Global Guide: Collective Redress

Collective redress procedures – that is, court proceedings in which a number of claimants with similar or related interests group together to bring a combined action against a defendant or group of defendants – are increasingly important in civil litigation.

The availability and effect of collective redress procedures differ widely between jurisdictions, with some countries embracing the concept and permitting collective actions in a large variety of claims, while in others the procedure may only be used in limited circumstances and for specified causes of action. What is clear, however, is that the impact of the Covid-19 pandemic is causing parties across the globe to consider how collective procedures might be used to bring claims for compensation in a number of different contexts. Other features of modern life, such as large-scale data breaches, are also likely to be met with collective claims. It is vital, therefore, that businesses with cross-border operations are aware of the differences in approach to dispute resolution – the potential risks and available opportunities – they may face across their global market.

Collective actions and the third party funding that backs them enable individuals to pursue cases that would individually be practically and economically unviable. They are therefore often seen as a “claimant friendly” procedure. However, this method of dispute resolution does have advantages for defendants too. If a large number of claims is inevitable, a method of dispute resolution has to be found: leaving good claims for compensation unsatisfied is not satisfactory from anyone’s perspective and carries real reputational implications. A collective redress procedure may also enable a defendant to pursue points of law – for example as to causation – which can be determined as a precedent for the class as a whole but which may not be realistic to pursue in an individual claim with limited sums at stake. Moreover, litigating a large number of individual claims is consuming of time and other resources and risks inconsistent decisions on points which may be of limited financial impact in a single case but which become very expensive when viewed across a class.

In addition, dealing with a large number of similar or related disputes has advantages for the judicial authority concerned, reducing court time, cost and the risk of inconsistent – and therefore appealed- decisions.