How Fieldfisher is using technology to drive down costs in volume claims
In our latest blog we’re speaking to a partner who has broad expertise in representing both corporates and consumers in volume claims. Ellie Pinnells, is a partner in the Disputes practice at Fieldfisher and has been leading the way in her team in using technology to drive down costs and secure access to justice in volume and class actions.
Q: Ellie, tell us more about your background and how you got into volume claims and group actions space?
A: Although it's gone through multiple name changes and mergers - from a trainee at Reed Smith, to an associate at Hill Hoffstetter and now a partner at Fieldfisher - I have been at the same firm throughout my career as a commercial litigator.
My first exposure to volume claims was an equal pay claim against a local authority.
Running those claims involved a lot of "people and paper". People are expensive, paper is time consuming and also environmentally not great. My focus for the next bulk claim was to switch reliance away from those traditional methods to technology.
Q: Why were these volume claims rather than a group action?
There are several ways in which group litigation can be structured, and it will depend on the nature of the case which route is most suitable.
For equal pay claims brought in the Employment Tribunal, each claimant is given an individual claim number. The Employment Tribunal, usually of its own volition, groups similar claims together. Given their vast experience of large equal pay claims, the Employment Tribunals now have a sophisticated yet highly practical approach to managing groups; in particular groups that grow over time.
The Competition Appeal Tribunal (CAT) has its own class action regime, which can be "opt-in" or "opt-out". It can take some time to get a class certified, but once up and running, the CAT offers a flexible and practical approach to case management.
In the High Court, Group Litigation Orders (GLOs) and representative claims are a well-established way of bringing bulk claims. However, these are not always the most suitable way to structure a group claim, particularly where there are slightly different interests being pursued within the claimant group. I suspect that the courts will review the GLO and representative claim regimes and work with the legislator to reflect the need for greater flexibility in the rules as group litigation continues to grow.
Q: You mentioned how you’ve used technology to improve your case management, could you tell us more about that?
A: Technology is key in allowing firms to run group litigation efficiently, both on the Claimant and the Defendant side. Developing technology is not an easy process. It involves mapping out the workflows in extreme detail, deciding what can be automated, where quality controls are needed, and which decisions must be made by a human.
The key is a flexible system that evolves with the case. There is no point in purchasing a "complete solution". In every case there are twists and turns, it's simply not possible to map out every step from start to finish. The ideal tech solution is one where users have access to high level coding, so they can programme the system themselves. If each new step means going back to the tech provider for support, then the financial model quickly falls down: the aim was to replace people with technology, not to replace lawyers with programmers.
As an aside, the ideal workforce for group claims are lawyers with tech skills, and techies with legal skills. All need to be excellent project managers. This opens up a part of the profession to entrants with wider and different skill sets and from a more diverse background. That can only be a good thing, in my view.
Q: You also work a lot with SMEs and corporations in group actions, how is this different from the consumer actions you’ve worked on?
There are of course many similarities in acting for consumers and SMEs, but there are some crucial differences.
With consumers, it's clear who is instructing you: the consumer (or perhaps a friend or relative under a letter of authority). Client on boarding is really simple. With companies, you have to do much more work at the start to find out what the company structure is, who can give you instructions, who should be included on updates and you have to monitor any changes at the organisation.
Individuals can often give you a quick yes/no answer. With companies you sometimes have to wait for a board meeting before you can get a decision, and of course the interests of shareholders have to be considered.
The style and method of communication are different. Large consumer groups inevitably include individuals who might not have a computer or smart phone, so you can't always operate by email. Language and literacy issues are more prevalent in consumer groups, and one thing that is very important to me is that our clients don't get long and complicated "lawyers' letters", but that they are given information in way that they can easily understand it and feel part of the claim.
It can be hard for companies that are used to a close 1:1 relationship with their lawyers to be part of a group claim. It's not possible to be on the end of the phone 24/7 for every group member, or to provide an immediate, personable answer to every email, commenting on the latest football scores, the weather or their latest exotic holiday. So you have to work hard to put in place clever communication strategies so that clients get the answers they need and feel looked after, but you don't have to hire a whole team to operate the phones. As with most things, project management techniques and technology are your friends here.
Q: Will we see more corporates coming together in group actions?
A: Yes - we’re seeing a lot of growth in these types of actions: business interruption claims as a result of COVID are one recent example.
Group litigation is an important access to justice mechanism for SMEs. In the truck cartel claim for example, it would be uneconomical for a small business owner to bring a claim for a single truck. However, if they can join a group of claimants, then they can pursue their claim and hope to get something out at the end of it.
One of the main bars to group litigation is the cost. Traditional approaches involving huge numbers of fee earners simply make it financially unviable to pursue litigation. Law firms that can get the cost down (through using technology) will be able to take on groups that otherwise would have no way to access justice.
Q: What do you think of the role of funders in group and volume claims?
A: Third party funders play an important role in group claims, enabling claims to be run on a "no win no fee" basis in circumstances where a law firm is unable or unwilling to risk or defer its fees, sometimes over years. But, funders are definitely not charities. The returns that funders look for are significant, and usually only work on large, valuable claims.
At Fieldfisher we have a unique solution: FeeSolve. The returns on investment are lower than third party funding, meaning that claimants are able to recover more of their compensation, and in some cases means that we can run cases that would be uneconomical to run with third party funders.
Q: How do you see of the future of group actions?
A: Group claims will continue to grow and I expect that the courts' procedural rules will adapt to the changing landscape.
I think on the whole this is a positive development because group claims are a significant way of evening out the "David and Goliath" situation that many individuals and SMEs face.
On the other hand, there is of course always a danger that the system is abused. Parliament has already regulated the activity of claims management companies to avoid cowboy companies taking extortionate (and often hidden) fees from consumers, leaving individuals with little or no compensation at the end of it. Law firms are already subject to strict professional conduct rules.
Even so, I would like to see an ethical approach being introduced on a number of levels:
- Clients should end up with a meaningful level of compensation. If their claim is for money to fix something (e.g. a building defect), then they need all of the money they are awarded. What's the use in getting money to fix e.g. dangerous cladding on a building, if half of that money goes to the lawyers and then the claimants can't afford to fix their problem?
- Lawyers should only be involved if there is legal work to be done or they can add some other kind of value to a client. I will give you an example: When I had a washing machine delivered, the delivery driver told me that he was on minimum wage, but if he didn't hurry up and install the thing, he would have to finish his round outside of his paid hours of work. He usually ended up working 2-3 hours unpaid anyway. I thought this might very well make a good minimum wage group claim until I found out that all he needed to do was contact HMRC. They would investigate and, if there was anything unlawful going on, HMRC would sort it out. No need for lawyers, no need for the claimants to give away part of their compensation to lawyers or claims management companies or anyone else.
- Lots of large corporates, such as banks, recognise the cost of litigation and have set up their own redress schemes for mis-sold financial products or hidden commissions. These scheme are designed for individuals to make a claim without needing a lawyer or a case management company. There are also the Ombudsman schemes which are designed for individuals to seek redress without lawyers. I would always encourage individuals to exhaust their options before getting a lawyers involved.
