Where two or more people have separate claims on the same, similar or related grounds to each other, the court will be able to authorise a representative party to bring proceedings on their collective behalf. Like class actions in other parts of the world, the proceedings will either take place on an "opt in" basis, where all the members of the group or “class” give their express consent to proceedings being raised, or on an "opt out" basis where proceedings are proposed on behalf of a group and if someone does not want to participate, they can decline to do so.
The legislative context to the introduction of class action law suits in Scotland is important. In addition to introducing group proceedings, the 2018 Act also introduces new ways of funding litigation. Until now in Scotland, agreements where lawyers could be paid by a share in the litigation were illegal. However, the 2018 Act changes that, so that, for example, a lawyer can agree to be paid a percentage of the total amount of the winnings in the case. The introduction of damages based agreements, where lawyers can be paid by a percentage of the total win, will mean that lawyers will be far more inclined to take on cases on a no win, no fee basis because the potential rewards available will, in many cases, justify the risks that they are taking. These new funding arrangements will make class actions more attractive both to lawyers and litigants, who would essentially never need to pay out of pocket for legal fees.
The use of class actions around the world gives us a flavour of what we might see in Scotland. In the Netherlands, the Urgenda Foundation (representing around 900 Dutch citizens) won a class action lawsuit in the Dutch Supreme Court in December 2019 which obliges the Dutch government to cut emissions by 25 per cent by the end of 2020 as compared to 1990 levels on the basis of the European Convention on Human Rights.
Environmental litigation is on the increase in every country and in others, such as the USA, class actions are focussed on big oil with groups of citizens seeking damages from oil companies. This is on the basis of research which suggests that 90 companies are responsible for two-thirds of all greenhouse-gas emissions since the industrial revolution and that oil companies knew a long time ago what the effects of their operations would be and either did nothing about it, or hid what they knew from the public. However, class actions are by no means limited to environment litigation. The current litigation against big oil mirrors the cases against big tobacco in the 80s and 90s and tobacco companies in the USA are still embroiled in class action litigation about the addictive effects of e-cigarettes.
It will be interesting to see the kind of group proceedings that are raised in Scotland once the 2018 Act comes into force, which we expect will happen later this year. From looking at how these class actions can have an impact on businesses and individuals around the world, one thing is clear, everyone from big corporations to private individuals (and their lawyers) will have to be ready for it.
Richard McMeeken is a Partner and Solicitor Advocate on the litigation team at one of the largest independent Scottish law firms, Morton Fraser.