Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> THOMPSONS SOLICITORS SCOTLAND v JAMES FINLAY (KENYA) LTD [2022] ScotCS CSOH_12 (02 February 2022)
URL: http://www.bailii.org/scot/cases/ScotCS/2022/2022_CSOH_12.html
Cite as: 2022 SLT 731, [2022] ScotCS CSOH_12, 2022 Rep LR 58, [2022] CSOH 12, 2022 SCLR 47, 2022 GWD 4-55

[New search] [Printable PDF version] [Help]

OUTER HOUSE, COURT OF SESSION

[2022] CSOH 12

GP2/21 & GP3/21

OPINION OF LORD WEIR

In the Group Proceedings Applications brought by

THOMPSONS SOLICITORS SCOTLAND

Applicant

against

JAMES FINLAY (KENYA) LIMITED

Defender

Applicant: Smith QC; Thompsons Solicitors Scotland

Defenders: J G Thomson; BLM

2 February 2022

Introduction

[1]

There are two applications before the court. The first application is submitted under

rule 26A.5 of the Rules of Court. It is an application in terms of section 20(3)(b) of the Civil

Litigation (Expenses and Group Proceedings) (Scotland) Act 2018, seeking the court's

permission for the applicant to be a representative party to bring group proceedings against

the defender. The second application is submitted under rule 26A.9 of the Rules of Court. It

is an application in terms of section 20(5) of the 2018 Act, seeking the court's permission to

bring group proceedings against the defender in respect of allegedly unsafe working

practices, conditions and systems of work at Kenyan tea plantations which are said to have

given rise to musculoskeletal injuries amongst current and former employees.

Procedural background

[2]

On 7 October 2021 I pronounced interlocutors granting warrant for service of both

applications, appointing advertisement of the applications and appointing the defender to

lodge answers within a period of 21 days. Answers having been lodged, and there being

opposition at least to the application for authority to bring group proceedings, I appointed a

hearing in both applications, and heard argument on 22 December 2021. Having done so, I

invited further representations to be submitted on behalf of the applicant on the matter of

whether, as agent instructed on behalf of many of the prospective pursuers, it was

appropriate that they should be putting themselves forward for appointment as a

representative party. I should observe that the defender did not advance any opposition to

the authorisation of the applicant as a representative party.

Legal framework

[3]

Both applications are made under chapter 26A of the Rules of Court. The rules

contained in chapter 26A were made following the enactment of the Civil Litigation

(Expenses and Group Proceedings) (Scotland) Act 2018 ("the 2018 Act"). So far as relevant

to these applications, section 20 of the 2018 Act provides as follows:

"20 Group proceedings

(1) There is to be a form of procedure in the Court of Session known as `group

procedure', and proceedings subject to that procedure are to be known as `group

proceedings'.

(2) A person (a `representative party') may bring group proceedings on behalf of two

or more persons (a `group') each of whom has a separate claim which may be the

subject of civil proceedings.

(3) A person may be a representative party in group proceedings--

(a) whether or not the person is a member of the group on whose behalf the

proceedings are brought,

(b) only if so authorised by the Court.

(4) There is to be no more than one representative party in group proceedings.

(5) Group proceedings may be brought only with the permission of the Court.

(6) The Court may give permission--

(a) only if it considers that all of the claims made in the proceedings raise issues

(whether of fact or law) which are the same as, or similar or related to, each

other,

(b) only if it is satisfied that the representative party has made all reasonable

efforts to identify and notify all potential members of the group about the

proceedings, and

section 21(1)..."

[4]

Part 2 of chapter 26A is concerned with applications to be a representative party to

bring group proceedings.

[5]

Rule 26A.7 is in the following terms:

"26A.7. - (1) An applicant may be authorised under section 20(3)(b) of [the 2018 Act]

to be a representative party in group proceedings only where the applicant has

satisfied the Lord Ordinary that the applicant is a suitable person who can act in that

capacity should authorisation be given.

(2) The matters which are to be considered by the Lord Ordinary when deciding

whether or not an applicant is a suitable person under paragraph (1) include

(a) the special abilities and relevant expertise of the applicant;

(b) the applicant's own interest in the proceedings;

otherwise, should the application be authorised;

(d) confirmation that the applicant is independent from the defender;

(e) demonstration that the applicant would act fairly and adequately in the

interests of the group members as a whole, and that the applicant's own

interests do not conflict with those of the group whom the applicant seeks

to represent; and

(f) the demonstration of sufficient competence by the applicant to litigate

the claims properly, including financial resources to meet any expenses

awards..."

[6]

Part 3 of chapter 26A is concerned with applications for permission to bring group

proceedings. Rule 26A.11 envisages that, where answers are lodged to an application, a

hearing will be fixed to determine the question of permission. In that respect, rule 26A.11(5)

provides as follows:

"(5) The circumstances in which permission to bring proceedings to which this

Chapter applies may be refused by the Lord Ordinary are as follows

(a) the criteria set out in section 20(6)(a) or (b) (or both (a) and (b)) of [the

2018 Act] have not been met;

(b) it has not been demonstrated that there is a prima facie case;

justice for the claims to be brought as group proceedings rather than by

separate individual proceedings;

(d) it has not been demonstrated that the proposed proceedings have any real

prospects of success."

The hearing on 22 December 2021

[7]

Senior counsel addressed both the suitability of the applicant to be a representative

party and the question whether permission should be granted for group proceedings to be

brought.

[8]

On the first matter, it was submitted that the court could be satisfied, by reference to

the list of considerations in rule 26A.7, that permission should be granted. The applicant

was a long-established firm which handled almost exclusively pursuers' personal injury

litigation. It had already acquired experience in group litigation. To the extent that there

might be any concern around its own interest in the prospective group proceedings as agent

for the pursuers the applicant was bound by professional rules relating to conflicts of

interest and client management, and had its own professional responsibilities to the court.

There ought not to be any concern about the applicant's ability to meet any expenses

awards. In circumstances in which qualified one-way costs shifting would now apply there

was little likelihood of any such finding of expenses. In any event, as a firm, the applicant

had a solid financial base and one which allowed it to absorb unsuccessful cases and any

associated awards of expenses against pursuers. The applicant's standing and financial

resources, and the absence of any conflict of interest with the pursuers to any group

proceedings, were addressed in a statement by Mr McGuire, which had been lodged for

the assistance of the court.

[9]

Turning to the second application the senior counsel submitted that the court should

avoid engaging in a disproportionate exercise of micro-examination of the pursuers' claims.

The issues for determination in the prospective claims all concerned (i) the existence and

content of the defender's duty of care (it being noted, without pleading any Kenyan law,

that there was an admission that certain duties were incumbent on the defender), and

(ii) whether the employees were exposed to common working practices which created a

foreseeable risk of injury. The issues were "the same, similar or related" for the purposes

of section 20(6)(a) of the 2018 Act. The applicants had placed material before the court from

which it was clear that substantial efforts had been made to identify and notify all potential

group members. The test for a prima facie case in rule 26A.11(5)(b) was in effect the same as

the test for interim interdict (Toynar v Whitbread & Company plc 1988 SLT 433). It was a low

threshold, especially in the context of the defenders' admission that certain duties were

incumbent on them. Nor could it be said that there were no reasonable prospects of success.

To the extent that forum non conveniens was advanced as a ground for refusing permission

that should not interfere with progress at this stage. If permission was granted the matter

could still be raised as potentially a common issue. Finally, there were a host of practical

reasons why it would be better for the administration of justice if the numerous claims were

raised as a group rather than individually.

[10]

In response, the defender did not submit that the applicant was unsuitable to

be authorised as a party representative. Counsel instead submitted that there were

circumstances in which permission to bring group proceedings should be refused. The first

consideration was one of limitation, which fell to be determined according to the law of

Kenya. Limitation potentially accounted for the overwhelming majority of the claims

identified in the Group Register lodged with the summons. A case raised out of time did

not have real prospects of success. Prima facie case, efficient administration of justice and

real prospects of success were linked considerations. If there was no prima facie case then

there were no real prospects of success, and the administration of justice would be affected

by parties' attempts to deal with the difficulty. Quite apart from limitation it could not be

said that all of the claimants were engaged in similar work. Counsel illustrated this by

distinguishing between employees who may have been engaged in shear plucking and hand

plucking. In any event the summons provided little more than a generic description for its

underlying factual basis. He queried whether it was in the nature of a repetitive strain case

or whether it encompassed claims arising from single events. In the absence of proper focus

the court was not in a position to assess whether there were real prospects of success.

Finally, counsel acknowledged that the issue of forum non conveniens was not one which

assisted in addressing the issue of permission at this stage.

[11]

In the course of his submissions on behalf of the applicant, the court raised

with senior counsel the question whether it was appropriate for the solicitors who were

instructed in the case to put themselves forward as the proposed representative party. The

issue having potential relevance to a consideration of the question whether the test in

rule 26A.7(2) was met, even although the application was not opposed, I invited senior

counsel to submit further submissions in writing under reference to any relevant authorities

(including within Commonwealth jurisdictions), and continued the hearing for that

purpose.

[12]

I was subsequently furnished with further submissions, helpfully accompanied by

(i) a copy of the decision of the Ontario Supreme Court in Kerr v Danier Leather Inc [2001]

OJ No 950; (ii) a letter from a Canadian attorney, Mr Michael J Peerless, of McKenzie Lake

Lawyers LLP, Ontario, containing a commentary on the authority just mentioned, and an

insightful summary of the position regarding class actions in the other provinces of Canada,

and (iii) relevant extracts from the Taylor Review on Expenses and Funding of Civil

Litigation in Scotland, and the Scottish Civil Courts Review (2009). To the suggestion that

Kerr v Danier Leather Inc provided authority for the proposition that claimants' solicitors

were not permitted to be a representative in a class action, senior counsel relied on the

advice received which was to the effect that the decision would not be considered

determinative even in Canada, there being different approaches discernible in other cases

and in different provinces of Canada. Moreover, there was no discussion in the Taylor

report which assisted in resolving the issue. Nothing in the Scottish Civil Courts Review

precluded the applicant from acting as a representative party where the conditions for it

doing so otherwise existed.

[13]

Accordingly, I was invited to grant both applications. If the court was not satisfied

on the matter of the representative party application I was invited to continue the hearing

further to allow for consideration of an alternative or substitute application.

Analysis and decision

[14]

I will address myself first to the representative party application. It logically

precedes the granting of the group proceedings application, not least because the summons

in the latter application reflects the applicant's designation as representative party for the

pursuers in the instance. The application for authorisation as a representative party was not

opposed by the defender.

[15]

Neither the 2018 Act nor the Rules of Court define who may, or may not, be

authorised to be a representative party in group proceedings. Rule 26A.7(3) provides that

the court may refuse an application made by an applicant seeking authorisation to be given

where the applicant has not satisfied it that the applicant is a suitable person to act in that

capacity. It is, therefore, clear that it is for the court to be satisfied as to the matters set out

in rule 26A.7(2).

[16]

The Scottish Civil Courts Review considered that there should be a procedure for

certifying an action as suitable for multi-party proceedings. It recommended that the

procedure should involve the court in certifying that an action was suitable for group

proceedings. Pursuers should be required to demonstrate a prima facie cause of action. The

Review group also recommended that the procedure should be designed to be usable by

"representative bodies" who have standing (volume 1, chapter 2, paragraph 70).

[17]

It is clear, from its later consideration of "multi-party actions" that the Review group

anticipated that the category of persons authorised to act as representative party in such

proceedings might be broader than a "pursuer" in the traditional sense. Endorsing

(volume 2, chapter 13, paragraph 69) the Scottish Law Commission's recommendation that

the court should be satisfied that the representative pursuer was an appropriate person, the

Review group said this:

"In some jurisdictions the pursuer need not be a natural person but can be an

`ideological' pursuer, generally a representative body. For example...the Australian

Competition and Consumer Association has power to bring representative actions

in certain circumstances. We do not think that it would be appropriate for the

legislation that will be necessary to implement our recommendations to seek to

specify the type of bodies that might be permitted to bring proceedings on a

representative basis. That issue is under consideration at present, and there may

be further developments at European level. However, should representative

bodies, either generally or those specifically authorised, be given standing to bring

proceedings on behalf of consumers or other groups whom they represent, we think

that the multi-party procedure should be designed in such a way as to permit those

bodies with standing to make use of it."

[18]

From the information provided in Mr Peerless's helpful review of the class

proceedings regimes across the provinces of Canada it is clear that the rules as to who

can be a representative plaintiff vary, and that the common law requirements of a

representative plaintiff, laid down in the decision of the Supreme Court of Canada in the

case of Dutton, 2001 SCC 46, do not expressly require that a representative plaintiff be a

member of the class proceedings. That said, all of the provinces, save three, appear to

require the representative plaintiff to be a member of the class of plaintiffs, subject only to

the proviso (excluding Ontario and the Federal Court of Canada) that the court may appoint

a person who is not a member of the class as the representative party for the class action

where it is necessary to do so in order to avoid substantial injustice to the class.

[19]

That review is instructive in as much as it lends emphasis to the importance which

most provinces appear to attach to the representative plaintiff being a class member.

[20]

However, consistent with the passage from the Scottish Civil Courts Review I have

just quoted, the 2018 Act and chapter 26A of the Rules of Court have not been constructed so

as to restrict representative party applications in group proceedings to persons who have

claims in those proceedings. Indeed, section 20(3)(a) of the 2018 Act makes it clear that a

person may apply for authorisation to be a representative party whether or not that person

is a member of the group on whose behalf the proceedings are to be brought.

[21]

But, the question raised by the present application is a different one. It is whether

the firm acting for the claimants in group proceedings can, at the same time, be the

representative party.

[22]

In that respect, the applicants contend that they should be authorised as a

representative party because they fall within the description of an "ideological" pursuer,

and that they fulfil the criteria for authorisation in rule 26A.7(2). There is no Scottish

authority to assist in this matter. In the Ontario Supreme Court decision of Kerr v Danier

Leather Inc the defendants argued that Mr and Ms Kerr, who were spouses, would be

inappropriate representative plaintiffs because Ms Kerr was a partner at the proposed class

counsel's law firm. Cumming J concluded that "the better practice is that class counsel be

unrelated to a representative plaintiff so that there is not even the possible appearance of

impropriety". He approved a third proposed representative with no close familial bond to

proposed class counsel as the sole representative plaintiff.

[23]

Mr Peerless's note identified other cases in which Kerr has been considered. Perhaps

the most pertinent authority to which he drew attention was Roach v Canada (Attorney

General) [2009] OJ No 737. Mr Roach was proposed as class counsel. Kerr was cited as

authority that, as a general rule, it is not appropriate to appoint as a representative plaintiff a

member, or associate, of a law firm that would act as class counsel. Despite this general rule

Cullity J of the Ontario Superior Court of Justice stated that if the certification requirements

for class proceedings were otherwise satisfied (which they were not), he would not have

seen any objection to the appointment of Mr Roach as representative plaintiff. He found

that

"Mr Roach [had] been the moving force behind the proceeding in his personal

capacity, and [that] his involvement in the case and the earlier proceeding - together

with his legal knowledge and experience and his strong commitment to enforcing

the rights of the class members...[made] him eminently qualified to perform the

responsibilities of a representative plaintiff".

[24]

I am not persuaded that the circumstances in Roach, the full report of which I have

now studied, bear comparison with the present application, in which it is not suggested that

any such personal connection to the proceedings exists. Other authorities specifically

mentioned in Mr Peerless's note have tended to concentrate on the issue of whether a close

connection between the proposed representative plaintiff and class counsel rendered the

proposed representative plaintiff unsuitable. Kerr has been considered, or referred to, in

eleven Canadian authorities. As a statement of the general principle (that it is not

appropriate to appoint, as a class representative, a member of a law firm that would act, for

the class, in class proceedings) it has not, as far as I can see, been disapproved. None of the

authorities, to which Mr Peerless's note refer, replicate the circumstances of the instant

application. In short, I have been referred to no authority, in any jurisdiction, where

permission has been granted for the same firm to be both the representative party and

instructed agent (or lead agent) for the claimants in class or group proceedings.

[25]

The Scottish scheme for group proceedings provides for the court to consider the

suitability of the proposed representative party by reference to a non-exhaustive list of

matters which are narrated in rule 26A.7(2). Those matters include consideration of the

applicant's own interest in the proceedings, and the absence of any conflict between the

applicant's interests and those of the group whom it seeks to represent (rule 26A.7(2)(b)

and (e)). The inclusion of those matters in rule 26A.7(2) reflect a theme which is, in my view,

discernible in some of the Canadian cases referred to by Mr Peerless. In particular, I refer to

the concern of the court about the potential for conflict of interest, and the appearance of

impropriety, arising from the possibility that decisions made by a representative party in

group proceedings would be influenced by their financial interest as a member of the firm

acting in those proceedings. Implicit in that concern would seem to be a recognition that, all

things being equal, the positions of representative plaintiff in class proceedings and "class

counsel" are, and should be, separate and distinct.

[26]

I wish to make it clear that I impute absolutely no impropriety on the part of the

applicant in putting itself forward as a representative party. Far from it. But the broader

concern I have mentioned is legitimate, and no less relevant, to group proceedings in this

jurisdiction, which are themselves in their procedural infancy. The concern arises, in the

circumstances of this application, from the apparent blurring of the distinction between a

party and its advisors, and the improbable consequence that the applicant would be issuing

instructions, as representative party, to itself on matters relating to the progress of the group

proceedings. I take leave to doubt whether that was what the Scottish Civil Courts Review

had in mind in its consideration of a role for "representative bodies" in group proceedings.

[27]

More immediately, the fact that the funding arrangements for the proposed group

proceedings are also speculative, and subject to success fees of a kind referred to in

Mr McGuire's statement, serves only to emphasise the potential for conflict - or the

appearance of it - to arise in circumstances where a global settlement might be proposed to

the representative party (or a competitive tender lodged in process). It does not seem to me

that, in the constitutional arrangements proposed for these proceedings, that difficulty

would be elided by the obligation on the part of the representative party, in terms of

rule 26A.30, to consult with group members on the terms of any proposed settlement before

any damages in connection with the proceedings may be distributed.

[28]

In these circumstances, for the purposes of rule 26A.7(3), I am not persuaded that

the applicant is a suitable person to act in the capacity of representative party in the

contemplated group proceedings.

[29]

I can deal with the group proceedings application more briefly because, in principle,

and subject to satisfactory resolution of the representative party application, I am satisfied

that the criteria for granting that application are met. In particular, while the pleadings are

in abbreviated form, the averments adequately identify issues arising from common

working practices, allegedly giving rise to musculoskeletal injuries, and the content of the

defender's duty of care in that context, which not only give rise at least to a prima facie case

but which are also sufficiently similar to justify the granting of permission. No issue was

taken over the identification of potential group members.

[30]

I am also satisfied that the practical issues touched on in senior counsel for the

applicant's submissions justify the view that it would be "a more efficient administration of

justice" for the claims to be brought as group proceedings rather than by separate individual

proceedings. For example, both forum non conveniens and the matter of limitation were

raised in the course of discussion. Either of those issues might be thought to be common to

all claims and have the potential significantly to impact on the duration of the proceedings

and/or the number of claims within them.

Disposal

[31]

I am, however, conscious that the group proceedings application is bound up with

the identity of the representative party, not least because the summons would require

amendment to reflect a final decision on that matter. Accordingly, and subject to any

submissions parties wish to make on immediate further procedure, I am prepared to

continue both applications to a further hearing to enable the applicant to consider

proposing, by amendment, an alternative representative party (as I was requested to do in

the applicant's supplementary note of proposals for further procedure).