Collective Redress & Class Actions 2023

Collective Redress and Class Actions – Global Overview

Globally, the mechanisms for collective redress are developing at a rapid pace. Although the notion of having the interests of multiple parties represented as a group within proceedings is not a foreign concept for many jurisdictions around the world, in many regions the formalisation of collective redress mechanisms is still a fairly recent development. Even where such systems previously existed in some countries, their use to date has been limited – until now.

The policy motivation behind this growing global trend is reflective of a number of separate but convergent phenomena. For one, there is a shifting attitude among claimants and claimant law firms favouring these types of claims. There has been a resultant response from the judicial system, including an overarching emphasis on the public interest in dealing with large proceedings cost-effectively and time-efficiently. Furthermore, the legal rights of individuals have expanded in many areas, and litigants are more aware than ever of these legal rights. Universal issues, such as those relating to the environment or corporate social responsibility concerns, also lend themselves to group proceedings where, arguably, “society at large” could soon be seen as the proper claimant. There is also increased publication of legal issues and/or group legal proceedings against corporate giants across the globe in a modern and increasingly online world where information exchange is rapid and knows no borders.

Jurisdictions in which collective redress and class action systems have long been recognised and used, such as the USA, have been studied as potential models for countries that have more nascent systems, including most notably, the EU, in the development of its new uniform system. Countries that are adopting or refining their systems appear to consider that they have the benefit of picking and choosing components of their systems to reflect best practices across the board. The most contentious choices within those available for collective redress mechanisms still appear to be those that are at the core of any system: the composition and mechanism for joining a class (the “opt-in” versus the “opt-out” system), the scope of subject matter that can be pursued through these mechanisms, and the ability to deploy litigation funding, and any limits on the same.

In the wake of highly publicised proceedings, and extremely high awards of damages, particularly in the USA, many other countries that are less familiar with these mechanisms appear to remain cautious – possibly in an attempt to prevent the feared “floodgates” from being opened to such claims, and their systems being overwhelmed by them. The resistance towards litigation funding in some countries is on the same basis, and also reflects a general reluctance towards encouraging a perceived “commercialisation” of the legal system in this way. This trend is reflected in some EU member states using the discretion granted to them by their many individual mechanisms when adopting the EU-wide system, for example. However, some jurisdictions are more open to change and are becoming more open to third-party funding and opt-out regimes as a means of facilitating access to justice, particularly in light of the growing trend for collective actions in respect of environmental, social and governance issues.

And yet, even with the reservations of many countries and the reluctance of some to adopt a full-blown class action regime, the increase in these types of proceedings is inevitable across the world. Even in countries where a more formalised collective redress system has seemed further off, the existing legal mechanisms in those countries often provide for consolidated or group proceedings, even if by another name. The trends within those countries are therefore likely to mirror global trends in respect of increased focus and use of group-proceeding mechanisms.

As you read through this edition of the Collective Redress & Class Actions Global Practice Guide, we urge you to take note of the developing trends, which, although country-specific, do reflect global themes. There are likely to be significant developments as we move into further editions of this guide, reflective of the fact that this area is one in which we have only recently begun what is no doubt going to be a very long road to more normalised and frequent class actions across the world.

We hope this resource will be invaluable to those navigating this burgeoning area – and look forward to updating this guide in the future to ensure it remains a practical tool for those interested in this topic and navigating its complex and ever-changing legal framework.