BT Group Plc v Patourel [2022] EWCA Civ 593
This was an appeal against a Collective Proceedings Order (CPO), granted by the CAT, and provided the Court of Appeal with the opportunity to outline the law as it pertained to “opt in” or “opt out” claims and the role, if any, that litigation funding played in the exercise of the Court’s discretion. The CAT had certified the CPO on an opt out basis. The Court accepted that the principal object of the collective action regime is to facilitate access to justice for those (in particular consumers) who would otherwise not be able to access legal redress. The Court also noted that the CAT was entitled to conclude that if an opt-in was ordered the take-up could be very limited. A question for the appeal was whether the Court was entitled to take into account the preference of the litigation funder. The Court considered that the financial position of the parties, which includes their ability to attract third party funding, was identified as a matter which the Tribunal should consider when making orders. Those principles also highlighted the importance of the Tribunal taking steps to facilitate equality of arms as between litigants, which also bore upon issues of funding and representation. The Court said that commercial funders seek to profit from litigation and “the Tribunal will no doubt be alert to curb the risk that the leverage that opt-out proceedings provide is being deployed oppressively and unfairly and/or that the costs spiral out of control relative to likely awards.” At the end of the day, whilst the CAT ordered the CPO on the basis that the funder wished, the Court’s judgment was that it was a decision that the CAT was entitled to make and that it exercised independent judgment. The reality was that if the proceedings did not go ahead, because of lack of funding, then access to justice, which was a seminal principle lying at the epicentre of the jurisdiction, might be thwarted.
The Court of Appeal also commented on an area of ambiguity in the rules as to the funder’s return in CAT cases. There had been concern that certain circumstances could arise where the funder could in a sense be bypassed when it came to its recovery – as the Court said “It would defeat the purpose of opt-out proceedings, which might routinely require third party funding, if costs orders could not be made in any case where an account credit was the chosen means of achieving distribution. As to this the CAT has a wide discretion to make any case management order it sees fit and it is within its power to ensure that funders and representatives are paid.”
The Court of Appeal, in endorsing the reasoning of the CAT, clarified the position of litigation funders within the jurisdiction of the CAT and did nothing to lessen the funders’ interests in these sorts of claims. It is evident that the legislation supports funding of these claims, and the Courts are not going to undermine that legislative intent by causing difficulties for funders where none exist. That is not to say that they will not require full transparency and cooperation of funders when it comes to the provision of cost budgets and confirmation as to funding ability and terms, but it is not going to look for areas in the rules that can cause additional confusion in what is already a very complicated area of law and practice.