BRINGING A REPRESENTATIVE ACTION WAS A FLIGHT OF FANCY: ACTION ON BEHALF OF NUMEROUS PASSENGERS STRUCK OUT

In Smyth v British Airways Plc & Anor [2024] EWHC 2173 (KB) Master Davison struck out an action which claimed to be a “representative action” on behalf of thousands  (if not millions) of airline passengers.   The judge was sceptical about the claimant’s motives for bringing the action (since it involved the claimant receiving over £70 million. In any event the action did not come within the definition of “representative action”. Further, as a matter of discretion, the judge would not have allowed it to proceed.

“The discretion whether to allow the claim to proceed as a representative action is exercised in accordance with the Overriding Objective to deal with cases justly and at proportionate cost. One consideration is whether allowing a representative action to go forward would promote access to justice. It is hard to see how these aims would be served by this action when the represented parties have an alternative remedy which is easily accessed at no cost at all”

THE CASE

The claimant was due to fly from Gatwick to Nice on a flight in June 2022. That flight was cancelled with less than 7 days notice. The claimant was entitled to compensation of £220.   The airline, British Airways,  maintain an online portal by which a claim can be made.  The claimant did not claim via the portal but brought a representative action.

THE ACTION

The claimant issued proceedings on behalf of all passengers who had been subject to delay or cancellation of more than three hours between 2016 and 2022.

THE FUNDING OF THE ACTION

The action was being funded by the claimant’s employer.   An order had been obtained, on a without notice basis, declaring that the claimant was entitled to 24% of the proceeds of the litigation.

“A feature of the claim is that it is funded by a Mr John Armour, an Australian citizen who is a resident of Monaco and who is Ms Smyth’s employer. The exact funding arrangements have not been disclosed and this is a topic that I will have to return to. But on 24 May 2024, Ms Smyth obtained an order from Master Pester in the Chancery Division of the High Court on a without notice basis whereby it was declared that she would be entitled to deduct “an aggregate sum equivalent to 24% of any compensation recovered by her on behalf of the Represented Persons” in this action. The order was based upon trust law principles permitting remuneration out of trust assets for work done in relation to those assets. It did not, as I understand it, approve the funding arrangements as such, nor did it sanction the claimant as an appropriate person to act in a representative capacity. The material upon which the 24% percentage was approved has not been disclosed. It appears from the face of the order that the percentage comprises two elements: (1) a funder’s fee payable to Mr Armour and (2) fees payable to her legal representatives. The proportions in and/or the contingencies upon which the percentage is to be split are unknown. But simple arithmetic, based upon the estimates set out above, suggests that there would be a sum in excess of £70 million available for payment to what might loosely be called the claimant’s “team” – again, a topic to which I will have to return.”

THE DEFENDANTS’ APPLICATION

The defendants applied to strike out the action.  That application was successful.

1. 1. This claim raises some novel and interesting points about the permissible scope of a representative action under CPR rule 19.8. It arises in the following way. The claimant, Ms Claire Smyth, was booked on a British Airways flight scheduled to fly from London Gatwick to Nice at 1740 on 18 June 2022. On 14 June (less than 7 days before departure) the flight was cancelled. The cancellation gave rise to a right on the part of the claimant to claim compensation under Article 7(1) of EU Regulation 261/2004. This Regulation (which was retained post-Brexit) establishes, under specified conditions, minimum rights for passengers when: (a) they are denied boarding against their will; (b) their flight is cancelled; or (c) their flight is delayed. For short-haul flights of less than 1,500 kms (such as the one the claimant was booked on) the level of compensation was €250 and, post-Brexit, is now £220.

1. 1. The defendants to the claim, British Airways and easyJet, both maintain portals through which passengers may claim the compensation, free of charge. Ms Smyth did not utilise that method. Instead, on 2 August 2022, direct access counsel, Mr Hugh Preston KC (who has acted for the claimant throughout) wrote a letter before action on behalf of a very large class whose members were, in summary, those who had booked a flight with BA or easyJet scheduled to depart from, or arrive at, an airport in the UK during the period from 1 December 2016 to 31 August 2022 and whose flight was then either cancelled or delayed by three hours or more. (I will have to return to the precise delineation of the class as it was first framed in this letter. For present purposes, suffice it to say that it was intended to include, and only include, those passengers who had an indisputable right to compensation.) For reasons that are not clear to me, the letter did not identify Ms Smyth as the representative. She was not identified until 5 months later. The letter of 2 August 2022 referred to a schedule of flights believed to fall within the relevant criteria, which would be served in due course and which would be adjusted as necessary in order to eliminate cases in which there was, or there came to be recognised, an arguable defence. The stated purpose of the claim was to recover compensation where that was legally due but had not been paid, “for example because the customers have not been made aware of their right to claim compensation”. An important element of the claimant’s case is that there is low awareness of the passenger rights conferred by the Regulation and that airlines, including BA and easyJet, do the bare minimum to inform passengers of their rights and to allow those rights to be satisfied. The claimant’s position is that this claim will, effectively, force BA and easyJet to take a proactive stance and to pay the compensation in all cases where it is indisputably due.

1. 1. The schedule was served with the Part 8 Claim Form, which was issued on 10 January 2023. The schedule contained approximately 116,000 flights. Various estimates can be made as to the scale of the claim. For the purposes of the hearing, the rough and ready estimate offered by Mr Bear KC for easyJet was as follows. Assuming approximately 200 passengers per flight (i.e. 23.2 million passengers) and on the further assumptions that 25% of the flights were indisputably compensable and that 25% of passengers had not already been compensated, then the claim would be worth £319 million. The assumptions might prove to be inaccurate one way or another. But on any view, the claim, if properly constituted as a representative action, will be a very large one.

1. 1. A feature of the claim is that it is funded by a Mr John Armour, an Australian citizen who is a resident of Monaco and who is Ms Smyth’s employer. The exact funding arrangements have not been disclosed and this is a topic that I will have to return to. But on 24 May 2024, Ms Smyth obtained an order from Master Pester in the Chancery Division of the High Court on a without notice basis whereby it was declared that she would be entitled to deduct “an aggregate sum equivalent to 24% of any compensation recovered by her on behalf of the Represented Persons” in this action. The order was based upon trust law principles permitting remuneration out of trust assets for work done in relation to those assets. It did not, as I understand it, approve the funding arrangements as such, nor did it sanction the claimant as an appropriate person to act in a representative capacity. The material upon which the 24% percentage was approved has not been disclosed. It appears from the face of the order that the percentage comprises two elements: (1) a funder’s fee payable to Mr Armour and (2) fees payable to her legal representatives. The proportions in and/or the contingencies upon which the percentage is to be split are unknown. But simple arithmetic, based upon the estimates set out above, suggests that there would be a sum in excess of £70 million available for payment to what might loosely be called the claimant’s “team” – again, a topic to which I will have to return.

1. The defendants strongly oppose the constitution of the claim as a representative action and seek an order striking it out and/or an order under CPR rule 19.8(2) directing that the claimant “may not act as a representative”.

THE “CLASS OF PERSONS”

The judge considered the class of persons.

1. 1. As originally proposed in Mr Preston KC’s pre-action protocol letter, the class comprised passengers on flights where the cancellation or delay was not by reason of extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken (the Article 5(3) defence). But by the time the claim form was issued, the accompanying schedule contained all disrupted flights, i.e. it included those where an extraordinary circumstances defence might indeed arise. The claim form was then amended (though, as yet, without permission) so as to exclude from the class four categories of passenger who, by reason of either having already made a claim which had been satisfied or of being in an excepted category, had no prima facie claim. A further proposed amendment was to add a second claimant, Ms Stella English. This was done in order to address an objection (one of many) made by easyJet that Ms Smyth, whose flight was a BA flight, could not represent passengers on easyJet flights. Ms English had taken an easyJet flight. As set out in the Amended Claim Form, the class was this:

“The First Claimant claims in her capacity as representative under CPR 19.8 (1) of each person who had duly presented themselves for check-in for any of the British Airways flights listed in the schedule referred to in the attached witness statement and identified therein as having been delayed, or who had a confirmed reservation to fly on any of the British Airways flights listed in the said schedule and identified therein as having been cancelled (save for any such flights in respect of which that person’s presentation for check in or confirmed reservation was for an Excluded Journey as defined below), and who was not on the date of issue of these proceedings a Master or a Judge of the King’s Bench Division of the High Court of England and Wales or a Judge of the Court of Appeal, or a Justice of the Supreme Court.

The Second Claimant claims [wording as above mutatis mutandis for easyJet flights].

Fixed compensation is claimed by the First and Second Claimants respectively on behalf of each such person in the fixed sum specified in the said schedule in respect of each such flight together with interest thereon pursuant to section 35A of the Senior Courts Act 1981 at such rate and for such period as the court thinks fit.

1. 1. This is addressed at section 6 of Ms Smyth’s second witness statement. At paragraph 115 she has described her motivation which she says “stems from a strong desire to stand up for the wronged consumer let down by large corporations”. She has expressed the hope that she will, by this claim, “bring to light passengers’ rights but also encourage British Airways, easyJet and other airlines to adopt a more transparent and respectful approach to communicating with their passengers”. She has described her relationship with Mr Armour, the funder of this claim, namely that she was employed by him to set up and run a small family office in London, carrying out personal administration and supporting him in various business activities. She has asserted her independence in the conduct of the litigation. Relevant to this is the consultative panel which she has assembled consisting of John Swift KC, a distinguished competition lawyer, and Keith Richards OBE, whose qualifications I have already recited. She has reserved her position on the issue of her personal remuneration.

 

1. As to the funding arrangements, Ms Smyth has confirmed that she is indemnified by Mr Armour in respect of adverse costs orders (and he has, indeed, provided security for the defendants’ costs in the full sums demanded (over £800,000)). She has not disclosed details of the funding agreement. But the overall percentage deduction from the proceeds of the claim is now a matter of record. She has given no information as to what I might call the genesis of the claim. In particular, she has not described the process (and there must have been one) by which her cancelled flight and the personal motivation and ambition to promote consumer rights that this gave rise to was translated into action. Nor has she or Mr Armour himself answered the criticisms of the defendants about certain of Mr Armour’s past activities. These relate to two Australian companies of which he was a director and shareholder and which engaged in the practice of mass-mailing unsolicited offers to consumers to buy securities at prices substantially below their market value. The New Zealand Financial Markets Authority described the vice of such offers as being that “less experienced investors, in particular those who received shares through demutualisations and privatisations, often accepted these offers without understanding that they were receiving considerably less than they could have obtained if they sold through a broker”. These activities led to intervention by the NZFMA and in October 2010 Mr Armour gave an enforceable undertaking to the effect that offer letters would include a warning which disclosed the actual market price for the securities.

THE LAW

The judge reviewed the law and the authorities in detail.

1. 1. “CPR rule 19.8 is in these terms:

“(1) Where more than one person has the same interest in a claim-

(a) the claim may be begun; or

(b) the court may order that the claim be continued, by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.

(2) The court may direct that a person may not act as a representative.

(3) Any party may apply to the court for an order under paragraph (2).

(4) Unless the court otherwise directs any judgment or order given in a claim in which a party is acting as a representative under this rule-

(a) is binding on all persons represented in the claim; but

(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court.

(5) This rule does not apply to a claim to which rule 19.9 applies.”

THE DECISION: ACTION STRUCK OUT

The judge struck out the action. He concluded that the action did not meet the jurisdictional requirements of the rule.  Further he held that the dominant motive for the claim was the interests of financial backers and not the interests of consumers.

Discussion and conclusions

1. 1. I will first set out my two primary findings. I have reached the conclusion that the proposed representative action does not meet the jurisdictional requirements of the rule because the claimant and the represented parties do not share the same interest and that defect cannot be met by successive amendments to the class. Further, as a matter of discretion, I would not allow the claim to go forward as a representative action because the dominant motive for it lies in the financial interests of its backers, principally Mr Armour, and not the interests of consumers. That motive has translated into a proposed deduction from the compensation available to each represented party which is excessive and disproportionate both in its overall amount and in relation to the available alternative remedies, which would lead to no deduction at all.

1. 1. As Coulson LJ said in Jalla the starting point (or threshold) for any representative action is that the representing party must have “the same interest in a claim” as the parties that they represent. The reason for this is twofold. First, the represented parties are bound by the result of the representative action brought by the claimant. Second, having the same interest goes to ensure that the representative can be relied upon to conduct the litigation in a way which will effectively promote and protect the interests of all the member of the represented class. The analysis of the “same interest” is made at the outset of the claim and it takes into account “likely defences”. At the outset of this claim (i.e. now) it is clear that there are multiple different claims, all raising their own issues and requiring “individualised assessments”. To take one category, the “extraordinary circumstances” defence is fact-specific and the subject of many different authorities – not always easy to reconcile with each other. Each flight so affected would require its own detailed evidence and inquiry. It is true that Lord Leggatt in Lloyd v Google distinguished “conflicting interests” from interests which were “merely divergent”. But whether claims can be categorised as merely divergent is a question of fact and degree. To put that differently, there is a point at which interests diverge so widely that the class members cannot be said to have the “same interest”. This case trespasses a long way beyond that point and this was expressly or implicitly acknowledged by Mr Preston KC’s proposal periodically to trim or re-visit the class by amendment so as to maintain compliance with the rule.

1. 1. Mr Preston KC defended that proposal by saying that throughout the life of case the members of the class all had the same interest in the determination of compensation according to a formula based upon a common set of objective facts, which was that all were booked on a flight that was either delayed for more than 3 hours or cancelled. (This was a slight refinement of the class definition given in paragraph 16 of his skeleton argument. In that paragraph he said that the claimant had “the same interest as the represented parties because she and they each share the same cause of action under the same Regulation for a fixed sum by reference to the same statutory formula”.) Though no specifics were given, I presume that the anticipated amendments to the class would be by way of savings or exceptions or excluded categories. Mr Preston KC submitted that “same interest” as he formulated it met the requirement in Millharbour that the parties shared “in effect the same cause of action or liability”. He referred also to the language used by Lord Macnaghten in Duke of Bedford v Ellis which was to refer to a “common grievance” for which “a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent”. There was, he said, no need for a dispute, as such. The requirement for the same interest was satisfied by the looser concepts of a shared cause of action or shared grievance. Further, although he acknowledged that there was no precedent for his proposal to maintain the claim within the parameters of CPR rule 19.8 by successively trimming and amending the class, there could be no objection in principle and there was encouragement for that course in that (a) the authorities recognised that the class could fluctuate, (b) Robin Knowles J in Commission Recovery Ltd v Marks & Clerk LLP [2023] EWHC 398 (Comm) specifically contemplated that CPR rule 19.8 was not a “once and for all time provision” and might be re-visited or re-examined during the life of the claim (see paragraph 83) and that (c) we were in “the foothills of the modern, flexible use of CPR 19.8” (see paragraph 91 of Commission Recovery) which required the sort of innovative approach he (Mr Preston KC) commended.

1. 1. There are formidable objections to this approach. Whether represented parties share the same interest is tested by asking whether there is a “common issue” (or more than one), the resolution of which would benefit all the represented parties. That is clear from many cases, including Duke of Bedford v Ellis, Lloyd v Google, Prismall v Google UK Ltd [2023] EWHC 1169 (KB) and Commission Recovery Ltd v Marks & Clerk LLP [2024] EWCA Civ 9. Mr Preston KC’s formulation sets out no common issue. It is, rather, a high-level description of the represented parties’ cause of action. Beneath that high-level description (or “label” as I might call it), the practical reality is that the opening class presents numerous, widely diverging interests requiring individualised determinations. It does not present the same interest, or anything close.

1. 1. It is not permissible to address this problem by successive amendments to the class. The reasons, which overlap somewhat, can be expressed as follows. To accept that successive amendments to the class will be required is to admit that at the outset the claim is not properly constituted as a representative action. It is also to admit that the claimant does not and cannot “promote and protect the interests of all the members of the represented class” (see paragraph 71 of Lloyd v Google) and that there is no declaration or finding available that “would be equally beneficial to every member of the class” (see paragraph 51 of Nugee LJ’s judgment in Commission Recovery). If these very fundamental difficulties could be addressed by amendment, that would render the “same interest” test nugatory and would amount to a variation on the type of “rolling representative action” which the Court of Appeal deprecated in Jalla (see paragraph 61). The reason that the Court of Appeal deprecated that approach was that “the existence of the manifestly different interests of the represented parties” meant that it was “not a representative action in the first place“. To quote from paragraph (i) of Coulson LJ’s summary in Jalla of the applicable principles (see above), “the analysis of the ‘same interest’ is undertaken by the court at the time of the application under r. 19.8″. Other cases, e.g. Emerald Supplies have emphasised that the “same interest” test must be met “at all stages of the proceedings”; (my emphasis in all of the foregoing quotations). By contrast, no case says that it is sufficient if the “same interest” test is satisfied at the concluding stage of the proceedings. I find that unsurprising since it would run directly contrary to the underlying rationale for the rule. These defendants would have a particular grievance if the rule were interpreted as Mr Preston KC proposed because they would be shouldering a heavy burden of costs during the preliminary stages (as to which, see further below). That would be manifestly unfair to them when it is at those very stages that the claim would not be properly constituted as a representative claim (if, indeed, it ever could be).

1. 1. None of Mr Preston KC’s arguments adequately answered these points. It is recognised that in some cases and for differing reasons the class of represented parties may fluctuate organically. But this provides no grounds or legal basis for successive redefinitions of the class as a strategy to overcome basic defects which are known or anticipated from the outset. The remarks of Robin Knowles J in Commission Recovery about revisiting CPR rule 19.8 during the course of the action reflect the wording of the rule itself and the court’s general case management powers. (Though not referred to by Mr Preston KC, in the Australian case of Carnie v Esanda Finance Corpn Ltd 182 CLR 398, the High Court referred to the power under the equivalent Australian rule to “reshape proceedings at a later stage if they become impossibly complex or the defendant is prejudiced”.) These dicta provide no support for this claimant’s proposal which, I repeat, is for the court to sanction an ab initio strategy. As to flexibility and innovation, what the claimant proposes would, in truth, be an entirely new remedy lying somewhere on the margins between a representative action, a mandatory injunction to the airlines to pay undisputed claims, and early (or even pre-action) disclosure. That goes well beyond a flexible, purposive interpretation of rule 19.8. Mr Preston KC was, in effect, inviting me to re-write the rule.

1. 1. There are other objections to the constitution of the claim as a representative action. Before coming to those I will set out the reasoning for the second of my primary findings, which goes to discretion.

1. 1. Ms Smyth’s second witness statement describes her motivation for making the claim. I have already quoted from the relevant passage which casts her, if I can summarise, as a consumer champion. In her first witness statement made in November 2022 she described herself as an office manager. But she did not say whose office she managed. By letter dated 30 January 2023 and in response to enquiries from the defendants’ solicitors, Mr Preston KC stated that the claimant “had secured the assistance of a third party litigation funder”. By letter dated 21 February 2023, he disclosed that the funder was Mr John Armour and gave Mr Armour’s address in Monaco. Investigation by British Airways of its booking records revealed a link between Ms Smyth and Mr Armour and in response to a direct enquiry by Linklaters (for BA) Mr Preston KC, on 2 June 2023, confirmed that Ms Smyth was “employed by Mr Armour under a contract for services”. It was not until Ms Smyth’s second witness statement, dated 13 March 2024, that further details of the link between her and Mr Armour were given, namely that she had been his yoga instructor and that she had then set up and was now running a family office for him in London.

1. 1. That part of the defendants’ evidence referring to Mr Armour’s dealings with the New Zealand Financial Markets Authority has not been addressed at all.

1. 1. There has been and there continues to be a lack of transparency regarding Ms Smyth’s motivation, funding and suitability. On the material before me, I do not accept that her motivation lies in a desire to secure redress for consumers. She has had no prior involvement in such activities. Her evidence suggests or is only really consistent with that interest having been sparked by the chance (though common enough) experience of her cancelled flight. But she has not explained how and by what process that led her to the very considerable undertaking of a representative action brought by her on behalf of many millions of others. The availability of funding from Mr Armour, her employer, strikes me as unlikely to have been fortuitous. She was not at all forthcoming about her links with Mr Armour and there is inconsistency between Mr Preston KC’s letter of 21 February 2023 (claimant has no financial interest in the claim) and the somewhat careful wording of paragraph 117 of her second witness statement (her position is “reserved” but “as matters presently stand I have no commercial interest”). Neither she nor Mr Armour have given any context to or reassurance concerning the investigation by the NZFMA into Mr Armour’s share-buying activities in 2010. Such activities seem to me to be thoroughly inimical to his taking a role in this litigation, in which role he would be in a position to influence Ms Smyth. That influence would be the more likely and the more powerful given that he is her employer. Mr Bear KC described him as dominus litis, i.e. the person who was really running the litigation and the description seems apt.

1. 1. Ms Smyth’s consultative panel’s precise parameters and role have not been explained and it does not meet the difficulties I have described.

1. 1. I can understand that the details of the deductions approved on a without notice basis by Master Pester may be sensitive and confidential and may contain material which is privileged. The arrangements may therefore be unsuitable for disclosure / full disclosure to the defendants. Given that they have not been disclosed, I am not in a position to make any findings as to whether the funding arrangements are lawful. But it is apparent that they have not been subject to any kind of market testing and my provisional view is that to take almost one quarter of the total amount of the compensation is disproportionate when, on the claimant’s case, the work involved (a) arises in the preliminary stages of the claim and (b) falls overwhelmingly on the defendants and where (c) there is no sliding scale according to the amount recovered. More pertinently, this is a deduction which any given represented party would not suffer at all if they claimed their compensation via the defendants’ DCPs or ADR schemes or via the Small Claims procedure in the County Court, which for a winning claimant who acts in person is cost-free. (A losing claimant would not have to pay the opposing airline’s costs. So the Small Claims procedure is also effectively risk-free.) I do not accept Mr Preston KC’s comparison, which he submitted was between this representative action and “nothing”. He submitted that that was the relevant comparison because the members of the class he was concerned with would otherwise, through ignorance, make no claim. I do not think that that is valid. Parliament had the choice whether to implement a scheme of automated compensation, which was indeed at one stage proposed by the CAA Consumer Panel. The Department for Transport consulted about such a scheme in January 2022 and published its response in June 2023. The response was that more work was needed “to consider the merits and limitations of any changes in this area”. The current scheme provides for passengers to be informed of their right to be compensated for cancellation etc but also that compensation is not automatic. The Regulation is policed by the CAA under powers conferred by Part 8 of the Enterprise Act 2002, but passengers who wish to make a claim have to be proactive in doing so. Any change to that legislative scheme is a policy issue for Parliament. Mr Preston KC’s comparison would only be valid from the starting point of an assumption that the proper or rightful scheme would be the automatic scheme not chosen by the legislature but favoured by the claimant (and which is, indeed, the avowed aim of her representative action). But that is the wrong assumption.

1. 1. The discretion whether to allow the claim to proceed as a representative action is exercised in accordance with the Overriding Objective to deal with cases justly and at proportionate cost. One consideration is whether allowing a representative action to go forward would promote access to justice. It is hard to see how these aims would be served by this action when the represented parties have an alternative remedy which is easily accessed at no cost at all. The contrast is between, on the one hand, a representative action imposing very significant burdens of cost on both the defendants and the represented parties and, on the other, individual claims imposing modest costs on the airlines and no cost at all on the represented parties. It seems obvious that the latter is the better option and it is telling that there is no case in this or, so far as I am aware, any jurisdiction where, faced with such a choice, a court has sanctioned a representative action. One further and related aspect is that where a passenger brings an individual claim under a direct claims procedure or ADR process or Small Claim it will give rise to a definite outcome, i.e. it will be resolved. The claimant’s proposed representative action will resolve few, if any, disputed claims. These will simply be jettisoned. That seems to me a melancholy and unfavourable aspect of the comparison.

1. 1. Having set out the two primary grounds why I am not prepared to sanction this representative action, I can deal with the others very much more shortly. I do so bearing in mind the observations of the Court of Appeal in Commissioner of Customs & Excise v A [2002] EWCA Civ 1039 at paragraphs 80 – 84. Not every argument urged on me by the parties has been central to my decision. Not every argument has required from me the detailed analysis found in the skeleton arguments (in turn drawn from the 7 lever arch files of documents and the 6 lever arch files of authorities which this case generated for the hearing).

1. 1. Two aspects of jurisdiction were mentioned in argument but were ultimately irrelevant.

1. 1. The first is that Mr Preston KC said in his skeleton that an alternative structure to the proposed one of a gradually reducing class size “would have been to exclude those claims [i.e. the ones in which arguable statutory defences were raised] from the outset”. This was, indeed, what the letter of claim envisaged. In his oral submissions, Mr Preston KC distanced himself from that alternative structure because it would fall foul of the rule that the class cannot be defined by or depend upon the outcome of the litigation; see Emerald Supplies. That was a proper concession. I would add that that final class would also be objectionable on the ground that it disclosed no common issue in which the represented parties could meaningfully be said to share the “same interest”. It would be just a collection of represented parties with undisputed or indisputable claims. It would be a class that was empty of actual issues.

1. 1. The second is that the problem of conflicting and/or widely diverging interests can, in a proper case, be addressed by bifurcating a representative action, i.e. by splitting off claims that call for individual participation and assessment. (The classic example of that would be bifurcating the claims once the issue of liability had been decided so as to address individual damages assessments. But other examples could be given.) The claimant did not seek any such remedy. She acknowledged that the sheer volume of numbers would impose an impossible case management burden on the court (though I suspect that a cost / benefit analysis from her and/or Mr Armour’s perspective would also have entered the equation). Her preferred strategy was to shed those represented parties in respect of whom defences were raised unless those defences presented a simple issue of law requiring nothing more than a paper hearing. I have already touched on this subject. It seems to me to be an acknowledgement that the interests of those represented parties whose claims would be dropped would not be having their claims “protected and promoted” by the claimant. From the airlines’ point of view, it also seems a poor return on the costs and effort which the claimant would be imposing on them.

1. 1. The latter point is very relevant to discretion. The claimant’s action would require the airlines to undertake an analysis of 116,000 flights going back 6 years – a task described by British Airways as “gargantuan” and by easyJet as “enormous”. The airlines put in a good deal of evidence about this, which included a detailed critique of the claimant’s proposed “4 Steps”. They said that in reality there would be many more than 4 Steps. The claimant’s evidence was to the effect that the process was, or could be, relatively straightforward and that in respect of many flights the groundwork would already have been done in response to one or more claims made in the conventional way. I do not propose to analyse these competing bodies of evidence. Suffice it to say that I am satisfied that there would indeed be a very significant burden on the airlines. At the risk of revisiting points I have already explained, in addition to scale, that burden would have two objectionable features. First, much of the work involved would be wasted. Second, the work would in practical terms be forcing the airlines to implement the automatic compensation scheme for which Parliament did not provide. I do not think that this would be just or proportionate.

1. 1. The defendants took a variety of other points with respect to both jurisdiction and discretion. In no particular order, these included specific conflicts within the class, the problem of the claimant’s lack of authority both to receive others’ money and to waive elements of others’ claims, the ‘residue’ / unclaimed balance problem and data protection issues. Some of these had a slightly confected flavour. Some or all might be overcome were this a properly constituted representative action, (which it is not). The most problematic of them, as it seems to me, is the issue of the claimant’s authority to receive money which is not hers and to make deductions from that money. As Nugee LJ observed in Commission Recovery “it is not immediately obvious how [the class representative] can obtain a money judgment on claims that do not belong to it”. The money claims belonged to “each member of the class and it is not suggested that they have been assigned to [the class representative]”; (see at paragraph 33). Mr Preston KC said that this problem, if it were a problem, could be dealt with by a direction that the defendants make the payments to the represented parties. He added that each such payment “would need to be the balance after the costs and expenses are deducted”. It is obvious that such an arrangement would place a very considerable administrative burden on the airlines and would put them in a commercially invidious position with their customers. I very much doubt that it is a solution that would commend itself to a court. As to deductions, given that these have been at least provisionally approved by Master Pester, I will simply observe that the jurisdiction under which he gave his approval (the principle in In Re Berkeley Applegate Ltd [1989] 1 Ch 198) is one of uncertain breadth and reach and it is not obvious that it can be applied to the present situation. Nor is it obvious that to remove this, and only this, aspect of the case to the Chancery Division was correct. It could equally well (and perhaps better) have been heard in the King’s Bench Division where it could have been considered in the broader context of the applications before me.

1. 1. These are issues that are better addressed in a case where they matter, i.e. a case where the anterior and fatal objections to the representative action which I have identified do not arise.

Disposal

1. Because the action is not properly constituted as a representative action, I will strike it out under CPR rule 3.4(2)(b) & (c). Under CPR rule 19.8(2), I will also direct that the claimant may not act as a representative. I make it clear that in my view both rules are wide enough to embrace not only the jurisdictional but also the discretionary factors to which I have referred.