Commission Recovery Limited v Marks & Clerk LLP & Anor
[2023] EWHC 398 (Comm)
Wirral Council as administering authority of Merseyside Pension Fund v Indivior PLC
5 December 2023
[2023] EWHC 3114 (Comm)
High Court
A company sued two others for misleading investors. Instead of a regular lawsuit, they used a special type of lawsuit letting one person represent many investors. The judge said no, because this type of lawsuit would take away the judge's ability to control how the case is handled. A regular lawsuit is fairer because the judge gets to decide the best way to proceed.
Key Facts
- •Wirral Council brought representative proceedings against Indivior and Reckitt Benckiser under ss.90 and 90A and Schedule 10A of the Financial Services and Markets Act 2000 (FSMA) for alleged misleading statements related to the marketing of the drug Suboxone.
- •The claims allege a 'Scheme' to switch Suboxone from tablet to film form, hindering generic competition.
- •Defendants applied to strike out the representative proceedings, arguing they are inappropriate for FSMA claims.
- •The representative proceedings included both institutional and retail investors, with a costs-sharing agreement in place.
- •Multi-party proceedings with many of the same claimants were also issued but stayed pending this decision.
- •The case raises questions about the appropriate use of representative proceedings under CPR 19.8 in light of *Lloyd v Google* and the court's case management powers.
Legal Principles
Representative proceedings under CPR 19.8 are available where multiple persons have the same interest in a claim, but the court retains discretion to allow the claim to proceed.
CPR 19.8; *Lloyd v Google* [2022] AC 1217
The court's discretion under CPR 19.8 must be exercised to give effect to the overriding objective of dealing with cases justly and at proportionate cost.
CPR 1.2(a); *Lloyd v Google* [2022] AC 1217
In securities claims, the court actively manages cases, including deciding on split trials and the order in which issues are resolved.
CPR 1.4(2); *Manning & Napier v Tesco plc* [2017] EWHC 3296 (Ch); *Allianz Global Investors GmbH & Ors v RSA Insurance Group plc* [2021] EWHC 570 (Ch); *Various Claimants v G4S Limited* [2022] EWHC 1742 (Ch)
While *Lloyd v Google* suggests that a bifurcated process may be appropriate in representative actions, it does not preclude the court's case management powers.
*Lloyd v Google* [2022] AC 1217
The court must consider whether representative proceedings are the most appropriate procedure, considering alternative options like multi-party proceedings.
Overriding objective; *Lloyd v Google* [2022] AC 1217
Outcomes
The court allowed the defendants' applications to strike out the representative proceedings.
The representative proceedings would prevent the court from exercising its case management powers, potentially hindering a just and efficient resolution. The court found that the claimants' chosen method was not the best way to manage the case and potentially infringed on the court's inherent powers. The court also questioned whether the representative action was truly necessary given the existence of the multi-party proceedings.