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JOSEPH MACKAY AGAINST NISSAN MOTOR CO LTD AND OTHERS [2024] ScotCS CSOH_68 (05 July 2024)
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[2024] CSOH 68
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OUTER HOUSE, COURT OF SESSION
[2024] CSOH 68
GP3-23 & GP4-23
OPINION OF LORD SANDISON
In the applications to be a representative party in group proceedings and for
permission to bring such proceedings
by
JOSEPH MACKAY
Applicant
against
(FIRST) NISSAN MOTOR CO LTD; (SECOND) NISSAN MOTOR MANUFACTURING
(UK) LIMITED; (THIRD) NISSAN MOTOR IBERICA SA; (FOURTH) NISSAN
INTERNATIONAL SA; (FIFTH) NISSAN MOTOR (GB) LIMITED; (SIXTH) RENAULT SA;
(SEVENTH) RENAULT FLINS; (EIGHTH); RENAULT SAS; (NINTH) RENAULT UK
LIMITED; and (TENTH) RCI FINANCIAL SERVICES LIMITED
Defenders
Applicant: Milligan KC; Lefevres
First to Fifth Defenders: Lord Keen of Elie KC, Watts KC; Pinsent Masons LLP
Sixth to Tenth Defenders: Crawford KC, Welsh; Harper Macleod LLP
5 July 2024
Introduction
[1]
Joseph Mackay has applied for permission to bring group proceedings in this court
concerning the alleged fitting to Nissan and Renault diesel vehicles by their manufacturers
of prohibited defeat devices for the control of nitrogen oxide emissions during regulatory
2
testing. He also applies to be authorised as the representative party on behalf of
approximately 8,500 persons claiming to have suffered loss as a result of that alleged
behaviour. The first to fifth proposed defenders in those proceedings are various companies
in the Nissan group and the sixth to tenth proposed defenders are several companies in the
Renault group. Both applications are opposed by each group of companies, and came before
me for a hearing.
Relevant statutory provisions and Rules of Court
[2]
Part 4 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018
inter alia provides:
"
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,
3
(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
(c)
in accordance with provision made in an act of sederunt under
section 21(1).
...
21
Group procedure: rules
(1)
The Court of Session may make provision by act of sederunt about
group procedure.
(2)
Without limiting that generality, the power in subsection (1) includes
power to make provision for or about--
(a)
persons who may be authorised to be a representative party,
(b)
action to be taken by a representative party in connection with
group proceedings (whether before or after the proceedings are
brought),
(c)
the means by which a person may--
(i)
give consent for the person's claim to be brought in
group proceedings,
(ii)
give notice that the person does not consent to the
person's claim being brought in group proceedings,
...
(e)
circumstances in which permission to bring group proceedings
may be refused,
...
(h)
the making of an additional claim in group proceedings after
the proceedings have been brought (including the transfer of a claim
made in other civil proceedings),
(i)
the exclusion of a claim made in group proceedings from the
proceedings (including the transfer of the claim to other civil
proceedings),
(j)
the replacement of a representative party,
4
...
(3)
Nothing in an act of sederunt under subsection (1) is to derogate from
section 20."
[3]
Chapter 26A of the Rules of the Court of Session (RCS) provides, inter alia:
"Determination of an application by a person to be a representative party
26A.7.--(1) An applicant may be authorised under section 20(3)(b) of the 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 such 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;
(c)
whether there would be any potential benefit to the applicant,
financial or 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 (the details of funding arrangements do not require
to be disclosed).
(3)
The Lord Ordinary may refuse an application made by an applicant
seeking authorisation to be given under section 20(3)(b) of the Act where the
applicant has not satisfied the Lord Ordinary that the applicant is a suitable
person, in terms of paragraphs (1) and (2), to act in that capacity.
(4)
Authorisation given under paragraph (1) endures until the group
proceedings finish or until permission is withdrawn.
5
The permission stage
26A.11.
...
(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 Act have not been met;
(b)
it has not been demonstrated that there is a prima facie case;
(c)
it has not been demonstrated that it is a more efficient
administration of 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."
Submissions for the applicant
[4]
Senior counsel for the applicant drew my attention to Bridgehouse v Bayerische
Motoren Werke AG
the access to
justice considerations which were of utmost importance to, and underlay, group
proceedings in Scotland, and to note that the procedure in such proceedings was under the
control of the presiding judge so as to enable effective management of the process. Group
proceedings had been introduced into Scottish procedure for the specific purpose of
enabling claims like those in these applications to be heard conveniently. The court should
be wary of specious complaints by prospective defenders about the suitability of a proposed
action for the procedure: cf Bridgehouse at [16].
[5]
In relation to the application for permission to bring group proceedings in terms of
section 20(5) of the Civil Litigation (Expenses and Group Proceedings)(Scotland) Act 2018,
6
the representative party submitted that the terms of RCS 26A.11 had been satisfied and
therefore orders were sought in terms of RCS 26A.12(1) along the following lines:
a.
That the group proceedings be known as the Nissan/Renault Group NOx
Emissions Group Proceedings;
b.
That Joseph Mackay be the representative party;
c.
That the group and the issues be defined as: "Claims arising from the NOx
emissions issue affecting certain Nissan and Renault diesel engines.";
d.
That the representative party should serve a finalised summons upon the
defenders within 28 days;
e.
That the defenders should have the opportunity to lodge defences to the
summons within a reasonably short period thereafter;
f.
That the group register be lodged within 28 days; that Lefevres, Solicitors, be
responsible for curating the group register and notifying the defenders' solicitors on
the last day of each calendar month of any alterations to it, showing additions in
green text and deletions in red text; with no additional requirement to follow the
procedure described in RCS 26A.15, and such notification being deemed to be
commencement of proceedings for the purposes of RCS 26A.18 as at the date of
intimation to the Defenders' solicitors;
g.
That the procedure just described should be sufficient to permit any
individual to become a group member or to withdraw consent to be a group
member, with no further requirement to serve notices in terms of RCS 26.A.14;
h.
That the period of time during which claims may be brought by persons in
the group proceedings should end at the allowance of proof, subject always to the
right of the court to allow a later claim under RCS 26A.16;
7
i.
That a group member might alternatively withdraw his consent to being
bound by the group proceedings by sending a notice in Form 26A.14-B, in terms of
RCS 26A.14(2);
j.
That, in terms of Rule 26A.12(h)(i), the representative party should advertise
the granting of permission by the insertion of an advertisement in the form attached
to the interlocutor in The Herald and the Daily Record newspapers within 7 days,
and in the next edition of the Journal of the Law Society of Scotland;
k.
That no order be made in terms of Rule 26A.12(h)(ii);
l.
That parties be allowed a preliminary hearing and should lodge in process in
advance of that diet a joint statement of issues and notes of proposals for further
procedure together with all correspondence and other documents which set out their
material contentions of fact and law, in terms of paragraph 30 of Practice Note 2
of 2020;
m.
That the expenses of the application and answers should be expenses in the
Nissan Renault NOx Emissions Group Proceedings.
[6]
The court, at this stage, was not adjudicating on the issues in dispute; rather, it was
considering, in the context of procedure that was intended to be flexible and open, whether
the representative party had satisfied the court that there were common issues; that there
was a prima facie case, and that group proceedings were the best way of determining the
issues between the parties. No detailed consideration of the legal or factual issues which
might arise was called for, nor was any particular degree of specification necessary at this
stage.
8
[7]
The statute and Rules of Court envisaged that the court might refuse permission in
four situations: RCS 6A.11(5) and section 20(6) of the 2018 Act. These collectively required
the application of a commonality test, a merits assessment, and a superiority test.
[8]
The first situation in which the court might refuse to permit group proceedings to be
brought was where either of two key requirements of section 20(6)(a) and (b) of the 2018 had
not been met, namely, 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" (the commonality
test) and that, "the representative party has made all reasonable efforts to identify and notify
all potential members of the group about the proceedings". As regards commonality, the
group members all presented claims arising from the same, similar or related issues of fact
and law, namely, the issue of excessive NOx emissions from their purchased, owned or
leased Nissan or Renault vehicles containing Euro 5 or Euro 6 diesel engines, which they
alleged contained unlawful defeat devices causing them to sustain loss and damage.
[9]
The defenders advanced an argument that it was inappropriate to include both
Renault and Nissan in the same group proceedings. That argument had not been accepted
by the courts of England and Wales, where both Renault and Nissan were convened in a
single group proceeding. Considerations of efficiency favoured that expedient. The
representative party understood that Nissan and Renault (together with Mitsubishi) were
part of a strategic alliance. In 2002 Renault and Nissan had formed Renault-Nissan BV, a
jointly-owned entity in which they owned equal shares, to determine the strategy of the
alliance and to coordinate its activities. An Alliance Operating Board had been created on
12 March 2019 to oversee the alliance. The Nissan and Renault defenders remained separate
corporate entities and they were separately responsible for obtaining type approval for
vehicles they manufactured. In February 2023, the board of Renault Group and Nissan
9
Motor Co Ltd had formally announced that the alliance would pursue various new
initiatives on the basis of enhanced cooperation between member companies. It had also
been announced that Renault Group would transfer 28.4% of its Nissan shares into a French
trust. As a result of the transfer, Nissan would be able to exercise freely its 15% voting rights
in Renault, whereas Renault's freely exercisable voting rights in Nissan had been reduced
to 15%. The operation of the strategic alliance had brought about a situation whereby many
Nissan models that would form the subject matter of these proceedings would feature
engines that were manufactured by Renault and vice versa. The representative party further
understood that many Nissan models were installed with engines that were jointly
developed and manufactured by Renault and Nissan. There would be a significant number
of group members involved in the proceedings who acquired a Renault vehicle from an
authorised dealership operated by Nissan and vice-versa. In the context of the extent to
which group proceedings were intended to be user-friendly, the defenders had failed to
identify any reason as to why it would not be appropriate for both Nissan and Renault to
feature in the same proceedings.
[10]
On the issue of advertisement, the representative party confirmed that all reasonable
steps had been taken to notify all potential group members of the proposed proceedings.
The group members were represented by a steering group of agents who had carried out
significant amounts of advertising on television and online. It was submitted that the
requirements of section 20(6)(a) and (b) of the 2018 Act were satisfied.
[11]
As regards the merits of the proposed proceedings, the rules stated that the court
might refuse permission where either it had not been demonstrated by the applicant that
there was a prima facie case, or that the proposed proceedings had any real prospects of
success: RCS 26A.11(5)(b) and (d). It was submitted, however, that the court should not
10
delve deeply into the substantive merits of the proceedings at this stage. All that was
required to satisfy the requirement of a prima facie case was that the representative party had
demonstrated that there was a case to state and a case to answer. As regards "real prospects
of success", it was submitted that that had broadly the same meaning as in the context of the
test for permission to bring a judicial review, namely that the prospects were real ie, genuine
rather than fanciful or speculative. The test was not one of probabilis causa: Wightman v
the rules was to filter out obviously unmeritorious claims. Having regard to the details
provided in the application, the draft summons and the material lodged in support thereof,
the representative party had satisfied the requirement of having a prima facie case with a real
prospect of success.
[12]
The defenders invited the court to conduct a detailed examination of the underlying
merits of the claims. For example, issue was taken by them regarding an apparent lack of
specification regarding complex matters such as the nature and extent of defeat devices, the
interplay between defeat devices and Euro 5 and Euro 6 emissions standards, and controlled
testing conditions, amongst other matters. They also complained about a lack of
specification regarding individual claims. It was entirely premature and quite misconceived
in terms of the rules for the defenders to expect, as they appeared to suggest, that these
matters should or could be canvassed in full now. The full nature of the dispute, and
questions of the type raised by the defenders, could only be assessed once a finalised
summons was served, defences were lodged, and evidence had been exchanged, all of which
could only take place once permission to bring group proceedings had been granted.
Should the court find otherwise, it would be difficult to conceive how group proceedings
could ever get off the ground, faced with a requirement upon prospective group members to
11
frontload the preparation of their cases without knowing whether permission to bring
proceedings would ultimately be granted. The defenders would be entitled to take issue
with matters of specification at the appropriate juncture, but that juncture could not on any
view be now. Since their position was that no prohibited defeat devices had been fitted to
their vehicles, they could easily state that as an ostensibly clear answer to the claims being
made. The only place in which the degree of specification demanded about individual
claims could be provided, at this early stage, would be within the group register. To include
that sort of detail there would, however, be entirely contrary to the decision in Bridgehouse
at [78], where it was held (under reference to Form 26A.15) that the group register ought
simply to contain a list of the group members who consented to being members of the
group. Again, any particular difficulty which might emerge in relation to details of
individual claims could be returned to at a later stage.
[13]
The defenders also sought to suggest that the representative party had failed to
demonstrate a prima facie case on account of the fact that there appeared to be some
duplication of claims between these proposed proceedings and those in extant proceedings
in England and Wales. Steps were being taken to identify all duplicate claims within the
group register and any duplicated entries would be removed.
[14]
The court might also refuse permission where it had not been demonstrated that it
would be more efficient for the administration of justice for the claims to be brought as
group proceedings than by way of separate individual proceedings, in terms of
RCS 26A.11(5)(c). This was essentially a superiority test as to whether group procedure was
more suitable for the proposed claims. It was self-evident that group procedure was more
suitable here, given the number of prospective group members and the common issues
already identified. Permission for such proceedings should be granted.
12
[15]
Although the case law regarding group proceedings in Scotland was in its relative
infancy, it was clear that the bar in order to be appointed as a representative party was and
should be low. It would be an impediment in the access to justice if it were otherwise, and
the procedure would become unworkable. The sole issue taken by the defenders regarding
the appointment of the applicant as the representative party related to a purported lack of
specification on the issue of funding and indemnity.
[16]
In determining whether or not the applicant was a suitable person to be appointed as
the representative party, RCS 26A.7(2)(f) required the court to consider whether he could
demonstrate sufficient competence to litigate the claims properly, including in relation to the
financial resources available to him to meet any expenses awards. The rule expressly
acknowledged that the applicant need not disclose the detail of any funding arrangement. It
was to be noted that the considerations mentioned in the Rule were not exhaustive and did
not set out minimum requirements for permission to be granted, merely matters to be taken
into consideration. There was some tension between the requirement that the court consider
the applicant's ability to meet adverse expenses awards on the one hand, and not requiring
him to disclose the detail of his funding arrangements on the other. However, it was
submitted that all that was required was for the nature of his financial resources to meet any
award of expenses to be explained ie, whether he was self-funding or receiving third party
assistance. Where, as here, the applicant relied on funding from a third party, the detail of
the funding arrangement did not require to be disclosed. Quantum Claims Compensation
Specialists Limited had undertaken to provide funding to the representative party and
group members for the conduct of the litigation. That was the source of funds to which the
applicant would look if the need arose. Quantum Claims would be responsible for bearing
any adverse award of expenses incurred by the representative party on behalf of the group
13
members. It was a litigation funder which had been operating in Scotland for around
35 years. It had been responsible for funding many litigations, both on behalf of individuals
and multi-party actions. It had vast experience of funding multi-party claims in Scotland,
including vaginal mesh and Volkswagen litigations, and the Kenyan tea pickers case. It had
never failed to meet any award of expenses in its history. Its latest statutory accounts
showed assets of over £8 million. The provision of funding by Quantum Claims was apt to
demonstrate that the applicant had sufficient financial resources to meet any adverse
expenses awards. That had been accepted in the Bridgehouse litigation. It would be a
surprising result if, having satisfied the court that there was a stateable case, a representative
party could be prevented from appointment because of a requirement to demonstrate
sufficient funding. That was most apparent if one contrasted the position with the court's
approach to the issue of requiring a pursuer to find caution, the general principle being that
even an impecunious litigant was entitled to advance a stateable case other than in
exceptional circumstances: McTear's Executrix v Imperial Tobacco Ltd 1996 SC 514, 1997
SLT 530. In any case, to require further information about the detail of the funding
arrangements would expressly go against Rule 26A.7(2)(f). It would involve disclosing the
detail of funding arrangements which were commercially sensitive and confidential. The
information provided was sufficient to demonstrate the applicant's competence to litigate
the claims properly. The funding issue was heavily outweighed by the factors favouring the
appointment of the applicant as the representative party: Bridgehouse at [44]. The court had
to choose whether to appoint him or not; there was no third option.
[17]
The applicant had demonstrated that he fulfilled the limited criteria to be appointed
as the representative party. He had provided sufficient information to satisfy the limited
14
requirements of RCS 26A.7(2)(f) in relation to funding. The court should appoint him to be
the representative party.
Submissions for the first to fifth defenders
[18]
Senior counsel for the first to fifth defenders submitted that the application for
permission to raise group proceedings should be refused, or at least refused in hoc statu.
Firstly, the requirement to establish that all the claims made in the proceedings raised the
same, similar or related factual issues was not met. The proposed group was said to
comprise pursuers who had "purchased, owned or leased" a Nissan or Renault vehicle
containing a Euro 5 or Euro 6 diesel engine. A pursuer who had leased a Nissan vehicle was
self-evidently in an entirely different position to a pursuer who had purchased a Renault
vehicle. No explanation was offered as to why the two manufacturers against whom group
proceedings were sought to be commenced should be combined in a single action. A
number of problems arose with that approach. There was a long-standing alliance
arrangement between Nissan and Renault, but the two businesses were and always had
been separate entities with their own separate research and development functions and
arm's length supply arrangements. Even where an engine type or family was common to
both Nissan and Renault vehicles, there was scope for multiple variables relating to, inter
alia, emissions control systems, software, and approaches to calibration and configuration,
all of which varied considerably between the two manufacturers. The proposed group
proceedings would inevitably involve disclosure of highly commercially sensitive
documents from numerous jurisdictions. They would require specialist translation of
technical documentation and complex witness evidence. They would involve the potential
disclosure of confidential documentation between two defenders who were direct
15
competitors. The position was further complicated by the inclusion of the tenth defender,
who was in turn in an entirely different position to either manufacturer. The decision for the
court in this regard was not between the group as it was presently proposed to constitute it
and 8,000 individual actions; rather, it was between the present group and other potential
groups sharing greater community of interest.
[19]
Secondly, there was no prima facie case in terms of RCS 26A.11(5)(b). The application
was so fundamentally lacking in specification as to fail to demonstrate a prima facie case. It
did not even attempt to make any relevant averments of loss. Further, many of the claims
appeared to have prescribed.
[20]
Thirdly, it was not a more efficient administration of justice for the claims to be
brought as group proceedings in terms of RCS 26A.11(5)(c). The nature and extent of the
loss allegedly suffered by, for example, the lessee of a Nissan vehicle as opposed to the
owner of a Renault vehicle would be materially different and would require the leading of
different evidence from different witnesses. Establishing such a loss would require the
leading of complex technical evidence which would be of little or no assistance in relation to
large numbers of pursuers in the group who owned or leased completely different vehicles.
The quantification of their loss would not, as stated in the application, follow a "common
methodology". The basis for that suggestion, or the nature of the supposedly common
methodology, was totally unclear. It was, indeed, difficult to see how lessors of vehicles had
suffered any loss at all. The proposed group proceedings would require to analyse
numerous engine configurations in various Nissan and Renault engines, across multiple
models made by two different manufacturers. Different configurations in hardware and
software further complicated the position. The cases could not efficiently be dealt with
together.
16
[21]
Fourthly, it had not been demonstrated that the proposed proceedings had any real
prospects of success in terms of RCS 26A.11(5)(d), for the same reasons put forward in
relation to the absence of a prima facie case.
[22]
Fifthly, the purported group register was not fit for purpose. It contained members
who already had claims ongoing in England and Wales. Approximately 1,360 vehicle
identification numbers ("VIN") for Nissan vehicles included on the Scottish group register
were duplicated, either internally to that register or when compared with the English and
Welsh group register. There were claims which involved vehicles not fitted with either a
Euro 5 or a Euro 6 engine. In at least one case the vehicle in question was not a Nissan or
Renault vehicle at all. In any event, the group register did not provide adequate
specification to allow the first to fifth defenders to understand and investigate the nature or
basis of the claims which were sought to be brought separately against each of them.
[23]
Sixthly, the application contained allegations of fraudulent misrepresentation. No
attempt had been made to specify the detail of these allegations or the basis upon which it
was felt they could responsibly be made. Allegations of fraudulent representation required
a high level of specificity. It was necessary to set out, in detail, the specific acts or
representations complained of, the occasions on which they were made, and how the
representations were causative of the relevant party entering into the transaction in question:
Royal Bank of Scotland v Holmes 1999 SLT 563 at 569-570. The application fell far short of
these requirements. Both applications should be refused.
[24]
In relation to Mr Mackay's application to be a representative party, it was submitted
that it was not clear upon what basis it was said that he could act fairly and in the best
interests of other members of the group whose claims shared no common features with his
own. There was scope for a situation in which his interests might differ from those of other
17
members of the group. It was said that he had the benefit of an arrangement with Quantum
Claims, but no further detail was provided to explain the basis upon which he might be able
to indemnify all of the defenders in the proposed group proceedings in respect of awards of
expenses which, on any view, could be extremely large. Cost estimates for procedure in
England and Wales ran to tens of millions of pounds. In particular, no suggestion had been
made that he had the benefit of "After The Event" insurance, or any other form of litigation
funding which might give greater comfort than that disclosed. Quantum Claims were
already funding actions against other vehicle manufacturers in addition to numerous other
cases, including other group litigations. The extent of its potential liabilities for all of these
claims was likely to exceed its assets. Both applications should be refused.
Submissions for the sixth to tenth defenders
[25]
Senior counsel for the sixth to tenth defenders submitted that the applications should
be refused. In relation to the application for permission to bring the proposed group
proceedings, the court should not be satisfied that the representative party had made all
reasonable efforts to identify and notify all potential members of the group about these
proposed proceedings, as was required by section 20(6)(b) of the 2018 Act. In that regard,
the applicant had not provided anything to the court beyond assertion. These were not
trivial matters and deserved to be approached formally so to avoid conflicting and parallel
applications and litigation in the court.
[26]
The applicant was unable to satisfy the court that there was a prima facie case because
of a failure on his part properly to specify the proposed case. A number of significant issues
arose. There appeared to be duplication not only within the Scottish group register itself,
but also across parallel proceedings being brought in Scotland and England and Wales,
18
which had not been adequately addressed and therefore raised serious questions of
duplicate claims being made, as well as questions of jurisdiction, and of case and cost
management. Given the lack of any information about the proposed group members on the
register beyond their personal details, it was impossible to know if and when each of them
was said to have purchased, leased or otherwise acquired relevant vehicles in Scotland and,
if so, for how long each had retained that vehicle. The problem was particularly acute in
respect of the proposed group members who were domiciled outside Scotland. A number of
those members were listed without an address or were shown with addresses outside
Scotland. The number of proposed group members who were domiciled in Scotland but
who purchased, leased or otherwise acquired relevant vehicles in England or Wales was
unknown and could not be ascertained from the information provided. Without such
information, it was impossible for the court to assess whether it had jurisdiction to
determine the claims. None of the defenders was domiciled in Scotland, so those details
were essential in order to assess whether there was a prima facie case.
[27]
The applicant sought permission to bring claims against two separate vehicle
manufacturers, without identifying the specific make or model of any relevant vehicle or
specific engine type contained within it. It was clear that not all of the proposed group
members owned vehicles from both Nissan and Renault. Furthermore, given the differences
in the various models and engine types, it was highly likely that the proposed group
members would need to be sub-divided in order properly to assess their claims. That was
impossible at present because the applicant made no attempt to identify either the nature of
a group member's relationship to a particular vehicle, or what was said to constitute a defeat
device. The proposed claims related to a large number of different models and different
diesel engine types, each containing their own permutations. For instance, from the
19
information available, the Renault defenders had identified over 350 different model
variants. In the K9K Renault diesel engine family alone, there were over 170 different engine
variants. The different engine types illustrated the problem with the generic pleading of the
allegations, given the variances and permutations in the design, operation, and calibration of
engines across the range of Renault vehicles. The current lack of any detail in the draft
pleadings made it all but impossible for the Renault defenders to provide a meaningful
response. Furthermore, the identification and instruction of an expert was not possible
without further specification of the claim.
[28]
Article 18 in the proposed summons made averments regarding "the group member
pursuers who financed the purchase of or leased their vehicles with the financial assistance
of the tenth defenders ..." but without making any averment that there were any such
pursuers and, if so, how many and which ones. Similarly vague phrases were used at
Articles 19 and 20. The pleas-in-law in the proposed summons set out an omnibus case in
fraud, negligence and breach of statutory duty indiscriminately against each defender. The
argument set forth by the applicant was entirely general (and generic) in nature. It made no
reference to any particular proposed pursuers, to any particular vehicles, or to any particular
device. The argument was presented at such a high level as to render it academic and
irrelevant. The proposed pleadings were so lacking in specification that they failed even to
demonstrate a prima facie case.
[29]
The applicant did not set out any case as to why the purportedly unlawful defeat
devices said to have been used were unlawful in relation to the relevant EU law. Whilst it
was not accepted that Renault vehicles contained a defeat device, the use of a device was not
unlawful if it fell within the criteria set out in Article 5 of the Emissions Regulation (ie
Regulation (EC) 715/2007). It was for the applicant to demonstrate that there was a prima
20
facie case that particular devices said to have been used by particular defenders amounted to
defeat devices for the purposes of Article 3(10) of the Regulation, and did not fall within the
Article 5 criteria for particular and specified reasons. No such pleadings were offered by the
applicant and therefore no notice was given of his position in that regard. Even if any of the
group members owned a relevant Renault vehicle at any relevant time, the applicant had in
this respect, too, not demonstrated a prima facie case.
[30]
The applicant made no attempt to quantify the proposed claims and seemed to
suggest that the court should do so for him. Absent any pleadings as to quantum, the
applicant had, once again, not demonstrated a prima facie case.
[31]
In any event, by any reckoning, a significant number of the claims sought to be
included in the register were prescribed. The application to appoint a representative party
for the purposes of these proceedings was first served on or around 19 June 2023. That
application included a first draft of the group register. In accordance with RCS 26A.18(1),
that was when these proceedings were deemed to have commenced for the individuals
included in that iteration of the group register. A significant number of the individuals
included in the schedule were said to have a "keeper start date" more than 5 years prior to
that date. Any obligation which might have existed to make reparation to those individuals
would, on the applicant's own position, have been extinguished as a result of the obligation
subsisting for a period of 5 years without any relevant claim having been made, in
accordance with sections 6 and 11 of the Prescription and Limitation (Scotland) Act 1973.
Furthermore, nine of the entries were said to have a "keeper start date" more than 20 years
prior to the commencement date, engaging section 7 of the 1973 Act. There was, therefore,
no prima facie case in relation to any of those entries on the group register.
21
[32]
It was not possible for this court to be assured that group proceedings would
represent a more efficient administration of justice on the basis of the information that had
been provided with this application. If anything, the lack of information from the applicant
suggested that an efficient administration of justice would not be rendered in a group
proceeding. The administration of justice was not made more efficient by permitting the
applicant to present claims against the defenders without providing the most basic of
information to enable them to know whether the group members ever owned a relevant
vehicle. Were each of the proposed group members to bring their own proceedings, they
would need to plead and prove their averments, including the details of the vehicle said to
give rise to the claim, the manner in which the vehicle had been purchased or leased, and the
period during which it was said to have been owned or leased. The applicant's case, as
currently pleaded, posed a serious risk that the group proceeding would be used in a
manner that permitted potentially irrelevant claims to go unnoticed, which was detrimental
to each defender's right to assess and verify each of the claims brought against it. That was
not a demonstration of the efficient administration of justice.
[33]
The test for real prospects of success was identical in wording to the test for
permission to bring an application to the supervisory jurisdiction of this court. In Wightman,
the First Division had stated:
"The words 'real prospect of success' mean what they say. ... They were designed to
set a higher hurdle than that which was described in EY [v Secretary of State for the
certainly intended to sift out unmeritorious cases, but it is not to be interpreted as
creating an insurmountable barrier which would prevent what might appear to be a
weak case from being fully argued in due course. Of course the test must eliminate
the fanciful, but it is dropping the bar too low to say that every ground of review
which is not fanciful passes the test. It is not enough that the petition is not
`manifestly devoid of merit', since that, in essence, reflects the `manifestly without
substance' test adopted in EY. The applicant has to demonstrate a real prospect,
which is undoubtedly less than probable success, but the prospect must be real; it
22
must have substance. Arguability or statability, which might be seen as
interchangeable terms, is not enough (Scottish Civil Courts Review (2009), Ch 12,
para 53). The substance, or the lack of it, is something which the court has to
determine as a preliminary issue; not after a full consideration of elaborate pleadings.
It is important therefore that those seeking permission are able to plead their cases
accurately and, crucially, succinctly both in relation to the facts and the propositions
in law."
[34]
In the circumstances of this application, the applicant had not demonstrated by way
of accurate and succinct pleading that there was any substance to the proposed proceedings.
If the court and the defenders were unable to ascertain from the application even at this
late stage whether the court had jurisdiction, whether there were any relevant proposed
pursuers who owned relevant vehicles at a relevant time, what was alleged to be unlawful
about the vehicles, or what losses were said to have been caused, the proposed claims did
not have a real prospect of success. Indeed, absent those details, the claims had no prospect
of success.
[35]
For those reasons, the court had not been provided with sufficient pleading or
sufficient foundation to allow it to be satisfied of the matters set out in RCS 26A.11(5). The
applicant had placed before the court nothing more than a replica of standardised pleadings
which contained nothing relevant to the Renault defenders or to the vehicles produced by
them. Whilst it was appreciated that group proceedings were intended to streamline
matters for the court where a large number of individual claims could be heard and
determined together, the defenders were nonetheless entitled to know what it was that they
were alleged to have done, how it was said that those actions were unlawful, who was
affected by those actions, and what losses those people were said to have been caused as a
result. Fair notice of the most basic elements of the claims was not an unreasonable request.
[36]
The unfairness of the current approach was exacerbated when one had regard to the
fact that the defenders had sought the desiderated information from the applicant's legal
23
teams on a number of occasions and across what was now a considerable period of time.
These were not matters which were being sprung on the applicant or his legal teams without
notice. They had had every opportunity to provide the requisite information to the
defenders and to the court, and it had to be assumed that a conscious decision had been
taken not to do so. The applicant and his legal teams should therefore bear the
consequences of that choice, and permission should be refused.
[37]
In relation to Mr Mackay's application to be a representative party, senior counsel
adopted the argument advanced for the first to fifth defenders, and added that, although
RCS 26A.7(2)(f) was clear that details of any funding arrangements need not be disclosed,
that did not mean that no information was to be provided. Quantum Claims was also
funding several related actions in the Scottish courts, as well as other litigations. The
applicant had given no indication of any cap imposed on the level of funding available, nor
had it been explained how the funder intended, in light of the funds apparently available
according to its accounts, to satisfy the court that it had the available financial resources to
fund this litigation, including any adverse awards of expenses. That consideration had to
have regard to the other calls on those same funds. The proposed group proceedings were
likely to be complex both legally and factually.
Decision
[38]
The background to group proceedings in Scotland is described in detail in
Bridgehouse at [4][17]. It is clear that considerations of access to justice and its efficient
administration are fundamental to the proper operation of the scheme which has been
introduced. However, though those considerations may inform the interpretation of the
relevant statutory provisions and Rules of Court, the criteria there set out must be faithfully
24
noted and applied by the court in determining applications such as those presently before it.
I do not consider it appropriate to approach the position of any party with any degree of
scepticism; what is called for is an objective and principled assessment of the material put
before the court by reference to the criteria set out in the legislation.
[39]
In relation to the question of whether permission to bring the proposed group
proceedings should be granted or refused, it will be recalled that, in terms of RCS 26A.11,
the court may refuse to grant such permission:
(a)
If it considers that all of the claims made in the proceedings do not raise
issues (whether of fact or law) which are the same as, or similar or related to, each
other;
(b)
If it is not satisfied that the representative party has made all reasonable
efforts to identify and notify all potential members of the group about the
proceedings;
(c)
If it has not been demonstrated that there is a prima facie case;
(d)
If it has not been demonstrated that it is a more efficient administration of
justice for the claims to be brought as group proceedings rather than by separate
individual proceedings; or
(e)
If it has not been demonstrated that the proposed proceedings have any real
prospects of success.
25
Dealing with those issues in turn:
Are the issues in the proposed proceedings (whether of fact or law) the same as, or similar or
related to, each other?
[40]
In Campbell v James Findlay (Kenya) Limited
submitted that the proposed group proceedings in that case failed this test because the
members of the group (Kenyan tea pickers claiming to have suffered musculoskeletal injury
as a result of the working practices required by their employer) had had different roles and
had suffered different varieties of injury. The court at [5] held that there were what it called
generic issues of fact and law which could be resolved for all the group, even though there
would have to be left over, for sub-group or possibly individual determination, particular
issues in that case, especially causation.
[41]
Although that case is by no means on all fours with the present one, in particular
because of the presence here of two distinct groups of proposed defender, certain parallels
may be drawn. Each member of the proposed pursuer group is claiming that a defeat device
was fitted in a vehicle in which he had a financial interest of some kind, and that he suffered
loss thereby. It seems likely, on that basis, that it will be possible to identify and resolve
issues of fact and law which will be of relatively general application to all group members,
even though specific issues, such as quantification of losses or prescription, may require to
be determined at sub-group or individual level. The statutory test does not require the
issues for resolution in group proceedings to be identical in the case of every member of the
group, merely similar or related to each other.
[42]
The most obvious way in which issues of fact might prove not to be similar or related
to each other in the proposed proceedings arises from the proposed convening of two
separate sets of defenders, with a current lack of clarity as to the degree to which relevant
26
activities were carried out in common or at least in co-operation. Section 21(2)(i) of the
2018 Act allowed an Act of Sederunt made in furtherance of its terms to
make provision for
the exclusion of a claim made in established group proceedings from those proceedings,
including by way of transfer of the claim to other civil proceedings, but it is not obvious to
me that that opportunity was taken up in chapter 26A, unless (which I doubt) it falls to be
implied into the very wide case management powers contained therein. Had such a power
existed, then it might have been easier to allow the proceedings as presently drafted to go
ahead, knowing that any divergence of issues which might emerge as matters proceeded
could, if necessary, result in the separation into other proceedings of any particular group
which no longer appeared to have enough in common with another. However, absent such
a power, a decision has to be made now, on the basis of the material currently available. I
was provided with a press release dated 6 February 2023 from the "Renault-Nissan-
Mitsubishi Alliance" in which it was stated that the alliance was a partnership with a unique
model which leverages
the leadership strengths of each member company, uniting their
skills, talents and technologies to streamline idea sharing, fast-track innovation, improve
cost-efficiency and add value, together with a report of a hearing by the European
Parliament's Committee of Inquiry into Emission Measurements in the Automotive Sector
dated 13 July 2016 suggesting that the hardware (but not software) of certain engine types is
common to Renault and Nissan in Europe. I consider that that material provides a proper
basis to conclude that there is sufficient communality amongst the members of the proposed
group to warrant the factual and legal issues to be ventilated in the proposed proceedings
being deemed to be, at least, "related" to each other. I accordingly determine that the
application cannot be refused on that ground.
27
Has the representative party has made all reasonable efforts to identify and notify all
potential members of the group about the proceedings?
[43]
The application states, and senior counsel for the applicant repeated, that significant
steps have been taken to identify and notify all potential members of the group about the
proceedings and that a significant amount of advertising on UK television and online by
various means has been carried out. I did not understand that to be disputed by the
defenders, and in the absence of specific criticism of the nature or efficacy of the steps said to
have been taken I am satisfied that this question calls for an affirmative answer.
Has a prima facie case been demonstrated?
[44]
As Lord Diplock observed in American Cyanamid Co v Ethicon Ltd [1975] AC 396
"'Prima facie case' may in some contexts be an elusive
concept". The experience of the intervening years have demonstrated the veracity of that
statement. The terms of RCS 26A.11 suggest that it cannot in this context involve an
assessment of whether the proposed proceedings have any real prospects of success, since
that is expressly a separate matter for consideration. The defenders made a number of
points about the deficiencies of the proposed summons, largely focusing on a lack of
essential specification, but also raising issues of jurisdiction and prescription, and the
accuracy of the group register. Had these points been made at the stage of a debate on the
relevancy and specification of the pursuers' pleadings, it would have been impossible to
deny their force. However, at this stage in the process, the existence of a prima facie case in
this particular context requires no more than the appearance of a serious question or
questions to be tried. It does not call for the application of tests of relevancy or specification
which would (and will) apply once the pleadings are finally settled. I consider that the
28
application does, in that sense, disclose a prima facie case. That case (at least in its current
mode of expression) is beset with apparent difficulties which will require to be addressed, if
need be by very robust case management, if and when matters proceed, but in the meantime
I see nothing that cannot be so addressed, and conclude that enough has been said to
demonstrate a prima facie case in the requisite sense.
Has it been demonstrated that it is a more efficient administration of justice for the claims
to be brought as group proceedings rather than by separate individual proceedings?
[45]
It is obvious that, in a case involving over eight thousand potential claimants, the
prospect of individual proceedings borders on the unthinkable, and would run entirely
contrary to the policy aim of the 2018 Act to widen and improve access to justice. It was
submitted by the defenders that different homogenous groups should be constituted,
instead of one potentially heterogenous group containing everyone with any sort of claim
against either Renault or Nissan. While there is force in that suggestion for the reasons
already canvassed, the question I am required to ask at this point is not whether different
groups would be preferable to that presently put forward, but simply whether the
administration of justice would be more efficient if the claims which have been advanced
were determined by way of group proceedings rather than by way of individual litigations.
The answer to that question must be a positive one.
Has it been demonstrated that the proposed proceedings have any real prospects of success?
[46]
It was submitted that the words "real prospects of success" ought to be construed in
the same way as a very similar phrase was construed in Wightman, in other words, as
requiring the demonstration of real and substantial such prospects, albeit less than probable
29
success, and not creating an insurmountable barrier which would prevent what might
appear to be a weak case from being fully argued in due course. Although the phrase was
used in a somewhat different context in Wightman, raising rather different issues, I accept
that submission, and consider that the application passes that test. The grounds of action
have been articulated to the level required at this stage and, despite their many weaknesses
of expression as matters stand, nothing insuperable appears to attend their prosecution. It
cannot be said that they will probably succeed in whole or in part, but they may well do,
and that suffices for present purposes.
[47]
There accordingly being no ground upon which I may refuse permission for the
proposed group proceedings to be brought, I shall grant such permission.
Application to be the representative party
[48]
In order to be authorised to act as a representative party, the applicant requires to
satisfy the court that he is a suitable person who can act in that capacity should
authorisation be given. Without prejudice to that generality, the court requires to consider
(amongst any other matters which may be relevant to the applicant's suitability) the matters
set out in RCS 26A.7(2). I set these out and comment on them in the context of the present
case as follows:
(a)
The special abilities and relevant expertise of the applicant.
It was not claimed on behalf of Mr Mackay that he enjoys any special ability or
relevant expertise; he is simply one of the members of the proposed group who is
willing to act as a representative party and appears to the solicitors who would be
conducting the proposed proceedings to be unaffected by any obvious inability to do
so. There is, accordingly, no positive contribution to be made to the decision as to
30
whether he should be authorised to be a representative party by reference to this
consideration.
(b)
The applicant's own interest in the proceedings.
It was not suggested that Mr Mackay had any interest in the proceedings save the
financial claim which flows from his membership of the proposed group.
(c)
Whether there would be any potential benefit to the applicant, financial or
otherwise, should the application be authorised.
What has been said in relation to the previous consideration applies equally here.
(d)
Confirmation that the applicant is independent from the defender.
There was no suggestion that Mr Mackay is anything other than wholly independent
of the defenders.
(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.
It is to be noted that, unlike the previous sub-paragraphs of the Rule, this head
requires the court to consider whether it has been demonstrated that the applicant
would act in the manner described and that his interests do not conflict with those of
others in the proposed group. That suggests that a burden of some sort, albeit
perhaps not a very heavy one, rests on the applicant in these regards. No positive
attempt was made to demonstrate (as opposed to assert) that Mr Mackay would act
31
fairly and adequately in the interests of the group members as a whole, though
nothing was said against him in those respects either. If, as I read this aspect of the
Rule, I have to consider what has been demonstrated in this regard, the only possible
answer is nothing.
In relation to a demonstration of the absence of conflict of interest, it was suggested
that such a conflict might emerge as and when the varying interests of the members
of the group (eg as between those claiming against Nissan and those claiming against
Renault, or as between owners and lessors) had become clear. Mr Mackay was a
Nissan owner and his interests may, therefore, not entirely coincide with those of
every other member of the group. However, as matters stand I consider the
possibility of positive conflict to be more theoretical than real, and in the event that
any conflict does emerge, RCS 26A.8 provides the means of replacing him as the
representative party. I am prepared to proceed on the basis that it has been
demonstrated that there presently exists no conflict of interest.
(f)
The demonstration of sufficient competence by the applicant to litigate the
claims properly, including financial resources to meet any expenses awards (the
details of funding arrangements do not require to be disclosed).
Again, this sub-paragraph appears to require the court to consider whether the
applicant has demonstrated that he has sufficient competence to litigate the claims
properly. Leaving aside for the moment the question of financial resources, all that
was said of Mr Mackay in this regard was that he appeared to the solicitors who
would be conducting the proceedings to be a level-headed individual who would
listen carefully to legal advice and make a sensible decision as and when called upon
32
to do so. While that may well be true, no attempt was made to demonstrate that he
was someone used to receiving legal advice, asking relevant questions, considering
and acting upon it. I would expect, in a group of more than eight thousand people,
that someone fitting that description could relatively easily be found. Mr Mackay
was, it seems, asked to volunteer as the representative party by the solicitors in
question, without reference to the views of the potential group members in whole or
in part. A possible concern as matters stand is that he might simply accept the advice
given to him somewhat uncritically, and possibly may become a mere cipher for the
solicitors in question. Since it is inappropriate for solicitors conducting the
proceedings themselves to be the representative party (Thompsons Solicitors Scotland v
best avoided. However, it would be wrong to assume that such a thing might
happen, and none of the defenders urged that consideration upon me.
Turning to financial resources, Quantum Claims Compensation Specialists Limited
has agreed to provide funding for the proposed proceedings and to bear expenses
awarded against the representative party. The latest accounts for that company (for
the financial period to 30 April 2023) disclose cash in hand at that date to be a little
over £3.9 million, and net assets of £8.9 million. The accounts are unaudited and I
was informed that no more recent figures (as, for instance, brought out in
management accounts since April 2023) were available for the court's consideration.
It was not disputed that the company had given similar undertakings in other group
proceedings and had other potential liabilities. However, I am satisfied that the
undertaking given is, at least as matters stand, sufficient to demonstrate that
adequate financial resources are likely to be available to meet any expenses awards
33
which may be made in the foreseeable future course of the group proceedings. If
that situation should change, as by the state of the company's finances deteriorating
materially, then the availability of caution may be addressed at an appropriate point.
[49]
No other matters which fell to be considered in assessing whether Mr Mackay is a
suitable person were raised before me, and none suggests itself. In summary, then, on the
positive side, Mr Mackay has a legitimate personal interest in the proposed proceedings to
the extent of his own claim, but no further; is independent of the defenders; has no present
conflict of interest with other group members; and can call upon adequate financial
resources to act as a representative party. On the other hand, he claims no special abilities or
relevant expertise, and has not demonstrated that that he would act fairly and adequately in
the interests of group members, or that he is sufficiently competent to conduct the litigation,
although, equally, nothing suggests otherwise.
[50]
Taking all of these matters into consideration, I conclude by a relatively small
margin that Mr Mackay is a suitable person to be authorised to act as a representative
party in the proposed proceedings. I expect that a more obviously suitable person could
have been found, particularly one who could be shown to have experience in considering
and acting upon legal advice and who would, therefore, be someone in respect of whom
aspects of factors (e) and (f) might have been more easily and fully demonstrated. Future
applications of this kind ought to bear such matters in mind more directly than appears to
have been typical so far. However, it is evident that a relatively benign view (I put it no
higher than that) falls to be taken of the question of suitability to be a representative party if
the group proceedings facility is to work as designed in the improvement of access to justice.
A fairly wide range of individuals may, on that view, be suitable to be a representative
party, and I consider that Mr Mackay falls within that range.
34
Conclusion
[51]
For the reasons stated, in application GP3-23, I shall authorise Mr Mackay to be the
representative party. In application GP4-23, I shall grant permission for Mr Mackay as that
representative party to bring group proceedings to be known as "Renault Nissan NOx
Emissions Group Proceedings" and put the case out for a hearing to settle the further orders
required to enable those proceedings to continue in accordance with the provisions of
Chapter 26A.
