Alicia Alinia is Global COO of Pogust Goodhead, which specialises in group litigation.
In June 2021, over 600 bereaved family members and survivors of the Hillsborough Disaster were finally able to get compensation from the police after years of legal battles. It was a landmark case and judgment – providing closure for some families and helping others deal with injuries and psychiatric treatment. It was also one of the finer moments of our globally-admired legal system.
Most people interact with our legal system for personal and individual reasons. But there are good grounds for why collective action lawsuits exist and are growing. Would it have been better for the judiciary to have been jammed with 600 different lawsuits, all relating to the same issue and featuring the same testimonies? More importantly, would so many of the Hillsborough victims, many still suffering from injuries, have taken legal action by themselves?
These aren’t rhetorical questions but should be asked of Seema Kennedy, chief executive for Fair Civil Justice, who warned of the growth in group litigation on ConservativeHome recently. Her organisation was launched by the Institute for Legal Reform, an arm of the U.S. Chamber of Commerce, presumably because some of the most significant collective action lawsuits in recent years have been against US multinationals.
Kennedy says the growth of US-style “opt-out” litigation – where people are automatically enrolled into a lawsuit unless they chose to opt out – and the increasing amounts of private money funding such lawsuits is bad for consumers and the justice system. She is using it as a proxy for arguing against group litigation in general.
I feel a response is merited. Taking this argument to its logical conclusion would limit access to justice for millions of Britons, and be a huge blow to our legal sector. It would deliver the opposite of what she claims.
Her first argument is to highlight the growing number of people being co-opted into group litigation. “There has been a dramatic growth in such [opt-out] actions, with 45 million Britons involved in opt-out claims in 2016, rising to 285 million in 2022.”
That is less dramatic than it sounds. Group litigation became far easier in the UK after the Consumer Rights Act of 2015 but there were, and still are, strict rules on bringing one forward. The numbers are small enough that the Government keeps a running tally of Group Litigation Orders (GLOs).
The Act also allowed “opt-out” class-action lawsuits to be pursued in England and Wales for the first time, but only for alleged infringements of parts of the Competition Act 1998, and could only be brought in the Competition Appeal Tribunal. There was an increase in opt-out cases after the Merricks V Mastercard Judgment in late 2020, which clarified some aspects of the law, but we are still only talking about four new cases in 2021. The notion that such cases are running rampant over the British legal system is implausible.
Kennedy goes on to say the UK attracts a large share of such cases. This is true, but not because the law is more amenable here, but rather because the UK attracts a large share of cases worldwide anyway.
Lastly, she also warns of “Litigation funders” – who pay for a case’s legal costs in exchange for a share of damages or settlements awarded – and “the considerable profits they can earn.“
I would hope that most ConservativeHome readers would not be against the profit motive or investment in legal services, which has long been a hallmark of our system. While the terms of litigation funding are universally confidential, industry watchers say the average payout for funders is around 30-40 per cent of damages. That’s on par with most “no win no fee” cases.
Furthermore, the UK legal services industry generates over £42 billion a year, while the total assets of the largest litigation funders stand at a mere £2 billion. It’s a tiny share of the market. Lord Justice Jackson – when making the case for external litigation funding in 2010 – said it improved access to justice and recommended it in his reforms. For this reason, many lawyers will get defensive when Kennedy, who wants to limit litigation aimed at multinationals, claims to be on the side of consumers.
Pogust Goodhead, my firm, specialises in group litigation, so obviously I have a vested interest too. But I reject the idea that such litigation reduces access to justice – an issue close to my heart. In February this year, we stood alongside hundreds of thousands of claimants over one of the biggest corporate scandals in recent history: Dieselgate.
In 2015 it emerged that multiple automobile manufacturers had been modifying vehicles to cheat emissions tests and allow extraordinary levels of pollution to spew into the air we breathe. The actions of these car companies directly worsened the health of millions of Britons. Those who oppose collective action lawsuits should address how these victims, from consumers to those affected by this pollution, could seek individual redress without clogging up the legal system?
I believe conservatism means championing business and enterprise while simultaneously fighting for what is right and fair. This means ensuring that large multinationals never feel empowered enough to run roughshod over our rights as consumers.
Moreover, Britain’s legal system is the envy of the world. People worldwide come here to use our system because it offers transparency, fairness and clarity. The legal profession is also a large contributor to our economic growth and jobs, and a sophisticated economy needs a sophisticated legal system. Without the potential for group litigations, such cases would migrate to the US instead. The English legal profession needs to keep up with legal innovations or it will be left behind in this global race.
If there are delays to the legal system, that is not because of the growth of group action litigation but the underinvestment in Britain’s legal infrastructure. The legal profession is trying its best despite years of neglect and lack of reform. Let’s focus on the real issue – improving access to justice – then making a case consistent with trying to shield large entities from accountability under the guise of consumer harm.
Alicia Alinia is Global COO of Pogust Goodhead, which specialises in group litigation.
In June 2021, over 600 bereaved family members and survivors of the Hillsborough Disaster were finally able to get compensation from the police after years of legal battles. It was a landmark case and judgment – providing closure for some families and helping others deal with injuries and psychiatric treatment. It was also one of the finer moments of our globally-admired legal system.
Most people interact with our legal system for personal and individual reasons. But there are good grounds for why collective action lawsuits exist and are growing. Would it have been better for the judiciary to have been jammed with 600 different lawsuits, all relating to the same issue and featuring the same testimonies? More importantly, would so many of the Hillsborough victims, many still suffering from injuries, have taken legal action by themselves?
These aren’t rhetorical questions but should be asked of Seema Kennedy, chief executive for Fair Civil Justice, who warned of the growth in group litigation on ConservativeHome recently. Her organisation was launched by the Institute for Legal Reform, an arm of the U.S. Chamber of Commerce, presumably because some of the most significant collective action lawsuits in recent years have been against US multinationals.
Kennedy says the growth of US-style “opt-out” litigation – where people are automatically enrolled into a lawsuit unless they chose to opt out – and the increasing amounts of private money funding such lawsuits is bad for consumers and the justice system. She is using it as a proxy for arguing against group litigation in general.
I feel a response is merited. Taking this argument to its logical conclusion would limit access to justice for millions of Britons, and be a huge blow to our legal sector. It would deliver the opposite of what she claims.
Her first argument is to highlight the growing number of people being co-opted into group litigation. “There has been a dramatic growth in such [opt-out] actions, with 45 million Britons involved in opt-out claims in 2016, rising to 285 million in 2022.”
That is less dramatic than it sounds. Group litigation became far easier in the UK after the Consumer Rights Act of 2015 but there were, and still are, strict rules on bringing one forward. The numbers are small enough that the Government keeps a running tally of Group Litigation Orders (GLOs).
The Act also allowed “opt-out” class-action lawsuits to be pursued in England and Wales for the first time, but only for alleged infringements of parts of the Competition Act 1998, and could only be brought in the Competition Appeal Tribunal. There was an increase in opt-out cases after the Merricks V Mastercard Judgment in late 2020, which clarified some aspects of the law, but we are still only talking about four new cases in 2021. The notion that such cases are running rampant over the British legal system is implausible.
Kennedy goes on to say the UK attracts a large share of such cases. This is true, but not because the law is more amenable here, but rather because the UK attracts a large share of cases worldwide anyway.
Lastly, she also warns of “Litigation funders” – who pay for a case’s legal costs in exchange for a share of damages or settlements awarded – and “the considerable profits they can earn.“
I would hope that most ConservativeHome readers would not be against the profit motive or investment in legal services, which has long been a hallmark of our system. While the terms of litigation funding are universally confidential, industry watchers say the average payout for funders is around 30-40 per cent of damages. That’s on par with most “no win no fee” cases.
Furthermore, the UK legal services industry generates over £42 billion a year, while the total assets of the largest litigation funders stand at a mere £2 billion. It’s a tiny share of the market. Lord Justice Jackson – when making the case for external litigation funding in 2010 – said it improved access to justice and recommended it in his reforms. For this reason, many lawyers will get defensive when Kennedy, who wants to limit litigation aimed at multinationals, claims to be on the side of consumers.
Pogust Goodhead, my firm, specialises in group litigation, so obviously I have a vested interest too. But I reject the idea that such litigation reduces access to justice – an issue close to my heart. In February this year, we stood alongside hundreds of thousands of claimants over one of the biggest corporate scandals in recent history: Dieselgate.
In 2015 it emerged that multiple automobile manufacturers had been modifying vehicles to cheat emissions tests and allow extraordinary levels of pollution to spew into the air we breathe. The actions of these car companies directly worsened the health of millions of Britons. Those who oppose collective action lawsuits should address how these victims, from consumers to those affected by this pollution, could seek individual redress without clogging up the legal system?
I believe conservatism means championing business and enterprise while simultaneously fighting for what is right and fair. This means ensuring that large multinationals never feel empowered enough to run roughshod over our rights as consumers.
Moreover, Britain’s legal system is the envy of the world. People worldwide come here to use our system because it offers transparency, fairness and clarity. The legal profession is also a large contributor to our economic growth and jobs, and a sophisticated economy needs a sophisticated legal system. Without the potential for group litigations, such cases would migrate to the US instead. The English legal profession needs to keep up with legal innovations or it will be left behind in this global race.
If there are delays to the legal system, that is not because of the growth of group action litigation but the underinvestment in Britain’s legal infrastructure. The legal profession is trying its best despite years of neglect and lack of reform. Let’s focus on the real issue – improving access to justice – then making a case consistent with trying to shield large entities from accountability under the guise of consumer harm.