with the common issue. Equally, I wonder why the court could not simply utilise its existing powers to obtain evidence from non-parties here (CPR 31.17).
42. We of course differ on costs, but that is perhaps an issue for the brave new world of third party funding. And as for appeals. Equity used to permit non-parties, who could of and should have been joined to actions, to appeal against judgments where there interests where effected by the judgment. The represented class members are non-parties are would have been able to take advantage of this rule, which required them to be granted permission to appeal. There is no reason why this rule, which the Court of Appeal has just approved as continuing to exist under the CPR (MA Holdings Ltd v George Wimpey UK Ltd [2008] EWCA Civ 12) should not apply to represented parties.
43. There is however the vires point. If the CPR were to be amended so as to codify the representative rule would a vires challenge succeed; the argument being that such a change would be beyond the rule-making power under the Civil Procedure Act 1997. In my view this does not arise on the above analysis. It is to misunderstand the rule-making power. The rule-making power here would be exercised to give shape to an extant jurisdiction; it would not be, as Buxton LJ recently noted in another context, impermissibly creating jurisdiction: see Jaffray v The Society of Lloyds [2007] EWCA Civ 586, citing British South Africa Co v Companhia de Mocambique [1893] AC 602 at 628. It would be codifying a jurisdiction which has been in existence since the 18th Century and which has been exercised and affirmed by the House of Lords twice. The vires point would only arise if the Rule Committee went beyond the ambit of that jurisdiction. The real question then is to identify, as I have tried to do, the bounds of the extant jurisdiction.
44. Except for issues of limitation and cy pres (which are not essential features of a modern class action) it need not have to go beyond that jurisdiction. Indeed as the Canadian Supreme Court has held in West Canadian Shopping Centres Inc v Dutton [2001] 2 SCR 534, the representative rule can be used, in the absence of a specific class action statute, by the court under its inherent jurisdiction to fashion a modern class action. The procedural rule in question in that case was based on the old RSC rule, it was operating in a judicial system that evolved out of the English judicial system and is therefore as much a product of the common law and equity as the English courts. Absent statutory intervention, there is on the face of it no reason why the English courts cannot, in this field, follow the path trodden by the Canadian Supreme Court and utilise the existing jurisdiction.
CIVIL PROCEDURE RULES – PART 19
II REPRESENTATIVE PARTIES
Representative parties with same interest
19.6
(1) Where more than one person has the same interest in a claim –
(a) the claim may be begun; or
(b) the court may order that the claim be continued,
by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.
(2) The court may direct that a person may not act as a representative.
(3) Any party may apply to the court for an order under paragraph (2).
(4) Unless the court otherwise directs any judgment or order given in a claim in which a party is acting as a representative under this rule –
(a) is binding on all persons represented in the claim; but
(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court.
(5) This rule does not apply to a claim to which rule 19.7 applies.
Representation of interested persons who cannot be ascertained etc.
19.7
(1) This rule applies to claims about –
(a) the estate of a deceased person;
(b) property subject to a trust; or
© the meaning of a document, including a statute.
(2) The court may make an order appointing a person to represent any other person or persons in the claim where the person or persons to be represented –
(a) are unborn;
(b) cannot be found;
© cannot easily be ascertained; or
(d) are a class of persons who have the same interest in a claim and –
(i) one or more members of that class are within sub-paragraphs (a), (b) or ©; or
(ii) to appoint a representative would further the overriding objective.
(3) An application for an order under paragraph (2) –
(a) may be made by –
(i) any person who seeks to be appointed under the order; or
(ii) any party to the claim; and
(b) may be made at any time before or after the claim has started.
(4) An application notice for an order under paragraph (2) must be served on –
(a) all parties to the claim, if the claim has started;
(b) the person sought to be appointed, if that person is not the applicant or a party to the claim; and
© any other person as directed by the court.
(5) The court’s approval is required to settle a claim in which a party is acting as a representative under this rule.
(6) The court may approve a settlement where it is satisfied that the settlement is for the benefit of all the represented persons.
(7) Unless the court otherwise directs, any judgment or order given in a claim in which a party is acting as a representative under this rule –
(a) is binding on all persons represented in the claim; but
(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court.
Representation of beneficiaries by trustees etc.
19.7A
(1) A claim may be brought by or against trustees, executors or administrators in that capacity without adding as parties any persons who have a beneficial interest in the trust or estate (‘the beneficiaries’).
(2) Any judgment or order given or made in the claim is binding on the beneficiaries unless the court orders otherwise in the same or other proceedings.
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