Group Litigation Orders (GLO)

Introduction:

In the UK, the legal landscape differs from the American-style ‘opt-out’ class actions, with the exception of specific consumer competition claims. The primary procedure for managing multi-party actions, including securities claims, is through Group Litigation Orders (GLOs). Unlike ‘opt-out’ systems, GLOs follow an ‘opt-in’ approach, where each claimant must individually file their own claim. This means that only those who actively make claims with their names on the Claim Form will be entitled to participate in the litigation and receive any awarded compensation or damages.

Key Features of Group Litigation Orders:

• Individual Claims: Within a GLO, each claim is treated as an individual claim. GLOs are used to address common or related factual and legal issues, referred to as GLO issues.
• Case Management Advantages: Group Litigation offers several case management advantages over simple multi-claimant actions. GLOs require that all claims on a specific matter must be filed in the court where the GLO is issued. This helps prevent multiple, separate proceedings and the risk of inconsistent outcomes. GLOs are also publicised, making it easier for eligible claims to be brought within the Group Litigation. Furthermore, GLOs often establish a ‘cut-off date,’ encouraging eligible claimants to join the action promptly, rather than waiting for the limitation period to expire.
• Binding Judgments: Once a GLO is established, any judgment on one GLO issue is binding for all other claims on the group register, unless the court orders otherwise. In certain cases, a lead or test claimant may be selected to decide specific issues.
• Cost Rules: Specific cost rules apply to GLOs, which are beneficial to claimants. Unlike regular multi-claimant actions where cost liability is joint and several, under a GLO, each claimant is individually liable for their costs and severally liable for an equal share of the common costs associated with pursuing the group action. This means that each claimant is only responsible for their share of the costs and no other claimant’s costs.
• Adaptation to Economic Interests: In securities actions managed with a GLO, the court recognizes that claimants’ economic interests may vary. Therefore, the court may pro-rate each claimant’s contribution to common costs and liability for adverse costs based on the size of their economic interest in the claim, such as the size of their shareholding.

Conclusion:

While Group Litigation Orders are used in the UK, they remain relatively infrequent compared to class actions in the United States. Lead Social and our partners have extensive experience in channeling and managing claims within a GLO, so are well-positioned to provide guidance on the benefits and nuances of these procedures.

In English legal procedures, there is also another form of collective action known as a representative action. Representative actions involve one claimant representing other parties with identical interests, often used in trust-related cases. However, representative actions are not suitable when the group of claimants or defendants has varying remedies, defenses, or significantly different fact patterns forming the basis of their claims. Therefore, GLOs, with their clearly defined common ‘GLO issues,’ are typically preferred for collective actions in England and Wales, especially in the context of securities actions.