The rules are straightforward. They provide that anyone wishing to be a representative party in group proceedings must apply to the court in order to do so. The new rule 26A.7 provides that the Lord Ordinary will take into account various factors when reaching that decision including (a) the special abilities or 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 if authorised; (d) confirmation that the applicant is independent from the defender; (e) demonstration that the application would act fairly and adequately in the interests of the group members as a whole and does not have a conflict of interest; and (f) the demonstration of sufficient competence by the application to litigate in the claims properly, including financial resources to meet awards. Interestingly, although litigation funding may well feature heavily in group proceedings just as it does in class actions in other jurisdictions, the rules expressly provide that details of any funding arrangements do not require to be disclosed.
The group proceedings will then commence with a permission stage similar to that in judicial review whereby under rule 26A.11 the Lord Ordinary has to consider whether (a) there is a prima facie (i.e. stateable) case; (b) whether the applicant has demonstrated that group proceedings are more efficient for the administration of justice than individual proceedings; and (c) whether it has been demonstrated that the proposed proceedings have any real prospects of success. The latter criteria will presumably entirely mirror the slightly vague test that has developed in judicial review proceedings. If these criteria are not all met, the court can refuse permission for group proceedings to be raised.
Although the Act provides for both "opt in" proceedings whereby individuals have to pro-actively agree to participate in the proceedings and "opt out" proceedings whereby, assuming the individual belongs to a particular class, they will be taken to have agreed to participate unless they expressly decline to do so, the rules only provide for the introduction of "opt in" proceedings for the time being. The Lord President has issued a note saying that consideration is being given to the rules for opt out proceedings which will be introduced in due course. The proceedings themselves are, thankfully, subject to a very careful case management procedure not dissimilar to that employed in commercial actions. Judicial case management is now the norm and it is welcome to see such detailed case management provisions for group proceedings.
It will be interesting to see when the first group proceedings are raised and which groups make use of them first. I provided some thoughts on that in my Herald article. It will also be interesting to see how the groups are funded. Private funding may, of course, be an option but the experience south of the border is that litigation funders take particular interest in larger class actions where there is a potentially significant financial reward for them in the event of success. The experience in Scotland may well be the same.
