Data and privacy class action claims are likely to expand in future, with firms and litigation funders attracted by the prospect of lucrative returns driving the industry, according to a senior City disputes lawyer.
Gregg Rowan, a partner at global firm Herbert Smith Freehills’(HSF) London office, specialises in complex commercial disputes.
He made the assessment in a podcast by his firm, entitled Class actions in England and Wales: an increasing threat to corporates? to mark the publication of a practical guide to bringing and defending class actions.
Mr Rowan said there had been several “very high-profile claims” recently relating to shareholder and competition claims, adding that there were “various factors that I think are likely to lead to further claims in future”.
He continued: “One obvious area is the activity and interest on the part of the claimant firms and litigation funders who see this whole area is really attractive and potentially very lucrative for them.
“Also, the very fact of having some of these high-profile claims tends to attract greater interest and these things tend to build a head of steam, and I think that’s what we’re seeing now.”
Data and privacy claims was a likely area of growth, he said: “We are all now a lot more conscious of data and privacy issues than ever before.
“We’ve had recently the GDPR and there are data breaches happening and reported in the press….
“There is lots of activity in this area and real potential for claims to be brought on a group basis.”
He observed that the new opt-out class actions in the Competition Appeal Tribunal had only led to three claims so far, two of which had fallen at the certification hurdle, although there was currently an appeal pending in one – against giant credit provider Mastercard.
But while it had been “a fairly slow start for the new procedure”, he said “it is expected that more claims will come forward soon so it’s really an area to watch”.
Damian Grave, a commercial litigator and disputes partner in the firm’s Melbourne office, agreed on the drivers for group actions, saying it had also been the experience in Australia:
“Claimant firms and litigation funders have really driven a growth in class actions, particularly shareholder actions, but also other claims such as those related to product liability and, in more recent times, environmental claims…
“We’ve seen the involvement of litigation funders particularly… in securities class actions has led at least initially to the use of closed classes, where the class is limited to those who have signed up to an agreement with the litigation funder, so it’s effectively an opt-in claim.”
Mr Grave added that “class action tourism” – where claimants who are resident outside of England and Wales bring claims in the English courts against the UK-domiciled parent company – could expand depending on the ruling of the Supreme Court early next year on the jurisdiction aspects of these claims.