The High Court has recently handed down a judgment emphasising the need for cooperation between claimant solicitors in the context of the maintenance of the group register.
We have blogged previously about the risks that can arise for claimants, as well as their funders, when claimants’ claims are not properly scrutinised before being added to the group register. However, here claims had been struck out as a result of a claimant firm’s failure to ensure that their clients were added to the group register. Freshfields acted for the successful defendants.
The background to the judgment is yet another instance of profound disagreement between firms of solicitors representing claimants in the VW NOx Emissions Group Litigation (with a previous disagreement involving different firms having been taken to the Supreme Court).
Here, the Lead Solicitor responsible for the group register requested that claimant firms provide their client’s group register entries by means of a template spreadsheet which had been agreed with the defendants. However, one claimant firm refused to do so, which resulted in that firm’s 49 clients failing to join the group register by the cut-off date. In response, the claimant firm sought, and by consent was given, relief from sanctions to enable its clients to be entered on the group register late. However, it then failed to inform the Lead Solicitor that relief from sanctions had been granted, and also failed a second time to provide its clients’ group register entries in the required format (contravening an unless order). As such, its clients’ 49 claims were struck out. The claimant firm then delayed in issuing its second application for relief from sanctions, which it failed to pursue for over two years. The Court refused to grant relief and the 49 claimants’ claims remain struck out.
In her judgment, applying Denton to the application of CPR 3.9, the Senior Master held:
- It was “the responsibility of all Claimant solicitors to cooperate with the Lead Solicitors to enable them to comply with their obligations under the GLO”. By refusing to do so, the firm in question breached CPR 1.3 which requires parties to assist the Court with the overriding objective.
- The failure to join a group register prior to a cut-off date was “clearly a serious and significant breach of a court order” and the “second breach of an extended cut-off date would not equally, if not more so, be a serious and significant breach.”. The first stage of the Denton test was met.
- Further, there was “no good reason for the breach.” The reason for the breach was the firm’s "failure to comply with its obligations to the court and to act reasonably and proportionately in the group litigation." The second stage of the Denton test was met.
- Nor did all of the circumstances of the case excuse the breach. The third stage of the Denton test was met. In particular, it would be contrary to the overriding objective and the efficient progress of group litigation to deem that the 49 claimants had been included in the group register since 16 April 2019 and allow those claimants to effectively remove themselves from the group for a period of time whilst taking advantage of important steps that had taken place in the litigation since then. The fact that those claimants were not available for the lead case selection process which had taken place in the meantime, or the various hearings which had taken place, was significant.
- The claimant firm’s delays were sufficient grounds to refuse the application. The firm was criticised for taking 2.5 months to issue its application and also for failing to take any steps to list the hearing for over 2.5 years.
- The claimant firm’s conduct had been “dilatory, inefficient uncooperative, disregarding of court orders and inconsistent with their obligations to their clients and to the court.” Their criticism of the Lead Solicitors was found to be “reprehensible”.
As a consequence, the claimant firm’s clients were ordered to pay approximately £56,000 in respect of the Defendants’ and Lead Solicitors’ costs. This is in addition to their own costs, as well costs previously ordered.
The judgment is a reminder of the risks to clients when claimant solicitors fall out in group litigation. Whilst insurance might provide some assistance, a costs liability in excess of £1,100 per claimant reinforces the fact that engaging in group litigation is obviously not without risk.
Engaging in group litigation is obviously not without risk