London law firm Harcus Sinclair has been forced to withdraw from the massive VW emissions group action it was helping to co-ordinate because of a breach of a non-disclosure agreement it signed before the case began.
The High Court ruled yesterday that the firm had agreed with Chesterfield firm Your Lawyers not to represent any claimants in the litigation other than those represented by Your Lawyers after it approached Harcus Sinclair to help with running its group in April 2016.
No agreement was ultimately reached and Harcus eventually joined forces with Slater & Gordon to organise a group that now consists of nearly 45,000 VW, Seat, Škoda and Audi car owners, making it one of the largest group actions ever.
Slater & Gordon has now assumed sole control of the group. Several other firms are putting together their own groups.
Your Lawyers, which said it was the first firm in England and Wales to issue proceedings against VW, reported that Mr Edwin Johnson QC, sitting as a deputy High Court judge, found the relevant term in the agreement to be a solicitor’s undertaking.
The judge held that he needed to debar Harcus Sinclair from participating in the litigation in order to ensure that solicitors adhered to promises they made and to prevent any further delays in the litigation.
Aman Johal of Your Lawyers said: “We have been fighting for justice on behalf of VW owners ever since September 2015. I never expected that I would have to fight another firm of solicitors before I fought VW.
“I have had to do so in order to ensure that the professional standards of solicitors are upheld and that my clients are protected. I now look forward to leading the battle for compensation against VW.”
He added that Harcus Sinclair would now have to pay Your Lawyers’ costs and damages, “which will likely run into the millions of pounds”.
A spokeswoman for VWemissionsaction – the action group Harcus Sinclair had been running – said the firm was “disappointed” with the ruling and intended to appeal.
She stressed that from the perspective of the claimants and their litigation funder – Therium Capital Management – there was no change in how the case was progressing. A directions hearing is due on Monday week.
The action group and Slater & Gordon are urging more drivers to come forward – they said more than a million affect car-owners have yet to join the action.
David Strawson, chairman of the UK VW emissions action committee, said: “This is a call to action. Taking legal action is the only way that UK consumers can seek redress and help to ensure that companies aren’t able to get away with this sort of behavior.
“We need to hold VW accountable for the damage to the environment and to our health caused by the high levels of pollution produced by these cars, and the deceit perpetrated on us their customers.
“The more of us who join the legal action, the more pressure we can put on VW to try and make things right.”
Harcus Sinclair has experience of group actions and is acting in the ongoing case brought by Lloyds shareholders against Lloyds Banking Group and some of its former directors alleging breach of duty when advising them that the acquisition of HBOS in 2009 was in their best interests.
Meanwhile, London firm Collyer Bristow has become the latest firm to enter the scramble for claimants to join a group action against truck manufacturers found guilty of illegal price fixing.
It has secured backing for litigation funder Vannin Capital along with after-the-event insurance.
Earlier this year, the Road Haulage Association started building its group – together with specialist transport law firm Backhouse Jones and backed by Therium – as did US class action law firm Hausfeld after striking a deal with litigation funder Burford Capital.
Stephen Critchley, head of competition law at Collyer Bristow, said: “Firms that acquired new medium or heavy-duty trucks between 1997 and 2011 almost certainly have a case for compensation, whether they bought the trucks outright, on hire purchase or leased them directly from a manufacturer or from a supplier.
“Other firms which do not operate their own truck fleet but outsource their transportation needs to third-party hauliers could also be entitled to make a claim.
“As well as fixing prices, the truck cartel conspired on the timing of new emissions technologies, so it is possible that fleet owners and users incurred extra running costs, too. The compensation claims could run to billions of pounds.”