Kerry Underwood

REPRESENTATIVE ACTIONS

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Jalla and others v Royal Dutch Shell plc and others [2020] EWHC 2211 (TCC)

the High Court held that the claimants in a representative action did not satisfy the “same interest” requirement under CPR 19.6(1) and struck out the representative elements of the proceedings, leaving only the personal claims of the two lead claimants.

CPR 19.6(1) provides:

“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.”

The proceedings were brought by the two lead claimants “and others” in 2017, after an oil spill in Nigeria. “Others” included thousands of individuals and hundreds of communities, all allegedly exposed to the oil spill.

Here the court carried out an exhaustive review of the authorities, many of which were decided under the previous incarnation of CPR 19.6(1) which was contained in RSC Ord 15, r12 (1).

In particular the court examined in detail, the leading case of

The Duke of Bedford v Ellis and others [1901] AC 1

which remains good law.

Here, in Paragraph 60, the court set out the principles drawn together from the case law:

“i) Representative proceedings are not the only vehicle for multi-party litigation: see the citation from Zuckerman at [52] above;

ii) The requirement in CPR r. 19(6)(1) that persons have “the same interest” is statutory and is not to be abrogated or substituted by reference to the overriding objective. That said, the rule is to be interpreted having regard to the overriding objective and should not be used as an unnecessary technical tripwire: see [44]-[45], [53] above;

iii) The purpose of a representative action is to accommodate multiple parties who have the same interest in such a way as to go as far as possible towards justice rather than to deny it altogether. This is done by adopting a structure which can “fairly and honestly try the right”: see the citation from page 10 of the Duke of Bedford case at [31] above;

iv) It is for this reason that representative proceedings may be appropriate where the relief sought is in its nature beneficial to all whom the lead claimants propose to represent: see the citation from page 8 of the Duke of Bedford case at [31] above and see [47] above;

v) The “same interest” which the represented parties must have is a common interest, which is based upon a common grievance, in the obtaining of relief that is beneficial to all represented parties: see [47] above. It is not sufficient to identify that multiple claimants wish to bring claims which have some common question of fact or law;

vi) It is not necessary that the claims or causes of action of all represented parties should be congruent, provided that they are in effect the same for all practical purposes: see [39] and [49] above;

vii) The existence of individual claims over and above the claim for relief in which the represented parties have the same interest does not necessarily render representative proceedings inapplicable or inappropriate: see [38] above. The question to be asked is whether the additional claims can be regarded as “a subsidiary matter” or whether they affect the overall character of the litigation so that it becomes or approximates to a series of individual claims which raise some common issues of law or fact: see [33] above;

viii) Similarly, while the court will pay little attention to potential individual defences that are merely theoretical, the existence of potential defences affecting some represented parties’ claims but not those of others tends to militate against representative proceedings being appropriate. One reason for this is that it may be procedurally difficult or impossible to accommodate individual defences in representative proceedings, though the rules make provision for affected parties to be protected: see [53] above. Another is that if a defence is available in answer to the claims of some but not others of the represented class they have different interests in the action: see [56] above. Adopting slightly different language, I would add that the existence of individual defences calls into question whether the action really is a claim for relief that is beneficial for all or is a collection of individual claims sharing some common issues of fact or law;

ix) If the criterion of “the same interest” is satisfied the Court’s discretion to permit representative proceedings to continue should be exercised in accordance with the overriding objective.”

The judge also clarified the test to determine whether a person is in a particular represented class, suggesting that the touchstones should be ability to clearly define the class without internal conflicts, ability to evidence inclusion within the class, whether by self-certification or otherwise, and sharing the same interest in the outcome (Paragraph 68).

Applying the relevant principles, the judge found that these were individual claims because each claimant needed to prove that the oil spill caused them damage.

Estoppel

The court also considered the law of estoppel including:

(a) estoppel by convention;

(b) litigation estoppel and the doctrine prohibiting approbation and reprobation; and

(c) issue estoppel.

The court dealt with these matters at paragraphs 81 to 83:

“81. Litigation estoppel or the doctrine prohibiting approbation and reprobation may arise where a party adopts two inconsistent attitudes towards another party. In appropriate cases “he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance”: see Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320 at 1329 per Lord Browne-Wilkinson VC. It reflects “the unwillingness of the courts to countenance inconsistent conduct by one party where this is prejudicial to the other”: see Benedictus v Jalaram Ltd (1989) 58 P. & C.R 330 at 344-345 per Bingham LJ. As the explanatory example given by Bingham LJ in Benedictus illustrates, it is founded upon the Court’s view that for a party to take unfair litigation advantage of another by founding on the truth of an assertion of fact but subsequently to deny that fact in order to obtain further litigation advantage is (or may be) unconscionable.

82. The third type of estoppel upon which the Claimants rely is based on the concept of abuse of the process articulated by Wigram VC in Henderson v Henderson (1843) 3 Hare 100, 115. As such it may stretch wider than a “pure” issue estoppel such as described in Arnold v National Westminster Bank plc [1991] 2 AC 93,105E:

“Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant, one of the parties seeks to reopen the issue.”

83. The Henderson v Henderson line of authority has been helpfully summarised by Pepperall J in Mansing Moorjani v Durban Estates Limited [2019] EWHC 1229 (TCC) at [17.4]:

“Even if the cause of action is different, the second action may nevertheless be struck out as an abuse under the rule in Henderson v. Henderson where the claim in the second action should have been raised in the earlier proceedings if it was to be raised at all. In considering such an application:

a) The onus is upon the applicant to establish abuse.

b) The mere fact that the claimant could with reasonable diligence have taken the new point in the first action does not necessarily mean that the second action is abusive.

c) The court is required to undertake a broad, merits-based assessment taking account of the public and private interests involved and all of the facts of the case.

d) The court’s focus must be on whether, in all the circumstances, the claimant is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.

e) The court will rarely find abuse unless the second action involves “unjust harassment” of the defendant”.”

Written by kerryunderwood

August 25, 2020 at 8:17 am

Posted in Uncategorized

2 Responses

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  1. The claimants’ solicitors, Johnston & Steller, appear to have provided a less than stellar performance here.

    Pro Bono

    August 25, 2020 at 12:01 pm

  2. 🙂 See Paragraph 26 (ii) of the judgment.

    Kerry

    kerryunderwood

    August 25, 2020 at 12:12 pm


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