Lloyd v Google: UK Supreme Court holds that England’s representative rule can be used to craft a class action
November 10, 2021
By Professor Suzanne Chiodo
Introduction
The UK Supreme Court released its long-awaited judgment in Lloyd v Google[1] today, deciding whether England’s representative action rule can be used for the purposes of a class action.[2] The answer is a qualified “yes” – but not for Mr Lloyd’s case, which alleged that Google had collected the personal information of an estimated 4.4 million users of the Safari Internet browser without their consent.[3] This article will analyze the Court’s judgment.[4]
The Court held that Civil Procedure Rule (CPR) 19.6 (the representative rule) could be used for a class action for damages in two circumstances:
(1) Where damages sustained by the group can be assessed in the aggregate; or(2) Where the representative rule is used only for a declaration with regard to common questions, with individual issues regarding liability or damages to be answered in individual claims to be commenced separately (the “bifurcated approach”).[5]
While the Court stated that this was a correct interpretation of the representative rule, I argue that it constitutes an expansive and liberal interpretation that will have a profound effect on England’s collective redress landscape.
The Representative Rule in Canada
The representative rule is centuries-old, is available in most Commonwealth jurisdictions, and is worded in a substantively similar fashion in those jurisdictions. In England, CPR 19.6(1) reads as follows:
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.
In Canada, the rule was the predecessor to the class action legislation that is now available in most provinces.[6] Before that legislation was passed, there were efforts in Canada to prosecute class actions by way of the representative rule. Several of these cases used the bifurcated approach.[7] The efforts were brought to a halt, however, by the Supreme Court of Canada’s ruling in Naken in 1983,[8] which stated that class actions involving separate contracts and individualised damages could not proceed under the representative rule.
Less than 20 years later, the Supreme Court of Canada overturned that ruling and held in Western Canadian Shopping Centres Inc v Dutton[9] that class actions could proceed under the representative rule provided they met certain criteria.
The Bifurcated Approach and the Supreme Court’s Framework
The UK Supreme Court’s decision in Lloyd is similar to Dutton. In both decisions, the Courts held that, in the absence of comprehensive class action legislation, the representative rule had to be interpreted in a liberal and purposive manner.[10]
The UKSC also held that the “same interest” requirement of the representative rule “needs to be interpreted purposively in light of the overriding objective of the civil procedure rules and the rationale for the representative procedure.”[11] The rationale for the representative procedure is to ensure that the representative “effectively promote[s] and protect[s] the interests of all the members of the represented class.”[12] The overriding objective of the CPR is to enable the court to deal with cases justly and at proportionate cost.[13] Crucially, the Court held that many of the considerations included in that objective[14] “such as ensuring that the parties are on an equal footing, saving expense, dealing with the case in ways which are proportionate to the amount of money involved, ensuring that the case is dealt with expeditiously and fairly, and allotting to it an appropriate share of the court’s resources while taking into account the need to allot resources to other cases” will militate in favour of allowing a representative action to proceed.[15]
Nevertheless, the UK Supreme Court’s interpretation of the representative rule is slightly more restrictive than in Dutton, because it held that damages could not be claimed if their assessment depended upon circumstances individual to each claimant.[16] Instead, the representative action must decide questions of liability (and other common questions) and then individualized damage claims must be pursued through separate actions.[17] This bifurcated approach was pursued in Prudential Assurance,[18] even though in that case damage was an ingredient of the cause of action. The UK Supreme Court in Lloyd stated that Prudential “marked a welcome revival of the spirit of flexibility which characterised the old case law.”[19]
Both Dutton and Lloyd also articulated a framework for the prosecution of class actions under the representative rule.[20]In Lloyd, the UK Supreme Court addressed the following:
- Opt-out and Notice. The Court held that the consent of those represented was not required for a representative action to be valid. Class members could apply to opt out under CPR 19.6(3) or (4), or the court could devise simple procedures for opt-out or notice, or could maintain the action on an opt-in basis.[21]
- Class definition. The Court stated that, while membership of the class should not depend on the outcome of the litigation,[22] in some cases (where the viability of the claim for damages does not depend on the size of the class or its membership) all that matters is that there is no difficulty in determining whether someone is in the class or not.[23]
- Costs. Represented persons normally will not be liable for costs, although the court can order otherwise. A litigation funder, on the other hand, is likely to be liable for costs.[24]
- Limitation periods. These are tolled for represented persons.[25]
- Distribution of damages. The Court recognized that difficulties might arise with the distribution of damages in a representative action, especially as there may be no authority for litigation funders to claim their share. Nevertheless, as this point was not argued in this case, the Court did not take a position.[26] It did state, however, that where aggregate damages are awarded to a group, how that group divides the damages as between its members is irrelevant to the representative action question: “what the claimants did with any damages recovered was a matter for them or between them … and not between them and the defendants.”[27]
The Expansive Interpretation of “Same Interest”
Why is the UK Supreme Court’s interpretation of the representative rule expansive? The Court held that the three-part test articulated in Ellis[28] (that, to meet the “same interest” requirement of the rule, the class must have a common interest, a common grievance, and seek relief beneficial to all) must not be rigidly applied or taken out of context.[29] Prior jurisprudence interpreted the three-part test as a fairly rigid requirement that only allowed the representative rule to be used for the litigation of rights held by a group – that is, indivisible rights – and not individually-held private rights. Even if the rights were identical, they would not meet the “same interest” test if one class member could sue on her own rights without affecting the rights of any other class member. This was the situation in Lloyd, where redress arising from the very same data breach had in fact been pursued in individual cases.[30]
However, the Court in Lloyd held that, “it is not a bar to a representative claim that each represented person has in law a separate cause of action nor that the relief claimed consists of or includes damages or some other monetary relief.”[31] It held that, if damages can be assessed in the aggregate, then separate causes of action can be pursued under the representative rule,[32] but if damages require individualized enquiries then those damages must be pursued in individual actions following the determination of the common questions in the representative action.[33]
The Court’s interpretation of “damage” under s 13 of the Data Protection Act meant that individualized enquiries were necessary in this case, and therefore damages could not be pursued as part of the representative action (Mr Lloyd had not taken the bifurcated approach). It was for this reason that the Court held that Mr Lloyd could not proceed under the representative rule.[34]
Conclusion
The UK Supreme Court’s interpretation of the representative rule is more revolutionary than appearances would suggest. While the Court stated that its interpretation of the “same interest” requirement was consistent with the three-part Ellistest, that interpretation is a departure from most of the prior jurisprudence on the issue.
In addition, the approval of the bifurcated approach opens the doors to the prosecution of a wide range of class actions under the rule.[35] For example, the English Court of Appeal recently held that a representative action on behalf of communities in Nigeria affected by an oil spill could not proceed,[36] because the represented parties would individually need to show sufficient damage to their land to justify the remediation relief sought, and this was not a subsidiary matter but “an integral part of the overall issues raised by the proceedings”.[37] While this indicates that the bifurcated approach might not be appropriate, a similar case might be viewed differently following the UK Supreme Court’s decision in Lloyd.
Furthermore, the decision may prompt the UK government to again consider the possibility of generic (that is, cross-sectoral) class actions legislation. The only opt-out class actions regime currently available in the UK is in the competition law sector.[38]
Early indications are that the Lloyd decision could turn out to be England’s Dutton. Only time will tell – there is little doubt, however, that it will have a significant impact on England’s collective redress landscape.
[1] Lloyd v Google LLC [2021] UKSC 50 [Lloyd].
[2] In this case note, references to “England” will refer to the jurisdiction of England and Wales. The UK Supreme Court is the final court of appeal for civil cases for all the UK’s jurisdictions (England, Wales, Scotland and Northern Ireland). The Civil Procedure rules apply to England and Wales.
[3] In breach of s 4(4) of the Data Protection Act 1998, 1998 c 29 [DPA].
[4] While the Court also considered the meaning of “damage” under DPA s 13, the focus here is on the representative action.
[5] The Supreme Court of New Zealand endorsed a similar two-stage approach in Southern Response Earthquake Services Limited v Ross [2020] NZSC 126.
[6] The exceptions are Québec, which has never had a representative action rule but was the first Canadian province to introduce class actions (in 1978), and Prince Edward Island, which does not yet have class proceedings legislation.
[7] Shaw v Real Estate Board of Greater Vancouver (1973), 36 DLR (3d) 250 (BCCA); Naken et al v General Motors of Canada Ltd et al (1979), 21 OR (2d) 780 (CA); revd [1983] 1 SCR 72.
[8] GM (Canada) v Naken, [1983] 1 SCR 72.
[9] 2001 SCC 46 [Dutton].
[10] Ibid at para 51; Lloyd, supra note 1 at para 68.
[11] Lloyd, ibid, at para 71.
[12] Ibid at para 70.
[13] CPR 1.1(1); Lloyd, ibid, at para 75.
[14] CPR 1.1(2).
[15] Lloyd, supra note 1 at para 75.
[16] Ibid at para 50.
[17] Ibid at para 48.
[18] Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229 (overturned on other grounds: Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1981] Ch 204 (CA)) [Prudential].
[19] Lloyd, supra note 1 at para 48. The Court found that Emerald Supplies Ltd v British Airways plc [2010] EWCA Civ 1284 [Emerald] did not contest the part of the Prudential decision that held that the bifurcated approach could be pursued even if damage was an ingredient of the cause of action: at para 58.
[20] Dutton, supra note 9 at 38-44.
[21] Lloyd, supra note 1 at para 77.
[22] This was one of the issues in Emerald Supplies, supra note 19.
[23] Lloyd, supra note 1 at para 78.
[24] Ibid at para 79.
[25] Ibid at para 81.
[26] Ibid at para 83.
[27] Ibid at para 54, citing Independiente Ltd v Music Trading On-Line (HK) Ltd [2003] EWHC 470 (Ch) at paras 28 and 39.
[28] Duke of Bedford v Ellis [1901] AC 1 (HL) [Ellis].
[29] Lloyd, supra note 1 at para 70.
[30] Vidal-Hall v Google Inc [2016] QB 1003.
[31] Lloyd, supra note 1 at para 80.
[32] Ibid at para 82.
[33] Ibid at paras 80-81.
[34] Ibid at paras 84-89 and 144-157.
[35] Data protection cases are the exception. While numerous cases in this area have been commenced under CPR 19.6 and have been waiting in the wings pending the Lloyd judgment, the UK Supreme Court’s interpretation of “damage” under DPA s 13 indicates that those claims cannot proceed.
[36] Jalla v Shell International Trading and Shipping Co Ltd [2021] EWCA Civ 1389.
[37] Ibid at para 97.
[38] Competition Act 1998, 1998 c 41 (as amended by Schedule 8 of the Consumer Rights Act 2015, 2015 c 15). In Scotland, the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 came into force on 31 July 2020. This introduces a generic collective proceedings regime, initially on an opt-in basis (although the Act also contains an option for an opt-out mechanism).
