Representative actions – “same interest” test proves a high bar

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The UK Court of Appeal endorsed a strict approach to the “same interest” test when it upheld a decision to strike out the representative element of a claim brought on behalf of 27,800 individuals and 457 communities in Nigeria, seeking redress for damage allegedly caused to land and water by a 2011 oil spill in the Bonga oilfield. Even though the court agreed that the claims of Messrs Jalla and Chujor, and those they represented, raised some common issues of law and fact, it held that the group of claimants did not share the “same interest” as required by the UK Civil Procedure Rules (CPR) rule 19.6 in order to bring a representative action: Jalla & anr v Shell International Trading and Shipping Co Ltd & anr (Appeal (2): Representative Action) [2021] EWCA Civ 1389

The second respondent operates a Floating Production Storage and Offloading facility in the Bonga oilfield, 120km off the coast of Nigeria. During an oil transportation operation in December 2011, something went wrong and a significant amount of oil spilled into the sea, an act for which the second respondent is alleged to be liable. The first respondent is alleged to be liable for the conduct of the master and crew of the relevant vessel.

The appellants are two individuals from the Nigerian Bonga community. They issued a claim on behalf of themselves and 27,800 individuals and 457 communities based along the Bonga coastline as “represented parties” under CPR 19.6, for damage to the land and water caused by the oil spill. They are seeking remediation relief either in the form of an injunction for the respondents to clean up the damage or for compensation for the represented parties to do the clean-up themselves.

The respondents applied to strike out the proceedings on various grounds, including that they could not properly constitute a representative action because the two appellants and those they purported to represent did not all have the “same interest” as required by CPR 19.6.

Representative actions

CPR 19.6 allows a claim to be brought by or against one or more other persons who have the same interests as those being represented. The principles behind the regime are to save time and costs and to facilitate efficient case management.

It is ‘opt out’ in nature, meaning that it does not require individual claimants to be joined as parties to the claim or even identified. Represented parties therefore are not automatically subject to disclosure or costs obligations and do not need to participate actively in the proceedings at all. The representative claimant has full control over the conduct of the case. However, any judgment or order will be binding on all represented persons.

It is the closest mechanism under English law to the U.S. style “class action”, but mass tort litigations remain uncommon before the English courts, in contrast to the U.S., as the English courts have traditionally applied a restrictive approach to interpreting the “same interest” requirement. Claimants wishing to bring group actions in the UK courts therefore have typically tended to rely on Group Litigation Orders (GLOs), which only require “common” or “related” issues of fact or law. The economic and administrative burden is greater, though, given the need for upfront book-building and still having to deal with individual claims.

There has, however, been renewed focus on representative actions since the case of Lloyd v Google entered the UK courts and in particular when the Court of Appeal allowed a representative action brought by Mr Lloyd on behalf of 4.4m iPhone users for damages for loss of control of their data to proceed (this decision has since been overruled).[1] It is clear that the claimants and Jalla took inspiration from this decision – much of the argument in Jalla was about trying to distinguish Lloyd.

The strike-out application in Jalla v Shell

The first instance judge adopted the restrictive interpretation approach, finding that the represented parties did not have the “same interest” and so the case could not proceed as a representative action. There were some common issues such as the fact of the oil spill and how and why it occurred, but the judge found that issues such as causation, loss and damage would have to be considered on an individual basis.

Each represented party would have to prove that this particular oil spill had caused them damage (as there were numerous other cases of oil pollution in the area) and the degree of that damage (as some individuals may have suffered more extensive damage than others). Some of the represented parties may also have had limitation issues. Even the causation issues were different as there was the possibility that other forms of pollution, as well as pollution by other parties, had caused the alleged damage. As such, it could not be said that the represented parties had the “same interest”. Instead, the judge concluded that the claim represented a very large number of individual claims requiring individual consideration and proof of damage and the generation of individual defences.

The appellants appealed on the grounds that:

  • the judge had erred in finding that the appellants and the represented parties did not have the “same interest”; and
  • the judge had erred by holding that this case was materially distinguishable from Lloyd.

The represented parties did not have the “same interest”

The Court of Appeal upheld the first instance decision in respect of the “same interest” test and agreed with the first instance judge that the case was materially distinguishable from Lloyd.

It should be noted here that, shortly after the Court of Appeal’s decision in Jalla, the Supreme Court overturned the Court of Appeal’s decision in Lloyd and unanimously refused to allow Mr Lloyd’s claim to proceed as a representative action. However, even though the Court of Appeal had proceeded in Jalla on the basis that its decision in Lloyd was good law and that the case could proceed as a representative action, it was not persuaded that Jalla could do so as the position of the claimants in Jalla was too different.

The Court of Appeal observed that the primary purpose of CPR 19.6 is to save time and cost because a representative action avoids the “granularity” of considering the individual claims of each of the represented parties. The court held that the primary purpose of a representative action could not be achieved in this case because the issues of limitation, causation, loss and damage would each have to be addressed on a case-by- case basis. This was, in the Court of Appeal’s view, in contrast to Lloyd where the claim was deliberately formulated so that the represented parties were claiming for a uniform amount of damages, based on the same cause of action of loss of control of their browsing information. No claim was brought based on personal circumstances that might vary among class members, such as distress or the volume of data abstracted. Instead, Mr Lloyd had argued that damages should be awarded for mere infringement (effectively strict liability).

The existence of “individualised claims” would not always preclude a representative action but the Court of Appeal held that it is a question as to whether those individualised claims can be regarded as subsidiary to the main issue that is the subject of the proceedings. The individualised issues raised in Jalla went to loss, damage and causation and therefore were not subsidiary issues at all. They were just as critical as the common issues to any prospects of success or relief.

The Court of Appeal also held that there is a need for certainty from the outset about the membership of the represented class. In this case, there was not sufficient certainty as each represented party could only become one if they could show that they had suffered damage as a result of the oil spill, which would require a trial.

Comment

The case of Jalla v Shell provides a useful distillation of the principles behind the representative action regime. However, it also highlights the difficulties in bringing claims under CPR 19.6 given the requirement for the “same interest” between the representative claimant and the represented parties. Between this decision and the Supreme Court’s decision in Lloyd, the regime is likely to stay confined to a very narrow group of cases and with the floodgates to mass tort litigations remaining firmly closed for now.

Footnote:

[1] [2019] EWCA Civ 1599.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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