Two years on from the UK’s first lockdown and the buzz has returned. Litigators might now work part-time from their homes and courts persist with virtual hearings for simple procedural hearings and the like, but a level of pre-2020 familiarity has been restored.
While 2021 saw a handful of cases arising from Covid-19, the City is yet to be flooded with the wave of countercyclical issues predicted back in March 2020. Instead, cases have been driven by trends that have been brewing for years. Top of that list: class actions.
The claimant-friendly judgment in Merricks v Mastercard in December 2020 certifying the collective action paved the way for group competition actions to proceed to the Competition Appeals Tribunal (CAT).
Since then, new actions have proceeded with pace says Backhouse Jones’ Steven Meyerhoff, who is acting for the Road Haulage Association in the mammoth truck cartel litigation: ‘There has been a plethora of actions since December 2020; there is a real appetite to formulate claims and hold to account those companies who flout competition law.’
Among the new claims to look out for in 2022 are the proposed opt-out actions against Google and Apple alleging abuse of dominant position of their respective app stores and the opt-out collective claim filed by consumers’ association Which? against Qualcomm.
The Merricks decision has also unshackled existing claims, the progression of which will be closely watched as they make their way through the tribunal process. Among the issues to be considered is the tribunal’s treatment of carriage disputes, which is relevant to both the foreign exchange interchange fee litigation and the truck cartel litigation, where competing claims relating to the same issues have been brought.
The result of which, expected in 2022 for the trucks litigation, will be another milestone for the CAT, says Addleshaw Goddard’s Samantha Haigh, who is one of the partners advising the Road Haulage Association in its claim: ‘That dynamic of how the CAT is going to deal with multiple applicants for the same claim is going to be massive for the market because law firms spend a lot of time and money bringing a claim and getting the funding in place.’
‘The court is grappling with the intersection between a range of causes of action such as misuse of private information, breach of confidence and even negligence in the context of the processing of data.’
David Barker, Pinsent Masons
High-profile class actions also continue outside of the CAT, including the emissions disputes arising from the much-publicised ‘Dieselgate’ scandal. This has snowballed since the original revelations made concerning Volkswagen in 2015, with further actions being brought against several other brands.
In the data privacy space, a wave of class actions was quelled by the Lloyd v Google claim, which was shot down by the Supreme Court in November 2021. Since then, several third-party funder-backed claims waiting in the wings have been dropped.
However, this is unlikely to be the end of data and privacy disputes. As Pinsent Masons’ David Barker asserts: ‘The court is grappling with the intersection between a range of causes of action such as misuse of private information, breach of confidence and even negligence in the context of the processing of data. We will continue to see cases dealing with these issues in the next few years.’
This is driven not only by regulatory changes and heightened public consciousness following GDPR, but also an increase in cybersecurity breaches. He observes: ‘There are more cyber attacks and that’s driving claim activity. There is also a more rigorous notification obligation under GDPR and therefore data subjects are getting to know about the possibility that data has been compromised.’
For group claims in this space, we could see claimant firms and funders divert their efforts to repackage data privacy claims as competition law issues before the CAT. A recent example of this is a damages claim backed by litigation funder Innsworth, which is being brought against Meta (formerly Facebook) on behalf of UK Facebook users for alleged abuse of its dominant market position.
Meanwhile, against a backdrop of group actions and innovative actions, our top cases countdown still finds room for some old-fashioned fraud litigation.
A development closely followed in this space is that of the Quincecare duty, which although dating back to the 1992 case of Barclays Bank v Quincecare, has been resurrected in a series of cases in recent years; first in Singularis Holdings (In Official Liquidation) v Daiwa Capital Markets Europe in 2019 and then Hamblin & Anor v World First in 2020.
This year, a decision handed down by the Court of Appeal on 14 March in Philipp v Barclays Bank confirmed that the duty could apply where an instruction comes directly from an individual customer. Now, all eyes are the high-profile case of Nigeria v JP Morgan, which explores the duty further.
Finally, adding fuel to the incoming court traffic, ESG issues are reaching maturity and hitting the courts. Following litigation exploring issues of corporate accountability of UK-domiciled parent companies for human rights and environmental breaches of their subsidiaries abroad, such as in Vedanta Resources v Lungowe and Okpabi v Royal Dutch Shell, a recent claim against British American Tobacco (BAT) and Imperial Brands brought on behalf of Malawian tobacco farmers will test this application regarding the defendants’ supply chain.
The recent case of the Hague District Court v Shell on the continent has also thrust climate change issues to the fore. Since then, in the UK, Pallas Partners announced in March that it is representing ClientEarth in a claim against Shell’s board of directors for their alleged climate risk mismanagement. While energy companies have been the first to come up against ESG claims, they should not be the only ones heeding the warning, says Hogan Lovells’ Akima Paul-Lambert: ‘While oil and gas are probably claimants’ favourite targets, any industry which opts for an upstream model, where there is an integrated supply chain could be affected and ought to be taking advice.’
There is little doubt among litigators that disputes associated with a downturn are coming this year. The invasion of Ukraine and related sanctions only compound the predictions that have been made since the start of the pandemic. Not least, the impact of rising energy prices will reverberate across a range of industries as contracts become unprofitable.
But as the prodigal countercyclical cases return, competition disputes, technology, data and ESG issues, as well as the continued evolution of UK class actions, are unlikely to take a backseat. LB
DIESELGATE – VOLKSWAGEN EMISSIONS SCANDAL
Claims arising from one of the biggest scandals to hit the automobile industry escalates in the UK courts after Volkswagen Group (VW) failed to convince the High Court to dismiss the case in December 2021.
The so-called ‘Dieselgate’ scandal broke in the US in September 2015, after the Environmental Protection Agency accused Volkswagen Group (VW), the owners of brands including Audi, Skoda and SEAT, of rigging diesel engine emission tests.
The controversy arises from the installation of software that acted as a ’defeat device’ under EU rules, which enabled it to emit less emissions during compliance testing. The group action is brought by about 86,000 owners of the affected vehicles and alleges fraudulent misrepresentation in the sales, among other claims.
The trial, which is listed to begin in 2023, is the first of a series arising from the scandal to hit the UK courts, with others against brands including Daimler, Fiat Chrysler, Renault, Nissan, and Vauxhall, as well as a second claim against VW issued this year, all lined up. Meanwhile, the scandal has resulted in a series of civil and criminal claims across other jurisdictions, including the US and Germany.
For claimants: Gareth Pope (Slater & Gordon); Tony Winterburn (Excello Law); Boz Michalowska and Shazia Yamin (Leigh Day) instructing Tom de la Mare QC (Blackstone Chambers); Oliver Campbell QC and Adam Heppinstall QC (Henderson Chambers); Adam Kramer QC (3VB).
For defendants: Freshfields Bruckhaus Deringer partners John Blain and James Robert instructing Charles Gibson QC, Prashant Popat QC and Geraint Webb QC (Henderson Chambers); Brian Kennelly QC (Blackstone Chambers).
EURASIAN NATURAL RESOURCES CORPORATION (ENRC) v DECHERT & SFO
The protracted saga between ENRC, the Serious Fraud Office (SFO), Dechert and the firm’s former head of white-collar crime, Neil Gerrard, reached trial last year.
The £70m claim brought in 2019 was heard by the High Court in an 11-week trial between May and September 2021. It centres around allegations that Dechert, which represented ENRC between 2011 and 2013, colluded with the SFO during an investigation into the company.
After years of reputational snags for the SFO, the outcome is of enormous public interest. Judgment is pending.
For ENRC: Hogan Lovells’ Michael Robert instructing Nathan Pillow QC, Tim Akkouh and Freddie Popplewell (Essex Court Chambers).
For Dechert: Clyde & Co’s Richard Harrison instructing Andrew Onslow QC (3VB); Nicholas Purnell QC, Jonathan Barnard QC and Rachel Kapila (Cloth Fair Chambers).
For the SFO: Eversheds Sutherland’s Gary Pellow instructing Simon Colton QC (One Essex Court).
JOSIYA & ORS v BRITISH AMERICAN TOBACCO (BAT) AND IMPERIAL BRANDS
Tamara Oppenheimer QC , Fountain Court Chambers
An attempt to hold the tobacco giants to account for exploitation of vulnerable individuals in their supply chains is set to proceed, following failed strike-out attempts in 2021.
At the time of the strike-out application the claim was being brought on behalf of 7,263 tobacco farmers, comprising 4,066 adults and 3,197 children, against British American Tobacco. The claimant group has since grown to around 10,000 individuals.
The allegations of negligence and unjust enrichment relate to ‘unlawful, exploitative and dangerous conditions’, and child labour and forced labour on farms which purportedly form part of the defendant’s supply chains.
This case follows the Supreme Court decisions in Vedanta Resources v Lungowe and Okpabi v Royal Dutch Shell, which tested the ability of claimants to bring claims against UK-domiciled parent companies for the acts or omissions of their overseas subsidiaries.
For claimants: Leigh Day’s Martyn Day and Oliver Holland instructing Richard Hermer QC (Matrix Chambers); Tamara Oppenheimer QC (Fountain Court Chambers); Edward Craven (Matrix Chambers) and Kate Boakes (12 King’s Bench Walk).
For BAT: Slaughter and May’s Camilla Sanger, Jonathan Clark and Richard Swallow instructing Charles Gibson QC (Henderson Chambers); Alex Barden and Jacob Turner (Fountain Court Chambers).
For Imperial: Ashurst’s Jon Gale and Sophie Law instructing Shaheed Fatima QC and Andrew Scott QC and Timothy Lau (Blackstone Chambers).
HEWLETT-PACKARD v LYNCH AND HUSSAIN
Andrew King, Travers Smith
After a gruelling seven years, a judgment was handed down in the UK’s biggest fraud case.
The claim brought by US tech giant Hewlett-Packard (HP) related to its $10.3bn acquisition of Autonomy and alleged fraud by the defendants in distorting the value of the company.
While the full judgment is yet to be published, in a summary of the court’s conclusions it held that HP ‘substantially succeeded’ in its claims. Quantum is also yet to be decided, although the judge ruled that the FTSE 100 giant will receive ‘substantial’ damages, but less than the $5bn claimed.
Autonomy co-founder Mike Lynch’s extradition to the US to face criminal fraud charges has since been approved. Clifford Chance has announced its intention to appeal both the civil decision and the extradition.
For HP: Travers Smith’s Toby Robinson and Andrew King instructed Patrick Goodall QC (Fountain Court Chambers); Laurence Rabinowitz QC and Conall Patton QC (One Essex Court).
For Lynch: Clifford Chance’s Kelwin Nicholls instructed Richard Hill QC and Sharif Shivji QC (4 Stone Buildings).
For Hussain: Simmons & Simmons’ Ian Hammond instructed Paul Casey (Fountain Court Chambers).
LLOYD v GOOGLE
The long-awaited decision in Lloyd v Google quells the expectation of a deluge of privacy class actions in the UK.
The claim was brought on behalf of four million Apple iPhone users relating to a breach of privacy laws as a result of cookies used by Google to track some of their internet activity for commercial purposes.
The judgment, handed down on 10 November 2021, came as a blow to claimant firms and funders alike, many of which were gearing up to bring group actions in this space. Says Pinsent Mason’s David Barker, who represented Google: ‘Essentially, the court said that the s19.6 procedure under the Civil Procedure Rules (CPR) is just not amenable to this sort of class action, because the whole nature of damages in English law is about compensating claimants on an individualised basis for the wrong that has happened to them, insofar as that is possible.’
He adds: ‘This is probably the most significant data protection case that there has been so far in this jurisdiction. It means that opt-out claims in a data privacy context are now unlikely to proceed with anything like the sort of momentum that the market thought might be the case.’
The impact could go beyond data privacy actions says Barker. ‘It is also likely to have a dampening effect on class claims in other contexts too, because they are going to be less straightforward to bring under s19.6 of the CPR.’
For Lloyd: Milberg London’s managing partner James Oldnall instructing Hugh Tomlinson QC (Matrix Chambers); Oliver Campbell QC (Henderson Chambers) and Victoria Wakefield QC (Brick Court Chambers).
For Google: Pinsent Masons’ David Barker enlisted Antony White QC and Edward Craven (Matrix Chambers).
FEDERAL REPUBLIC OF NIGERIA (FRN) v JP MORGAN CHASE BANK (JP MORGAN)
Jonathan Cary, RPC
The Quincecare duty has been thrust back into the spotlight in recent years, and now it has reached new levels of fame as its application is tested in relation to the high-profile ‘Malabu scandal’.
The $875m claim brought by FRN against JP Morgan relates to the US investment bank’s role in the 2011 $1.3bn acquisition of an oil prospecting licence by Shell and Eni. The state alleges that the bank acted negligently in releasing three transfers that allowed corrupt officials to pilfer hundreds of millions of dollars from government accounts.
As well as the UK civil claim, the scandal resulted in several civil proceedings and criminal actions in various other jurisdictions, including Italy, Switzerland, the Netherlands and the BVI.
The six-week trial started in the High Court in February 2022. The legal and banking industries are watching on keenly.
For FRN: RPC’s Tom Hibbert, Jonathan Cary and Alan Williams instructing Roger Masefield QC, Richard Blakeley and Jonathan Scott (Brick Court Chambers)
For JP Morgan: Freshfields Bruckhaus Deringer partner Sarah Parkes instructing Rosalind Phelps QC and David Murray (Fountain Court Chambers)
ZXC v BLOOMBERG
Another much-awaited Supreme Court decision came in 2022, signifying another blow for the media and freedom of expression.
The case concerns the publication by Bloomberg of a leaked, confidential document relating to a criminal investigation into the claimant, a US businessman.
Finding that individuals have an expectation of privacy in relation to criminal investigations, the decision leaves the door open for claimants to pursue reputational damage claims under misuse of privacy.
This reflects a trend of claimants moving away from onerous defamation claims to those of misuse of privacy as a means of achieving reputational redress. ‘This has been happening over a period of years; one reason why the Supreme Court decision was anxiously awaited was because we haven’t had many on this issue,’ says Keith Mathieson of RPC, who represented Bloomberg.
The judgment, handed down on 16 February, follows earlier decisions that found for claimants against media companies, such as the 2018 case of Sir Cliff Richard v BBC and Sicri v Associated Newspapers.
As one media lawyer puts it: ‘It’s actually a bit depressing. The media has had a spate of cases where the facts are not engendering very much judicial sympathy, in fact it’s the opposite, they are actually painting the media in quite a bad light.’
For ZXC: David Byrne (then of Byrne and Partners, now of counsel at Larson) instructed Tim Owen QC and Sara Mansoori of Matrix Chambers.
For Bloomberg: RPC’s Keith Matheison instructed Antony White QC (Matrix Chambers) and Clara Hamer (5RB).
SKATTEFORVALTNINGEN (THE DANISH CUSTOMS AND TAX ADMINISTRATION) (SKAT) v SOLO CAPITAL PARTNERS (IN SPECIAL ADMINISTRATION)
The Court of Appeal has resurrected Danish national tax authority Skatteforvaltningen (SKAT)’s $1.4bn claim for recovery of dividend tax refunds that were paid following alleged fraudulent misrepresentations.
The 2022 Court of Appeal judgment allowed for all but one claim to proceed on the basis that they did not constitute revenue matters but fraud allegations. This reversed a High Court decision handed down on 27 April 2021, which dismissed all claims on the basis that the UK courts do not have jurisdiction under Dicey Rule 3.
For SKAT: Pinsent Masons’ Alan Sheeley and Stuart McNeill instructing Lord Pannick QC and Andrew Scott QC (Blackstone Chambers); Michael Fealy QC, Jamie Goldsmith QC, Abra Bomp and KV Krishnaprasad (One Essex Court); Jonathan Schwarz (Temple Tax Chambers).
For the defendants: Chris Waters (Meaby & Co) Justin Nimmo (Rosenblatt) Richard Twomey and Joshua Fineman (DWF); Keith Thomas and Laura Jenkins (Stewarts); Richard Langley (BDB Pitmans); Kevin Roberts (Cadwalader); Nigel Jones QC (Gatehouse Chambers); Kieron Beal QC (Blackstone Chambers); Lisa Freeman (Furnival Chambers); Laurence Page (4 Pump Court); Ali Malek QC, George McPherson, Tom De Vecchi and Sophia Dzwig (3VB); Alison Macdonald QC and Luke Tattersall (Essex Court); Adam Zellick QC and Ian Bergson (Fountain Court Chambers); Robert Palmer QC, Christopher Vajda QC and Conor McCarthy (Monckton Chambers).
TRUCK CARTEL FOLLOW-ON LITIGATION
Nicholas Frey, Freshfields Bruckhaus Deringer
Six years after the European Commission issued a €2.9bn fine against six of the world’s largest truck manufacturers for price fixing, the follow-on damages cases are still building momentum.
With multiple ongoing claims, including both opt-in and opt-out group claims, the volume of potential claimants is stacking up. The appetite of funders and firms alike means that the aftermath of this scandal is still gaining traction.
Most advanced in the tribunal process is a claim brought by Royal Mail against DAF Trucks and others, with a 10-week trial set to start on 26 April. The remaining claimants, funders and firms are watching intensely, hoping to gain insight into tribunal’s approach to the case and how it will estimate price overcharge, following differing approaches coming from other European courts.
There are also two claims currently seeking collective proceedings orders (CPO) from the CAT. One is for an opt-out claim brought by UK Trucks Claim Limited against Iveco and Daimler, and the other brought by The Road Haulage Association on an opt-in basis on the behalf of over 17,000 claimants (including purchasers of both new and used trucks) against Iveco, MAN and DAF.
For claimants: Mark Molyneux and Samantha Haigh (Addleshaw Goddard); Laurence Pritchard (Weightmans); Ed Coulson (Bryan Cave Leighton Paisner); Scott Campbell and Anna Morfey (Hausfeld); Steven Meyerhoff (Backhouse Jones); Euan Burrows, James Levy and Simon Bromwich (Ashurst).
For defendants: Jonathan Hitchins (Allen & Overy); Kim Dietzel, James Farrell and Stephen Wisking (Herbert Smith Freehills); Bea Tormey and Nicholas Frey (pictured) (Freshfields Bruckhaus Deringer), Damien Taylor, Holly Ware and Richard Swallow (Slaughter and May); Caroline Edwards (Travers Smith); Alan Davis and Jacqueline Harris (Pinsent Masons).