Outer House refuses permission for appeal against appointment of representative party in BMW diesel emissions group action

A group of several thousand persons sought decree that diesel BMW vehicles had been built with defeat devices intended to unlawfully control NOx emisisons during regulatory engine testing, and payment of damages representing a reasonable assessment of their losses. The court authorised Mr Lee Bridgehouse to be the representative party, which was challenged by the defenders.

The case was heard by Lord Ericht. Milligan KC and Black, advocate, appeared for the applicant and Lord Davidson of Glen Clova KC and Boffey, advocate, for the defenders, who comprised four members of the BMW group and Alphabet GB Ltd.

Same position as any client

In the application to authorise Mr Bridgehouse as the representative party, it was noted that he had an experienced legal team and that the litigation was funded by Quantum Claims, which would be responsible for bearing any adverse award of expenses. Other group members would be safeguarded by the ability in Scottish Group Procedure to challenge and replace the representative party. Were his application to be refused, it was proposed that an application be made for Grant McCulloch, a retired sheriff and former President of the Law Society of Scotland, to be the representative party.

The defenders had submitted that the applicant had failed to discharge the onus to show that he was a suitable person to act as a representative party. They noted the complex factual engineering matters the proceedings would raise, and the involvement of at least six law firms and funders and insurers, not all of whom would have fully aligned interests.

In his decision approving the applicant as representative party, Lord Ericht took the view that the appointment of a retired lawyer as representative party should not become the norm in Scottish Group Procedure. Mr Bridgehouse did not claim any ability or experience beyond his experience with his own vehicle and thus was in the same position as any client in ordinary individual litigation. Lord Ericht also considered that an unduly restrictive approach could discourage the bringing of group proceedings in Scotland.

It was submitted for the defenders on appeal that the court was bound to consider the interests of both parties and in the exercise of its discretion say where the balance lay. The proposed reclaiming motion would allow the Inner House to provide authoritative guidance on the appointment of representative parties.

The applicant submitted that the true purpose of the defenders’ appeal was delay, and there was no proper basis for the interlocutor to be reviewed. The object of leave to appeal was to prevent appeals which were not worth pursuing and avoid inconvenience, expense, and delay.

Does not further disposal

In his decision on permission to appeal, Lord Ericht began: “The defenders’ position is that the appeal represents an issue of general importance which has received little reported judicial scrutiny and the proposed reclaiming motion would present an opportunity for the Inner House to lay down authoritative guidance of the development of Scots law overall. In my opinion the benefit of obtaining Inner House guidance does not further the just and effective disposal of the case in hand.”

He added: “While the Inner House nowadays deals with reclaiming motions more quickly than may have been the case in the past, there would still be some delay. The interests of both parties are in the expeditious resolution of the substantive issues between them. The replacement of Mr Bridgehouse by another representative party does not advance resolution of these issues.”

Looking to Canadian jurisprudence for guidance, Lord Ericht said: “As Sondhi v Deloitte Management Service LP (Ontario Supreme Court, 2018) demonstrates, defenders in a class action or group proceedings do not have a strong interest in ensuring that class members are adequately represented. If the authorising of the class representative was such a significant milestone as to necessitate the possibility of review, the rules could have provided that no leave was required.”

He therefore concluded: “Having balanced the interests of both parties, in my view in the exercise of my discretion the balance lies against allowing leave to reclaim.”