As 2024 draws to a close, we look at some of the key trends we are seeing, with a particular focus on securities class actions and consumer claims.

Types of UK Class Action

There are four main routes to bringing collective redress actions in the UK:

1. Group litigation Orders (GLO). CPR Part 19 allows the use of GLOs to case manage multiple claims having common or related issues of fact or law. These are opt-in actions where individual claimants are registered. Examples of recent cases include Bille and Ogale v Shell on the oil spills in Niger. The covid test case was also a GLO and is an example of where test claims can be used.
2. Representative claims. CPR Part 19.8 allows representative actions where one or more claimants represent other claimants with the same interest. These are opt-out actions. A recent example of a representative claim is Lloyd v Google.
3. Competition Appeal Tribunal ("CAT") Claims. The CAT handles proceedings dealing with alleged breaches of competition law. These claims are pursued by a class representative on an 'opt in' or 'opt-out' basis and may be stand alone or 'follow-on' from a competition authority decision. Examples of recent cases include Merricks v Mastercard.
4. Multiple joint claims. This is where multiple claimants bring a claim under a single claim form, on the basis that their actions can be “conveniently disposed of in the same proceedings”. The largest single group claim in UK legal history, the Fundão Dam action, is currently proceeding through the High Court and involves more than 700,000 claims by individuals and communities affected by the disaster. These claims are brought on an opt-in basis.

Securities Class Actions in the UK

Securities class actions tend to be brought by the shareholders of a listed company seeking relief from losses suffered due to a fall in the share price. The claims are usually made against both the company and its directors and may include allegations of mismanagement, accounting problems and sometimes even dishonesty and fraud. Whilst securities claims have been common place in the US for decades, they are still rare in the UK. 

Sections 90 and 90A/Schedule 10A of the Financial Services and Markets Act 2000 ("FSMA") provide a statutory framework and regime for shareholders to bring securities claims in the UK. FSMA allegations are often partnered with other causes of action, including claims for breaches of directors’ duties under the Companies Act 2006, and common law claims in negligence.

While the FSMA legislation has been around for a considerable time, no true FSMA securities claim has yet proceeded all the way to final judgment. In ACL Netherlands BV v Lynch [2022] EWHC 1178 (Ch) (“Autonomy”), the court considered for the first time the merits of a claim for liability under s90A, which seeks to hold issuers liable for knowingly or recklessly providing inaccurate published statements or omissions in published information. Unusually, the claim concerned a merger and acquisition dispute, where Autonomy (having merged with HP and now under its control) accepted full liability to its shareholders, pursued a claim against the former directors of Autonomy responsible for the misstatements. It was not a shareholder claim relating to misstatements, as envisaged by the legislation. Liability was established and a trial to determine quantum is now awaited.

This summer, we came close to a shareholder decision in the S.90A case of Various Claimants v Serco Group plc, but this settled one week into the trial. The lack of judicial consideration of s90 and 90A in a shareholder context may change in the next two years as the Standard Chartered and Glencore actions have been listed for trial in autumn 2026.

In the meantime, there is some ongoing uncertainty about how the courts will apply the FSMA legislation and how any damages will be quantified. It is also worth flagging that securities class actions in the UK may face difficulties when it comes to case management. In December 2023, the High Court struck out a FSMA securities claim, Wirral Council v Indivior PLC and Reckitt Benckiser Group PLC, brought under CPR 19.8 on the basis that the proposed structure would unfairly impact the court’s jurisdiction to manage the claims and would make settlement more complex and thereby unfairly burden the defendants. The appeal to determine whether this claim can proceed is currently before the Court of Appeal.

Notwithstanding these issues, the introduction of new legislation relating to ESG, AI and other financial disclosure obligations on companies and their directors, combined with the ever increasing availability and creativity of litigation funders will inevitably lead to increasing numbers of securities actions.

Competition and Consumer claims in the UK

The CAT has been the most active forum. Of the 52 collective proceedings which have been registered with the CAT, 22 have been certified, 25 are awaiting certification and 5 have either been withdrawn, unsuccessful or are on hold. Class representatives and Claimant law firms have been creative in 'dressing' consumer rights, data privacy and environmental breaches as competition infringements in order to bring claims within the scope of the CAT's regime.

2024 has been an important year for the CAT. It has approved collective settlements in two actions (McLaren and Gutmann) and it will shortly be asked to approve the collective settlement in Merricks v Mastercard. The CAT also had its first substantive trial of an opt-out action (Justin Le Patourel v. BT Group PLC); judgment is awaited but this should clarify the CAT’s attitude to damages and their distribution to large classes of claimants.

In December 2024, it was also announced that a £1bn class action was being issued against Microsoft in the CAT. The lawsuit claims that Microsoft has abused thousands of UK businesses and organisations that use rival cloud computing services from Amazon, Google and Alibaba by forcing them to pay higher licence fees for its Windows Server. This is a high profile case and its front page headline is likely to increase awareness of UK class actions.

Conclusion

2024 has been a busy year and the use of collective redress is gaining momentum and appeal in England and Wales. Taking the recent trends and possibility of formal judgments in respect of CAT and securities class actions in the coming years, it appears that the UK is well on its way to establishing a workable system for class actions. This is potentially concerning for both UK directors and Insurers who may face an increased risk of being named in or insuring large scale litigation.