A Class Act: Communications in collective actions

With class actions gaining real momentum in England and Wales, the approach to both claimant and defendant-side communications should be sharply attuned to how these cases are perceived by the legal community and society at large. In anticipation of the Lloyd v Google judgement, DRD Partner Lawrence Dore and Analyst Viktor Koleda look at the implications of recent and potential developments in the world of class actions from the communications perspective.

Watershed moment

While class actions are heating up all over Europe – with a 120% increase between 2018 and 2020 – more than a half of collective European lawsuits over the last five years were filed in the UK, according to this month’s research from CMS Law. The momentum behind class actions is undeniable, with unprecedented volumes of funding available to UK claimants.

Opt-out collective claims – where everyone in a defined group is by default a member of the class unless they explicitly withdraw – are a particularly likely area of prospective growth in England and Wales. The Supreme Court will imminently be handing down judgment in Lloyd v Google, the first opt-out data protection case in the UK, which could become a watershed moment.

The focus is on whether a representative can bring a claim on behalf of millions of people for Google’s loss of control over their data, instead of considering how individual claimants suffered harm.

Major claims against Facebook, TikTok, Youtube, Salesforce and Oracle are waiting in the wings for the outcome of that hearing. Success for Mr. Lloyd could open the floodgates for privacy class actions, even without a statutory regime in place. At the heart of the matter lies the importation of an American practice into an English court case – a crucial dynamic from the comms perspective.

Challenging connotations

When a new form of legal action enters a jurisdiction, first impressions count.

Opt-out claims have entered the UK’s public discourse as “US-style” class actions, and any collective proceedings happening this year will inevitably be set against this backdrop.

Looking back at last December, we can clearly see how the Supreme Court ruling on Mastercard provoked another round of debate in national publications. Writing in the Telegraph, Harold Kim expressed hopes that the Competition Appeal Tribunal (CAT) “can still find a way to prevent the dam from bursting and flooding the UK with US-style actions”. The FT, on the other hand, published an editorial entitled “There is a place for class action lawsuits in the UK.”

From the defendants’ perspective, the appeal of such a narrative is clear. Parallels with the other side of the pond highlight the commercial interest of legal firms in maintaining the current class actions regime.

The rhetoric of law firms seeking commercial gain by trawling through regulators’ rulings in search for the coveted potential claim can be effectively used to divert the attention away from the missteps of large corporates. International examples provide fertile ground for such discourse, from minuscule payouts received by individual claimants, to “beauty parades” of “hit and hope” law firms that bring competing claims.

Stepping up your comms game

However, such reasoning is unlikely to be convincing to the public when real harm to large numbers of consumers or small businesses is demonstrated.

The Supreme Court decided that the CAT’s doubts about the “abstract” suitability of a case and its substantive merits should not be a “hurdle” to certification, if the claim is suitable “in a relative sense”, and appropriate for collective proceedings.

Defendants will no longer be able to argue that a case should not be certified by the CAT just because the claimants failed to provide a convincing calculation of how individual compensation will be awarded. In the absence of such a mechanism for dismissal, large corporate entities will have to step up their comms game to challenge accusations against them.

The removal of certification barriers for opt-out claims also necessitates a different approach to comms on the claimants’ side. When affected individuals are automatically included in the class, the emphasis on bookbuilding stops being the main objective of claimants’ PR activity.

Instead of encouraging a specific group of people to register, the task of comms teams working on opt-out claims is to demonstrate their long-term consumer benefits and to make the argument that the case is worth the court’s time and resources. Both of these goals, unfortunately, are made more difficult by the salience of unfavourable comparisons with American class actions.

Therefore, the key challenge for a claimants’ communications campaign is to not allow broad discussions and international comparisons to overpower the message that legal action in a given case is the right thing to do and that specific laws have been created to allow such actions to happen.

One implication of this challenge is a corresponding shift in the importance of digital channels. When we work with opt-in class actions, a major chunk of back-end communications activity revolves around mobilising potential victims through social media and dedicated websites.

Our recent experience with opt-out claims revealed that coverage in tier-one publications can be a lot more valuable than digital engagement, since it offers the client team a chance to contribute their expertise to national debates around collective redress, consumer rights or competitive behaviour.

Making their voices heard in the public discourse can bring the public attention to the injustice and harms at hand, as opposed to how much the lawyers stand to earn from their work.

The defendants, on the other hand, face the job of minimising the impact of such voices. For a defendant who, for example, lost control of its customers’ data, the renewed media interest a representative action brings is also unwanted, highlighting a business failing and raising the prospect of further compensation payouts some years after a regulatory fine.

Follow the money

The role of litigation funding is another aspect of representative actions that brings some criticism and requires explaining. Certainly, litigation funders are commercial organisations and exist to make a profit – we see no need to hide this fact and transparency is preferable to coyness or opaque statements.

But the central message is a strong one – without third party funding, it is nearly impossible for an individual to seek compensation from a large corporate. This individual has rights, has suffered wrong-doing and, through the collective action route, can and should be compensated if the case is valid.

A poor claim won’t succeed, and is indeed unlikely to be funded, so the argument that funders will overwhelm the courts with ambulance chasing claims is ill-founded. Funding allows justice to take place.

Ultimately, a class action will stand or fall on the strength of the case. But an effective communications campaign is critical throughout the process. A class representative may be passionate about the issue, but will frequently require preparation before facing the media.

Affected individuals need to be able to find simple information about whether they are affected and what happens next – this needs to be on websites and in the press.

As a case approaches court, especially if the defendant is a household name, media and stakeholders need to be updated – not with hyperbole but facts.

And should the claim succeed, affected individuals need to be informed, directed to relevant websites and encouraged to claim what they are owed.

Photo credit: Rightly

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