A group action is when lots of people join forces to take legal action against the same organisation. It’s a powerful way to hold companies to account when their actions, like selling faulty products, mishandling personal data, or breaking consumer laws, have harmed many people in a similar way.
Also known as group claims (or class actions in the US), they level the playing field for ordinary people taking on powerful corporations. By standing together, claimants have a stronger voice and a better shot at getting the justice they deserve.
How do group action claims work?
Instead of individuals pursuing separate legal cases, which can be time-consuming and costly, a group claim consolidates multiple cases into a single legal action. Group claims streamline the legal process and amplify the claimants’ voices, making it harder for large organisations to dismiss or undermine their allegations.
Group actions offer several key benefits, including:
- Strength in numbers: People increase their collective power by joining forces with others who have experienced similar harm.
- Cost: Group actions allow consumers to share the costs of litigation, making it more affordable to pursue a claim. In addition, many law firms run group claims on a no-win, no-fee basis.
- Access to legal expertise: Group actions are typically handled by law firms with expertise in collective litigation, so people benefit from professional legal representation.
- Streamlined process: Instead of numerous individual cases, a group action consolidates all claims into a single legal process.
- Fair compensation: A group claim doesn’t mean everyone will get the same level of compensation. Often, claimants are grouped according to the level of harm/loss they have suffered. This ensures everyone gets a fair settlement if the case is successful.
- Greater accountability: By facing a united group of claimants, wrongdoing organisations are more likely to be compelled to change their practices and provide remedies for the damage caused.
- Encouragement for others to act: Seeing a group of people stand up for their rights can encourage others who have been similarly affected to come forward, increasing the reach and impact of the claim.
Group claims in the UK
In the UK, group claims are becoming increasingly common and address different types of alleged wrongdoing. For example:
- Volkswagen agreed to pay around £193 million in compensation to around 91,000 UK car owners after it installed software in diesel vehicles to cheat emissions tests. This was one of the largest group settlements in the UK.
- In 2018, British Airways suffered a major data breach that compromised the personal and financial information of approximately 400,000 customers. In 2021, the British Airways data breach action was resolved on confidential terms following successful mediation and negotiation.
- Due to faults in the Post Office’s Horizon IT system, hundreds of sub-postmasters were wrongly accused of theft and fraud. Many were prosecuted, leading to wrongful convictions and severe personal and financial harm. In 2019, a group action led to a £58 million settlement for 555 sub-postmasters. Additionally, many of the wrongful convictions have since been quashed, leading to further legal actions and compensation claims.
- After the Supreme Court ruled that Uber drivers are workers, not self-employed contractors, thousands of claimants successfully made a group action case to seek compensation for unpaid wages.
Types of group actions
There are several types of group action claims in England and Wales, including:
Collective Proceedings
These are used for certain types of claims and are made on behalf of everyone affected by an organisation’s wrongdoing, often without their consent or knowledge. Also known as “opt-out” claims, people are automatically included unless they choose to withdraw, so these claims can involve a large number of people.
Representative Actions
This type of claim is launched when a group of people experience similar harm from the same issue. One person typically represents the entire group in the lawsuit. Like collective proceedings, these are also opt-out claims.
Group Litigation Orders
A Group Litigation Order (GLO) allows people with similar issues to have their cases handled together. Unlike the other types of group actions, claimants must opt-in to join a GLO. Each person must prove their case individually and will receive compensation based on their specific harm if successful. Often, a few cases are used as test cases to guide the outcome for the group.
No-win, no-fee group action claims
No-win, no-fee agreements are common in group litigation claims. They allow individuals to pursue legal action without any upfront costs. Under this agreement, the solicitor or law firm handling the case agrees not to charge the client any legal fees if the case is unsuccessful. If the claim is successful, the solicitor will usually take a pre-agreed percentage of the compensation awarded to the client as their fee.
The no-win, no-fee arrangement typically works as follows:
- Initial assessment: The law firm will assess the merits of the case and the likelihood of success. If they believe there is a strong chance of winning, they will offer to take the case on a no-win, no-fee basis.
- No upfront costs: Claimants do not have to pay any upfront legal fees to participate in the group action. This makes it accessible to individuals who might otherwise be unable to afford the cost of pursuing a claim.
- Success fee: If the group action is successful, the law firm will deduct a success fee from the compensation awarded to each claimant. This fee is usually a percentage of the compensation and is agreed upon before the case begins. The rate can vary, but it is typically capped at a reasonable level, often around 25-40% of the awarded amount (although it can be higher in some claims).
- Insurance: Often, the law firm will take out an insurance policy (known as After-the-Event or ATE insurance) on behalf of the claimants. This insurance covers the legal costs if the case is lost, ensuring the claimants are not liable for any costs if the group action fails.
Before joining a group action, it’s vital that you fully understand the terms of the no-win, no-fee agreement, including the percentage of the success fee and any other potential costs that may arise. For example, if you deliberately mislead your solicitor or withdraw from the action, you might be responsible for all costs and disbursements (expenses) incurred by your solicitor.
The role of Join the Claim
At Join the Claim, we play a crucial role in making group claims as effective as possible. We are not a law firm. Instead, we connect people who have been wronged with experienced partner law firms that specialise in group actions.
Ready to take a stand?
If you think you’ve been affected by corporate wrongdoing, check out the claims on our website.
Join the Claim connects consumers with SRA-regulated lawyers. Keep an eye out for updates on any potential claim and possible eligibility checks/registration opportunities.
