It is fair to say that the highly anticipated judgment of the Supreme Court in Lloyd v Google which arrived on 10 November, was not the huge game-changer (for both litigators and funders, and data controllers) that some had predicted. The Court unanimously allowed Google's appeal, restoring the order made by the first instance judge that the representative action should not proceed.
Google's win represents a coup for data controllers because the Supreme Court's ruling will almost certainly put the brakes on the momentum that class actions in respect of breaches of data protection laws had been gathering. It now stands as the leading decision on representative actions brought under the Civil Procedure Rules ("CPR") 19.6, and no doubt will have prompted claimant lawyers to reassess the viability of future claims under both the Data Protection Act 1998 (the "DPA 1998") and the UK GDPR.
The judgment is significant in its examination of two key issues:
- from a litigation perspective: the circumstances in which a class action can be brought as a representative action pursuant to CPR 19.6 on an opt-out basis. If the Supreme Court had allowed the claim to proceed, it would have made the class action regime in the UK much more simple, practical and attractive to claimants and litigation funders (please see text box for further details); and
- from a data protection perspective: the circumstances in which damages for 'loss of control' can be awarded for breach of data protection laws (specifically the DPA 1998, which was the main data protection law in force at the time of the alleged breach, and which has since been superseded by UK GDPR).
Collective proceedings and representative actions
Collective proceedings, which the Supreme Court dubbed a "recent phenomenon in English law", are often associated with mass/class actions which are particularly common in the US. Representative actions under CPR 19.6 are a type of collective proceeding, however they are not new; they have existed for hundreds of years (their legislative basis arising out of the Judicature Act of 1873). In essence, representative actions under CPR 19.6 relax the requirement for all persons materially interested in the subject-matter of an action to be a party to it, by allowing a party (claimant or defendant) to represent all others who have the same interest as them in that action. Historically representative actions were used by communal groups, company and union members. For a rather quaint example, see Duke of Bedford v Ellis  AC 1 in which six individuals sued the Duke of Bedford, who owned Covent Garden Market, on behalf of themselves and all other growers of fruit, flowers, vegetables, roots and herbs, to enforce certain preferential rights claimed under the Covent Garden Market Act 1828 to stands in the market.
Today, CPR 19.6 provides that:
(1) Where more than one person has the same interest in a claim –
(a) the claim may be begun; or
(b) the court may order that the claim be continued,
by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.
(2) The court may direct that a person may not act as a representative.
(3) Any party may apply to the court for an order under paragraph (2).
(4) Unless the court otherwise directs any judgment or order given in a claim in which a party is acting as a representative under this rule –
(a) is binding on all persons represented in the claim; but
(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court.
Opt-out / Opt-in
Notably, there is no requirement to obtain the consent of represented parties under CPR 19.6, only a requirement for individuals to share the "same interest" in an action. The action can then proceed on an "opt-out" basis. CPR 19.6 is sufficiently flexible to allow the Court to require individuals to be notified of the action, but this is not a precondition.
There are two principal additional ways in which collective proceedings may be brought in England & Wales. First, in certain circumstances a class representative may bring collective proceedings, on an opt-in or opt-out basis, in the Competition Appeal Tribunal in respect of competition claims that raise the same, similar or related issues of fact or law. Second, collective proceedings may be brought by way of a Group Litigation Order ("GLO"). However, the GLO procedure requires claimants to take active steps to join the action, i.e. individuals must "opt-in".
"Opt-out" proceedings offer significant advantages when compared to "opt-in" proceedings. In practice, claimants are often reluctant to take active steps to pursue claims, particularly if the loss suffered by each individual is small. Opt-out proceedings allow for large numbers of low-value claims to be pursued on a collective basis by a single class representative, without the need for any active participation by the affected individuals. As a result, small claims that would not otherwise be viable may be pursued, often with the assistance of third-party litigation funding.
For further information on mass claims procedures in England and Wales please see the Travers Smith Dispute Resolution Yearbook 2021.