Miscoordination Between Claimant Firms Leads to Refusal of Relief from Sanctions for Failure of Claimants to be Added to Group Register
Last week, Senior Master Fontaine handed down her judgment in the most recent stage of the VW Emissions Group Litigation. The judgment was in respect of a relief from sanctions application made by a group of claimants who failed to be added to the group register. The application involved an unexplained and remarkable 2.5 year period of delay.
Procedural background to the application
A group litigation order made on 10 April 2018 required claimants to be added to a group register which recorded the details of every claimant in the group litigation. The group register eventually contained some c. 91,000 claimants. Leigh Day and Slater & Gordon were the lead solicitors of the group litigation and were responsible for managing the group register. This order contained a provision requiring claimant firms to provide necessary information to the lead solicitors so that they could properly include all of the relevant claimants on the group register.
The deadline for addition to the register was initially 7 December 2018. This deadline was extended by consent to 15 February 2019. This date was selected so that all of the claimants in the group litigation would be on the register by the time of the first CMC on 5 March 2019.
49 claimants, represented by E. Rex Makin & Co (ERM), failed to be added to the group register either by the December 2018 deadline or the extended February 2019 deadline.
The lead solicitors initially ran into difficulty standardising the data of claimants for inclusion onto the group register due to the sheer number of claimants involved, and the fact that those claimants were represented by over ten different firms. It was decided that an Excel spreadsheet format would be used with drop-down data fields which would standardise the format of claimant data for inclusion into the group register.
ERM had provided the data of most of their claimants to the lead solicitors on the afternoon of 14 February 2019, though not in the format requested by the lead solicitors. With only one afternoon until the deadline, the lead solicitors were not able or willing to manually input the data of all of those claimants into the Excel spreadsheet. As a result, they were not included in the group register.
An order was made at the first CMC dealing with various matters relating to amendment and late additions to the group litigation order. This order required any applications for relief from sanctions and for inclusion on the register to be listed and served with supporting evidence by 15 March 2019. ERM had expressly intimated to the court before the first CMC that it would be making such an application.
The order also contained an ‘unless’ provision. Claimants who failed to secure their addition to the group register by 18 April 2019 would have their claims automatically struck out.
ERM made an application for relief from sanctions on 14 March 2019 in relation to their failure to join the group register by the 15 February 2019 deadline. They also sought a declaration that the ERM claimants had validly complied with the provisions of the 10 April 2018 order which related to the provision of information to the lead solicitors for inclusion on the register.
This application was made against the defendants, but the lead solicitors were not given notice of it. The defendants consented to the relief from sanctions application, but not the declaration, being of the view that this was a matter between claimant firms.
Although granted relief from sanctions in respect of their failure to be added to the group register, ERM failed to subsequently provide claimant data in the required format to the lead solicitors. No contact was made with the lead solicitors requesting the addition of the ERM claimants to the group register, nor did ERM inform the lead solicitors that they had obtained relief from sanctions.
On 10 May 2019 the defendants wrote to ERM informing them of the absence of the ERM claimants on the group register and that therefore their claims had been automatically struck out. ERM only replied in June 2019. Their position was that the lead solicitors were at fault for failing to add their claimants to the group register despite having the necessary information (albeit in the wrong data format).
Another application for relief from sanctions was made on 4 July 2019 by ERM. The application was to be heard by Senior Master Fontaine. Her clerk sent an appointment form to the parties so that they could indicate their availability and time estimates for the application hearing. No response was received from ERM until January 2022, after a prompt from the court. No explanation was provided by ERM for this 2.5 year delay. It also transpired that ERM failed to serve copies of the application on either the defendants or the lead solicitors, who had to obtain a copy by writing to the Court in February 2022.
ERM’s July 2019 application sought relief from sanctions for strike out pursuant to their non-inclusion in the group register, and a declaration that the ERM claimants were deemed to be included in the group register as the necessary information had been provided to the lead solicitors pursuant to the 10 April 2018 order.
Senior Master Fontaine dismissed the application in its entirety. The judgment can be found here: Baker & Ors v Volkswagen Aktiengesellschaft & Ors (VW NOx Emissions Group Litigation)  EWHC 810 (QB) (07 April 2022)
They key lessons which emerge from the judgment are as follows.
Long delays are usually fatal to relief from sanction applications
ERM’s failure to list the application for 2.5 years was seen to be fatal by the Senior Master at , even in the absence of all of the other factors in this case.
Where such a long period of unexplained delay has occurred, it will almost always be futile for solicitors to make a relief from sanctions application. It will generally be wiser to avoid incurring the cost of such an application at all, even if that means accepting that a professional negligence claim will be forthcoming.
The pandemic is not a catch-all excuse for delay
One of the reasons proffered by ERM for the delay was the pandemic. The Senior Master described this explanation as “entirely inadequate” at .
Arguments about delay occasioned by the pandemic should be made with caution. One should check that the pandemic actually provides an explanation for the delay to which it is supposed to relate. In this case, it did not explain why an application made in July 2019 was not listed until 2022. There was ample time between the making of the application and the start of the pandemic in March 2020. Further, the fact that applications were being heard remotely throughout the pandemic meant that the pandemic failed to provide an excuse even in the absence of this delay.
Delays which give rise to improper tactical advantages will not attract relief from sanctions
At  the Senior Master pointed out that in the context of group litigation, claimants seeking to add themselves to the register late in the litigation process can gain an improper and unfair advantage over their co-claimants and the defendants. Claimants adding themselves to the litigation late in the process get the advantage of beneficial findings at case management hearings without having exposed themselves to a risk of an adverse finding. Similarly, they benefit from the selection process for representative claimants without risking that they themselves will be selected as a representative claimant.
These points are compelling and are unique to the group litigation context. They show the need to be alive to the peculiar procedural features of group litigation even when making typical applications.
The court expects claimant firms to cooperate in group litigation
Perhaps most significant aspect of the judgment is the part relating to the declaration. Senior Master Fontaine held that although the court order of April 2018 did not prescribe a specific data format for claimant data, the lead solicitors were entitled to require other claimant firms to provide claimant data in a particular format.
As a result, it was held that ERM had breached their obligation under the April 2018 order to provide data to the lead solicitors in the necessary format for inclusion in the group register. The Senior Master said at :
It is especially important in group litigation for parties to behave in a responsible and cooperative manner so that the litigation can progress in an orderly and proportionate way. This is one of the largest groups of claimants in any litigation there has been in this jurisdiction, to my knowledge, and it is necessary for all parties to behave in such a way as to enable the court to progress the litigation justly and efficiently.
This approach seems eminently sensible. Multi-firm group litigation needs to be conducted in an efficient manner, and it is reasonable to expect claimant firms to cooperate. If group litigation claimant firms were able to impose whatever data they wanted on the lead solicitor responsible for the group register, the task of populating group registers would become disproportionately slow and expensive, as work would effectively be inefficiently distributed to the lead claimant solicitor which ought to be carried out by other claimant solicitors.
As group litigation becomes more financially attractive, more claimant firms will naturally try to claim a piece of the action. The more claimant firms which have to coordinate in group litigation, the higher the chance of disagreement over matters such as data formats, and the higher the chance that claimants will be omitted from the group register as a result.
Defendants should welcome the approach taken by the Senior Master. It ultimately means that defendants are more likely to face claims from fewer individual claimants in group litigation, and that group litigation as a whole will be more efficient.
Benedict Morillo, Pupil Barrister