The recent judgment in Lancaster and others v Peacock QC is an interesting decision which provided rare guidance on the procedure for choosing sample claimants in group litigation.
Judgment was given by Fancourt J and Master Kay, who heard the application on 28 April 2020. The source litigation for both cases related to tax mitigation schemes, known as film finance tax deferment schemes, entered into by the claimants, who were advised by the two separate defendants.
In the first claim, brought against Jonathan Peacock QC, there were 123 claimants (the Peacock claim), and in the second claim, against Canaccord Genuity Financial Planning Limited CMC, there were 33 claimants (the Canaccord claim).
The judges were very clear, at paragraph 2 of their judgment, as to the purpose of selecting sample claimants in group litigation:
“First, to ensure that issues that are common to all the claimants’ claims can be decided in such a way as to bind them all; and, second, to decide other factual and legal issues where the decision will not necessarily bind other claimants but is likely to give a very clear indication of the way that their cases too will be decided if tried, with the expected consequence that the parties will then be able to settle the remaining claims.”
It had been agreed by all parties that the two cases should be case managed together. This was because the claims were concerned with the same film finance deferment scheme. There were two rival proposals as to how the process of selecting sample claimants should take place.
The first proposal, made by the claimants, was as follows:
- The 123 claimants in the Peacock litigation should be sent a questionnaire relating to their claims.
- Once the answers to those questions were collected in, it was intended that the parties should be able to select initial sample claimants from the 123 claimants.
- Those initial sample claimants would then be required to search for and produce certain documents relating to the answers to the questions that they have given. This was not seen to be an exercise in initial disclosure, but rather to facilitate a final selection of sample claimants.
- Once the initial sample claimants had disclosed their documents, it was suggested that a final selection of sample claimants would be made by each of the parties.
The second proposal, made on behalf of Jonathan Peacock QC, was as follows:
- The 123 claimants should answer the questionnaire and produce the relevant documents at the same time.
- Following this, the final selection of sample claimants could be made.
Jonathan Peacock QC’s rationale for this was that the method proposed by the claimants would be too slow and costly. His proposal cut out a number of intermediate steps, and the final selection process would have been completed by 17 July 2020, whereas the selection under the claimants’ proposal would take until 16 October 2020.
Decision
The judges thought it would be better to accept the claimants’ proposal for selecting sample claimants. The reason for this was, first, that the COVID-19 pandemic would have adversely affected a number of the claimants, and it may have complicated the disclosure exercise considered by Jonathan Peacock QC. Secondly, there were concerns about legal professional privilege, and that each claimant might have required individual advice on the subject. This would have been a substantial burden on the claimants, if issues of that kind had to be considered at the same time as answering the initial questionnaire.
The judges did suggest, however, that a larger number of initial sample claimants should be used, and they suggested that the work would be carried out in a much quicker timescale than October 2020. The judges gave a final selection date for those candidates for 18 September 2020.
Commentary
This is a very useful case, and the judges have clearly considered both the effects that the claimants would encounter when answering questions, and the importance of balancing the needs of both parties. It is clear that the judges were dissatisfied with the length of time that the claimants had initially suggested for their timetable for selecting sample claimants, but balanced this against the fact that legal professional privilege could be affected if Mr Peacock QC’s quicker method of selecting sample claimants had been followed.
This is an interesting case where the court has case managed the initial parts of the claim in a very measured way, not only considering litigation as a whole but also the current COVID-19 pandemic, and the effect that it has had on people generally.
