‘Representative’, ‘class’ or ‘group’ actions allow collective redress in civil litigation in England & Wales, Australia and the United States.  However, there are critical differences between the rules that govern such actions in these jurisdictions, not only in relation to the procedural hurdles but also regarding the role of litigation funding.

We have highlighted the key distinctions in the table below, but start with some general points:

• It is more difficult to get a representative action started in England than it is in the United States, where the threshold for certification is lower, and in Australia where no certification is required at all. The rules in England require potential claimants to “opt in” to a representative action.  By contrast, the “opt out” regimes in Australia and United States only require a single plaintiff, making class actions much easier for lawyers to commence.
• The absence of the “loser pays” principle in United States litigation removes the need to consider the critical issue of who will bear adverse costs, an issue that often prevents or delays class actions in England and Australia. However, in England, the usual order under a Group Litigation Order that each claimant is severally liable for an equal (or pro rata) share of adverse costs only, is pro-claimant and promotes the commencement of group actions.  No such order will be made in Australia meaning that almost all class actions require a third party litigation funder to indemnify the lead plaintiff(s) for adverse costs.
• The availability of damages-based agreements (DBAs), under which lawyers can charge a percentage of compensation received, enable class actions to be brought in England and the United States without the involvement of a third-party litigation funder. However, in practice, DBAs are rarely used in England and law firms are usually reluctant to fund counsel fees, ATE insurance premiums and other cash disbursements and so funders are involved in most representative actions.  Australia has the most restrictive rules for contingency fee arrangements which has increased the role and importance played by funders in class actions.
• The availability of jury trials and punitive damages in class actions in the United States means that super-sized awards are more likely than in England and Australia where trials are determined by judges-alone and punitive damages are generally not available. However, unlike in England and Australia, successful plaintiffs in United States class actions cannot recover the (often significant) costs of pursuing these actions.

The team at Balance Legal Capital has considerable experience in relation to international class actions and issues that commonly arise in funding these proceedings.  Please feel free to get in touch if you would like to discuss this further.