Hansard

At stage 2, the Justice Committee voted by majority to support amendments to section 17 that were lodged by Liam McArthur, which had the bill specify that group proceedings should be either opt-in or opt-out proceedings. The intention was that the type of proceedings that would be used in each particular case would be specified by the court.

As I have previously said, the Scottish Government has no financial or political objections to opt-out proceedings. Rather, we wish to flag up concerns arising from the obligation implied by Liam McArthur’s amendments at stage 2, on the Scottish Civil Justice Council to draft and consult on rules for opt-in and opt-out procedures simultaneously, which risks delaying the introduction of group proceedings in Scotland, per se.

Lord Gill’s Scottish civil courts review drew attention to the fact that opt-out procedure might be appropriate in a consumer case in which a large number of consumers are affected, but it also noted that where the potential class membership might be small and easily identifiable, opt-in procedure is likely to be much more appropriate, in order that only those who make a positive choice to opt-in are bound by the outcome.

During stage 1, the Justice Committee heard, from a number of those who submitted evidence, about the possible benefits of opt-in procedure for community groups. We would not wish small groups to be denied the advantages of opt-in group proceedings while opt-out rules are drawn up that might be more appropriate for larger-scale consumer actions.

Our concerns are shared by the Lord President, who wrote to the Justice Committee prior to stage 2 to ensure that members were aware of the complexities of the opt-out procedure. He noted that the practical and legal challenges that could be presented by an opt-out model are significantly greater than those that could be presented by an opt-in model.

My amendments in group 8 would permit the Scottish Civil Justice Council to develop separately the rules for the opt-in and opt-out procedures, while not preventing it from developing those rules concurrently. In other words, the Scottish Civil Justice Council will decide how best to timetable drafting of the rules. Indeed, it would be open to the SCJC, as the independent rule-making body, to decide to proceed with opt-out rules first. However, the key issue is that it is the Scottish Civil Justice Council that will determine its own programme of work. It is clear, therefore, that there will be a duty on it to provide rules for both procedures.

The Scottish civil courts review noted that it would be necessary to amend the legislation relating to prescription and limitation in order to take account of a group litigation procedure that permits opt-out. It also pointed out that it would be necessary to confer powers on the court to make an aggregate, or global, award of damages, and for the disposal of any undistributed residue of an aggregate award.

Opt-out would also give rise to new issues of general principle in that, for the first time in Scots law, individuals could become party to litigation without their consent, and possibly without their knowledge.

In the face of all those issues, if the Scottish Civil Justice Council is obliged to produce rules on opt-out at the same time as it produces rules on opt-in, because of the extra complexities that are involved with opt-out, that will risk delaying the introduction of any kind of group proceedings.

The SCJC is an independent body that is headed by the Lord President of the Court of Session. Although the Scottish Government cannot dictate its work programme or the timing of production of its rules, it has already made the public commitment that implementation of the bill will be one of its priorities for 2018-19.

We expect that the SCJC will set up a working group to consider rules on group procedure, as it did on fatal accident inquiries, and that representatives of consumer bodies will be represented on that body.

It is worth noting that the Scottish Law Commission has previously produced a draft act of sederunt on opt-in proceedings, so it is to be hoped that the SCJC will be able to produce rules on opt-in relatively quickly, thereby enabling it to move on without delay to the more complex issue of opt-out proceedings.

I have spoken to Liam McArthur about the need for expeditious progress to be made on group procedure, and I can give him the assurance that the Scottish Government will use all levers of influence to support the most expeditious introduction of group procedure.

I turn to the detail of the amendments. Proposed replacement section 17(7A), which amendment 21 seeks to introduce, will allow the Court of Session to make rules that provide for group proceedings to be brought as opt-in proceedings, opt-out proceedings or either. The intention is to give the court the flexibility to provide for all proceedings to be opt-in proceedings, or for there to be a choice, but also for the court to be able to make different provision for different purposes.

Proposed replacement section 17(7B) seeks to define “opt-in proceedings” and “opt-out proceedings”. Opt-out proceedings are defined as group proceedings in which all persons within the group description who are domiciled in Scotland are automatically opted in and therefore must opt out to leave the group. However, persons who are domiciled outside Scotland must opt in. That is because one of the difficulties that the Lord President identified in relation to opt-out is the potential extraterritorial effect of orders that are granted in opt-out proceedings, particularly when a deemed member of a group would otherwise have had the option of raising proceedings in a different legal jurisdiction.

The Government’s amendments seek to address that concern. In doing so, they draw on the UK Competition Appeal Tribunal provisions in the Competition Act 1998. The consumer organisation Which? has been highly supportive of the group proceedings provisions and has helpfully noted that that is a relevant precedent.

Proposed new section 17(7B) is a replacement for sections 17(3), 17(3A), and 17(3B) in the bill as amended at stage 2, which will be removed by consequential amendment 17, but care has been taken in the drafting of the replacement provisions to carry across the relevant wording that was introduced by Liam McArthur at stage 2.

Proposed new subsection 17(7B)(b) provides for the court to specify a description of the claims that are eligible to be brought in opt-out proceedings, and because that is not relevant to opt-in proceedings, amendment 18 seeks to remove section 17(6A). That does not alter the effect of that subsection, other than to restrict its application to opt-out proceedings.

Section 17(7)(aa), which was inserted at stage 2, places a duty on members of the group as a whole to identify and notify all potential group members. We consider it inappropriate that that duty would be placed on all members of the group, with the possible cost and delay that would be involved, so amendment 19 will place the duty to identify group members on the representative party only. In practice, the Government expects that the law firm supporting the representative party would carry out the necessary administrative work.

Amendment 20 will simply add some words of clarification to the end of section 17(7)(aa). Amendment 22 will add to the illustrative list in section 18(2) of things that the Court of Session may include in group procedure rules. The additions are rules about how a person may give consent for their claim to be brought in opt-in group proceedings, and how a person may give notice that they do not consent to their claim being brought in opt-out group proceedings. In other words, they deal with how people are to opt in or opt out, as appropriate.