Singapore
While Singapore law does not provide specifically for collective actions, such actions can be conducted in the Singapore courts by two mechanisms. First, they may be brought by way of representative proceedings, with the permission of the court. In considering whether to permit such an action, the Court will weigh the practical and economical advantages of asserting and enforcing a claim collectively against any prejudicial consequences for the respondent. The Singapore courts have also very recently confirmed the possibility of an action by a designated entity which has taken assignment of multiple individual claims. If pursuing this avenue, care must be taken to ensure that the arrangement does not offend the prohibition against assigning a bare cause of action or the proceeds of such action to a party which otherwise has no legitimate connection to the action – such an outcome may be avoided by ensuring that the entity is controlled and the action is funded by the parties with the underlying interest in the claim, and the litigation entity should not retain the benefit of the fruits of litigation, which should be distributed to those with an interest in the entity/claim.
Representative actions remain a developing area of the law in Singapore. It is likely that the courts will develop the jurisprudence and procedure relating to the conduct of such proceedings in future proceedings.
What forms of collective actions are permitted in this jurisdiction and under what authority?
The avenues for collective redress under Singapore law are:
- by way of representative proceedings under Order 15 Rule 12 of the Singapore Rules of Court, which provides that where numerous persons have the same interest in proceedings, the proceedings may be commenced and continued by one or more claimants as representing the other persons; or
- by assigning the individual claims to an entity which will then act as the claimant in prosecuting the claims.
Who may bring them?
Representative proceedings may be commenced by any person(s) who has the same interest as the persons whom he seeks to represent. In determining whether persons have the same interest, the court will consider the following factors:
- The class of represented persons must be capable of clear definition. This is critical because it identifies the individuals who are entitled to relief and who will be bound by the judgment.
- The proposed representative(s) must adequately represent the interests of the entire class and must be capable of prosecuting the interests of the entire class.
- There must be significant issues of fact or law common to all the claimants. The court must compare the significance of the common issues between the claimants with the significance of the issues which differ between them.
- All the claimants must have the same interest in the relief granted.
Alternatively, the Singapore courts have recently ruled that proceedings may be commenced by an entity to which the individual claims have been assigned. The use of a special purpose vehicle (“SPV”) incorporated specifically to prosecute the claims is permissible, as long as there is no indication that the arrangement would allow a third party who otherwise has no interest in the action to take control of or wager on the litigation. In determining whether the arrangement is permissible, the court will consider the following factors:
- Whether the SPV is controlled by the individuals with an underlying interest in the claim (the assignors of the claim), or by a disinterested third party;
- Whether the action is funded by the assignors of the claim or by a third party. Third-party funding of the costs of legal proceedings by an entity that is unconnected to the dispute is generally prohibited under Singapore Law, except in relation to specific categories of proceedings (see below);
- Whether the SPV would retain the benefit of the proceeds of the litigation; and
- Whether there is otherwise any evidence that points to the existence of a third party financing or controlling the litigation.
Opt in or opt out?
Limitations?
Whether an action is allowed to proceed as a representative action is subject to the court’s discretion. The court must be persuaded that it is appropriate for the case to proceed as a representative action, having regard to factors such as whether the respondent would be disadvantaged (e.g., the inability to raise separate defences against different claimants), as well as cost considerations. The Singapore Court of Appeal has stated that, while representative actions offer a practical and economical method of asserting and enforcing a claim, this must be weighed against any prejudicial consequences for the respondent in the representative action.
Further, a representative action is not available in the normal way in relation to proceedings which concern (a) the administration of the estate of a deceased person; (b) property subject to a trust; and (c) the construction of a written instrument, including a statute. However, in such cases, the court may appoint a person to represent the class of interested persons where the class includes persons who are not readily ascertainable or who cannot be found, or where the court otherwise regards it as appropriate to do so.
Where an action is commenced through an assignee (such as an SPV), the court can dismiss the action if it finds the assignment to be void – this could be the case where the assignment documents do not comply with the necessary formalities, or where the assignment would violate the rules against the bare assignment of claims or proceeds of action to a third party with no connection to the action, based on the factors mentioned above.
Judge or jury?
Judge – there is no jury trial in Singapore.
How are such actions funded?
There are no specific rules in relation to how representative actions may be funded in Singapore. However, there is a general prohibition in Singapore law against third-party funding of the costs of legal proceedings by an entity that is unconnected to the dispute. This general prohibition is subject to limited exceptions in respect of certain proceedings, including domestic and international arbitration, proceedings commenced in the Singapore International Commercial Court (“SICC”), and mediation or court proceedings arising from such proceedings. Where the action is commenced through an assignee, the courts have indicated that the existence of third-party funding might render the arrangement impermissible, but whether this position extends to the categories of proceedings for which third-party funding is expressly permitted has yet to be tested in the Singapore courts.
Is pre-trial disclosure available?
Pre-trial disclosure is available. The same procedure to disclosure applies as with non-representative proceedings.
Likely future scope and development?
The Singapore Court of Appeal has indicated that it will take a broad and flexible approach to considering whether it is appropriate for an action to proceed as a representative action, as well as in administering and shaping the representative proceedings as they unfold.
The interface between third-party funding and collective actions (whether pursued by way of a representative action or through assignment to a litigation vehicle) is also a developing area of the law. It is likely that courts in future representative or assignee-based proceedings will take the opportunity to develop the jurisprudence and procedure relating to the conduct of such proceedings.
