High Court Rules Against Representative Action in Wirral Council v Indivior PLC Case, Emphasizing Procedural Fairness and Case Management

Introduction

In the case of Wirral Council as administering authority of Merseyside Pension Fund v Indivior PLC, the High Court was presented with a dispute over the appropriate procedure for pursuing claims under ss.90 and 90A and Schedule 10A of the Financial Services and Markets Act 2000 (FSMA). The central issue was whether the claimants could utilize the representative action mechanism under CPR 19.8 to bring forth claims focused on common issues, effectively bifurcating the proceedings and postponing the requirement to address individual claimant-side issues. The judgment delivered by Mr. Justice Michael Green provided critical insights into the discretionary nature of representative actions and the imperative of adhering to the overriding objective of dealing with cases justly and at proportionate cost.

Key Facts

Wirral Council initiated “Representative Proceedings” against Indivior PLC (and Reckitt Benckiser Group PLC in connected proceedings) seeking to represent investors who had suffered loss due to alleged misleading statements. These proceedings aimed to resolve common issues pertaining to the defendants while deferring individual investors’ specific concerns such as standing, reliance, causation, and quantum to a later stage, essentially bifurcating the trial process.

Wirral’s approach spawned debate over the appropriateness of representative actions in securities litigation under FSMA, including considerations of access to justice, litigation burden, and the preservation of the Court’s ability to case-manage effectively.

Legal Principals

The judgment elaborated on several critical legal principles:

Representative Proceedings under CPR 19.8

The Court analyzed the right to begin representative proceedings, acknowledging the entitlement “as of right” per CPR 19.8(1)(a), provided the “same interest” threshold is satisfied. However, that did not interfere with the Court’s discretionary power under CPR 19.8(2) and (3) to determine the continuation based on the overriding objective.

Bifurcation and Case Management

The permissibility of bifurcation as a procedural tool in representative actions was considered, with reference to Lloyd v Google LLC, where the Supreme Court contemplated bifurcation in representative actions. However, the Court in the present case distinguished that bifurcation was not an objective in itself but a means to resolve issues where individual actions would be impracticable. It underscored that allowing bifurcation through representative actions should not impede the Court’s case management capabilities.

Access to Justice

The judgment considered the importance of access to justice, particularly for retail investors who may struggle with the financial barriers of litigation. However, the Court was mindful that such considerations must not unfairly prejudice the defendants or undermine the overriding objective.

Overriding Objective

Throughout the analysis, the Court remained steadfast that any exercise of its discretion must further the overriding objective, which encompassed ensuring fairness, proportionality, expediency, and proper resource allocation.

Outcomes

Mr. Justice Michael Green ordered that Wirral could not act as a representative under CPR 19.8(2), leading to the striking out of the Claim Forms and Particulars of Claim in the Representative Proceedings. The judgment favored the more conventional Multi-party Proceedings, which permitted comprehensive case management and did not a priori restrict the Court’s ability to oversee the procedural aspects, including issues of reliance and causation.

Conclusion

The High Court’s decision in Wirral Council v Indivior PLC reinforces the principle that the flexibility allowed by representative actions under CPR 19.8 must harmonize with the overriding objective encompassing fairness, proportionate cost, and overall just case management. The ruling asserts the judiciary’s prerogative in determining the procedural path of legal actions and challenges the notion of employing representative proceedings predominantly to bypass the Court’s case management and to mitigate claimants’ costs and risks. This case sets a precedent that while representative actions offer a promising avenue for redressing collective interests, their deployment must not compromise the integrity and the Court’s ability to administer justice effectively.