Where next for mass “opt out” claims in England & Wales?

In the second of our series on the Supreme Court’s judgment in Lloyd v Google, we examine the key implications of the judgment on the future of representative actions in England & Wales. 

Mr Lloyd sought to sue Google on behalf of all iPhone users affected by the Safari workaround on the basis that they have the “same interest” in the case (in other words, the claims were identical in both legal nature and damages sought). He sought to overcome the problem of users having been affected to varying extents by claiming only baseline “loss of control” damages, which he argued were the same for everyone affected.

Although the Supreme Court endorsed previous authority that representative actions are “a flexible tool of convenience in the administration of justice” and could be “applied to the exigencies of modern life as occasion requires”, it did not accept Mr Lloyd’s argument that all affected iPhone users’ interests were at this fundamental level the same. Instead, the Court considered that an individual assessment of each user’s position would be required in order for a claim to be advanced on their behalf – so the representative action procedure was not appropriate. 

What does this mean for the future of such “opt out” actions in England & Wales?

1. Data privacy actions like Mr Lloyd’s (and several other pending claims) will be difficult to pursue. Although the Supreme Court speculated about other ways the claim could have proceeded if restructured, it is unclear whether these will be financially or practically feasible.
2. That said, the Supreme Court did suggest it will consider carefully formulated data privacy representative actions and there will be other attempts at such claims. Indeed, another representative action on behalf of 1.6 million people against Google and sister firm DeepMind began in the High Court in September. 
3. Representative actions also remain relevant in other areas (such as claims for mismanagement of common funds, product liability claims, and common insurance claims).
4. However, the risks of differing interests among the represented Claimants which will render the representative action procedure inappropriate will continue to be a limiting feature of these claims.
5. There are also other ways of bringing mass claims in England & Wales; principally, the group litigation order procedure and the buoyant opt out collective proceedings regime introduced by the Consumer Rights Act 2015. Last year’s landmark judgment in Merricks, has enabled a number of proposed class representatives to certify claims in opt out collective proceedings. Although available in the antitrust context only, collective proceedings have been brought across a wide-range of non-cartel issues from train fares to phone customers. 
6. It is noteworthy that Lords Leggatt and Sales (who refused Mr Lloyd’s claim) were the two dissenting judges who also would not have allowed Mr Merricks’ collective proceedings against Mastercard to continue. Drawing these judgments together, broader questions emerge: (i) whether or not the Courts in England and Wales consider that mass claims for limited ‘per head’ damages can accord with traditional English compensatory principles which require a claimant to prove their loss; and (ii) whether claimant interests are effectively advanced by ‘per head’ damages claims of this nature. There was a significant level of disagreement over this within the Merricks’ Supreme Court panel as well as between the High Court, Court of Appeal and Supreme Court in Mr Lloyd’s case.   

What gives the appearance of substance to the claim is the allegation that Google secretly tracked the internet activity of millions of Apple iPhone users for several months and used the data obtained for commercial purposes. But on analysis the claimant is seeking to recover damages without attempting to prove that this allegation is true in the case of any individual for whom damages are claimed. Without proof of some unlawful processing of an individual’s personal data beyond the bare minimum required to bring them within the definition of the represented class, a claim on behalf of that individual has no prospect of meeting the threshold for an award of damages.