Dieselgate

ARTICLE

Dieselgate

Behind the scenes of group litigation

Earlier this year the Volkswagen Group paid out £193m to some 91,000 claimants, collectively represented by Leigh Day and two other claimant law firms, who alleged the global car maker used unlawful defeat devices which artificially lowered the NOx emissions of their vehicles for the purposes of passing emissions tests, only for the vehicles to produce increased NOx emissions when being driven on the road in “real-world” conditions. Dubbed ‘Dieselgate’, it is the biggest consumer group action brought before the English courts.

A class act

There is no legal definition of a class action (also referred to as group, collective or mass actions), although such cases typically feature multiple claimants whose claims are similar in nature and who are pursuing the same defendant or defendants. In England and Wales, most group actions operate on an opt-in basis (as opposed to the opt-out system common in the US) which means that a claimant must take proactive steps to join the claim, including signing up with a law firm and providing evidence. Leigh Day aims to make this process as frictionless as possible through the use of digital online platforms and dedicated claim management teams. Clients can, in most cases, sign up, sit back and wait – with insurance taken out on their behalf to remove financial risk, in the unlikely event that the case is lost.

Litigation funding for group claims

Third party funding is becoming the cornerstone of group litigation. Litigation finance enables a claimant firm to get a case up and running which, in the case of the diesel emissions cases, is a massive and costly operation involving lawyers, barristers, experts, court fees, marketing campaigns and more. Litigation funders apply a careful calculus to deciding which cases they will fund. Forefront in the funder’s mind are the prospects of succeeding at trial (most funders require a minimum success rate of 60%), the overall value of the claim and the financial health of the defendant, among others. They will also expect a law firm to have insurance in place (known as after the event insurance) to shield both clients and the funder from having to pay the defendant’s costs should the claimants lose.

If you build it

Once a funder signs on, the next step is to get clients to sign up, a process known as ‘book build’. Book build is in essence a massive awareness-raising campaign designed to reach as many potentially eligible claimants as possible. In the case of the diesel emissions group claims, these are people who purchased or leased a diesel car in England or Wales on or after a specific date among the following brands: Nissan/Renault, Ford, Mini, Volvo, Jaguar Land Rover, Mercedes-Benz, BMW, Porsche, Audi, Seat, Skoda, Volkswagen, Vauxhall/Peugeot/ Citroen.

It only takes a moment

If by this point you are wondering whether you are eligible, you can find out in seconds by entering your car’s vehicle registration number into the Leigh Day eligibility checker. Leigh Day’s emissions teams make judicious use of Artificial Intelligence to quickly collect and process data, keep tens of thousands of clients up to date and meet critical deadlines.

CORLA and the case for reform

Even where opt-in class action works well – as in the recent Volkswagen settlement – one wonders how many more people would have joined the claim and obtained a settlement payment had it been on an opt-out basis. Currently opt-out class action is only available for competition claims in the UK (price fixing, cartels, etc) but pressure has been mounting to extend the regime to a wider range of consumer claims. Earlier this year Leigh Day joined five leading firms in setting up the Collective Redress Lawyers Association (“CORLA”) whose aim is to increase access to justice for claimants who have suffered as a result of wrongful conduct and who are seeking to assert their rights on a collective basis.

If you want to go far, go together

Group litigation enables the many to do what would not be possible alone. It is a critical ingredient in ensuring justice is available to all, not just those who can afford to fight. But it is not a perfect system and many gaps remain. There are many worthy cases where the financial return is too low to attract litigation funding, which means that often law firms cannot afford to take them on. Adopting an opt-out regime for a wider range of group claims in England and Wales would go some way toward addressing that gap.

Morgan Wolfe

Morgan Wolfe

Solicitor, Leigh Day

Morgan Wolfe is a solicitor in Leigh Day’s Human Rights team and helps run the firm’s group emissions claim against Nissan/Renault.