The Court of Appeal has cleared the way for a £3bn representative action against Google for misuse of private data, after overturning the High Court’s decision to block it.
The decision boosts the use of representative actions in claims such as these, where the court said there was no other practical way of pursuing them.
The ‘Google You Owe Us’ action alleges that, over some months in 2011-2012, Google acted in breach of duty under the Data Protection Act 1998 (DPA) by secretly tracking the internet activity of Apple iPhone users, collating and using that data, and then selling it all on.
No financial loss or distress is alleged. The claim is for a standard award – potentially of around £750 – for each of the estimated 4.4m members of the class, to reflect the infringement of the right, the commission of the wrong, and loss of control over personal data.
The estimated bill for Google if it loses is between £1bn and £3bn.
However, in October 2018, Mr Justice Warby ruled against granting permission to serve proceedings on the internet giant in the US because there was not a reasonable prospect of the claim succeeding.
He said the particulars of claim did not support the contention that the representative claimant – Richard Lloyd, the former executive director of Which? – or any of those he represented suffered “damage” within the meaning of DPA: contravention of the Act on its own was not enough.
However, the Court of Appeal disagreed. Giving the unanimous ruling, Sir Geoffrey Vos, Chancellor of the High Court, said damages were in principle capable of being awarded for loss of control of data under article 23 and section 13 of the DPA, even if there was no pecuniary loss and no distress.
“The words in section 13 ‘[an] individual who suffers damage by reason of [a breach] is entitled to compensation’ justify such an interpretation,” he said.
Only by construing the legislation in this way could individuals be provided with an effective remedy for the infringement of such rights, he added.
He also found Warby J was wrong to say the court would in any case refuse to allow the claim to continue as a representative action because members of the class did not have the “same interest”, as required by the CPR – the nature and extent of the breach and the impact it had on individual class members would have varied greatly – and/or because it was impossible reliably to ascertain the members of the represented class.
Vos LJ said: “In my judgment, the only applicable test is that ‘it must be possible to say of any particular person whether or not they qualify for membership of the represented class of persons by virtue of having’ the same interest as Mr Lloyd ‘[a]t all stages of the proceedings, and not just at the date of judgment’.
“I cannot see why that test is not satisfied here. Every affected person will, in theory, know whether he satisfies the conditions that Mr Lloyd has specified. Also, the data in possession of Google will be able to identify who is, and who is not, in the class.”
Warby J said he would have exercised his discretion against allowing the claim to continue whatever he had decided on those issues.
Vos LJ ruled: “That may well be the case, but I think it would be hard for the detached observer to accept that he was not, in any way, influenced in the exercise of his discretion by what he had decided on the first two issues.”
Among the factors Warby J took into account were his view that the main beneficiaries of the claim would be the funders and the lawyers, and that the litigation would generate significant costs while the amount recovered by each class member would be modest.
Vos LJ said the judge “might have been better to invite argument” on these two issues, but “he was justified in taking them into account”.
But he was wrong to consider the inability to identify the members of the class, and that the members of the class had not authorised the claim. These were “irrelevant to his discretion”, Vos LJ said, as well as the first one being wrong and the second one not required.
Exercising the discretion afresh, the Chancellor said: “As the judge himself said, this representative action is in practice the only way in which these claims can be pursued.
“I do not accept the judge’s characterisation of this claim as ‘officious litigation’. To the contrary, this case, quite properly if the allegations are proved, seeks to call Google to account for its allegedly wholesale and deliberate misuse of personal data without consent, undertaken with a view to commercial profit.
“It is not disproportionate to pursue such litigation in circumstances where, as was common ground, there will, if the judge were upheld, be no other remedy.
“The case may be costly and may use valuable court resources, but it will ensure that there is a civil compensatory remedy for what appear, at first sight, to be clear, repeated and widespread breaches of Google’s data processing obligations and violations of the [European Convention on Human Rights] and the Charter [of Fundamental Rights].”
He concluded that it was a claim which, as a matter of discretion, should be allowed to proceed.
Mr Lloyd said: “The judgment sends a very clear message to Google and other large tech companies: you are not above the law. Google can be held to account in this country for misusing peoples’ personal data, and groups of consumers can together ask the courts for redress when firms profit unlawfully from ‘repeated and widespread’ violations of our data protection rights. We will take this fight against Google all the way.”
His solicitor, James Oldnall, a partner at London firm Mishcon de Reya, said: “Today’s decision is significant not only for the millions of consumers affected by Google’s activity but also for the collective action landscape more broadly.
“The Court of Appeal has confirmed our view that representative actions are essential for holding corporate giants to account.”
Warby J’s judgment revealed that Therium Capital Management was providing funding in three tranches totalling £15.5m, and there was after-the-event insurance to cover adverse costs of up to £12m.