Factual and Procedural Background
The Applicant applied for permission to bring group proceedings concerning the alleged design, manufacture, and installation of prohibited defeat devices in diesel engines of certain vehicles branded by Company A, purportedly manufactured to Euro 5 and Euro 6 emissions standards. These devices allegedly unlawfully reduced the effectiveness of nitrogen oxide ("NOx") emissions control systems under normal vehicle operation.
The Applicant also sought to be authorised as the representative party for a group claiming loss due to these alleged defeat devices. The first and second respondents are companies within the Company A group, involved respectively in designing, manufacturing, and supplying affected vehicles. The third respondent is a leasing services company financing leases of affected vehicles, and the fourth respondent is a finance company financing purchases or leases of such vehicles.
The first and second respondents, along with the fourth respondent, opposed both applications. The third respondent was neutral on the authorisation of the Applicant as representative party but opposed permission for group proceedings. The matter was initially heard on 6 March 2025 but was adjourned pending the release of guidance from the Inner House in analogous proceedings. Following the issuance of those opinions, the respondents maintained opposition, and a further hearing was held on 24 June 2025.
Legal Issues Presented
- Whether the Applicant is a suitable person to be authorised as the representative party in the proposed group proceedings under the relevant procedural rules and legislation.
- Whether permission should be granted to bring group proceedings based on the satisfaction of statutory and procedural criteria including commonality of issues, existence of a prima facie case, superiority of group proceedings over individual actions, and real prospects of success.
- The adequacy of the Applicant’s financial resources or funding arrangements to meet potential adverse expenses awards.
- The sufficiency of jurisdictional basis and the coherence of the draft summons in relation to the claims against the various respondents.
Arguments of the Parties
Applicant's Arguments
- The Applicant contended that he was in a similar position to other applicants previously authorised as representative parties in comparable group proceedings.
- The suitability test requires a low bar, focusing on the ability to prosecute the action efficiently and effectively in the interests of the group rather than demanding special expertise.
- Concerns about the Applicant’s litigation experience and financial resources were addressed by the provision of an undertaking from a litigation funder with a substantial financial standing and a long history of meeting expenses awards.
- The Applicant asserted that the statutory and procedural criteria for permission to bring group proceedings had been met, including commonality of issues, a prima facie case, and superiority of group proceedings.
- Regarding control over the litigation, the Applicant’s counsel clarified that routine conduct would rest with the Applicant and legal advisers, satisfying the requirement for independence despite the litigation funder’s role.
First and Second Respondents' Arguments
- They argued the Applicant lacked sufficient competence and financial resources to act as representative party.
- They raised concerns over an unexplained overlap with parallel proceedings in another jurisdiction involving the same vehicle identification number.
- They contended the draft summons was confused, particularly on jurisdictional grounds, and that not all respondents could be held jointly and severally liable.
- They asserted there was no prima facie case against the first and second respondents, notably because these respondents did not engage in relevant direct sales transactions during the relevant period.
- They challenged the adequacy of averments regarding fraudulent concealment and consumer protection claims.
Third Respondent's Arguments
- The third respondent maintained neutrality on the Applicant’s authorisation as representative party.
- It aligned with the fourth respondent’s submissions opposing permission to bring group proceedings, emphasizing lack of dealings with some group members and absence of knowledge of defeat devices.
Fourth Respondent's Arguments
- The onus was on the Applicant to demonstrate suitability, including fairness, absence of conflict, competence, and financial resources.
- The Applicant failed to demonstrate an understanding of the responsibilities of a representative party or to address potential conflicts within the group.
- The financial undertaking from the litigation funder was inadequate due to lack of clarity on revocability, addressees, and disclosure of the funder’s wider financial exposure.
- The draft summons lacked a sufficient prima facie case and real prospects of success against the fourth respondent, with fundamental deficiencies in pleading and evidence.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Mackay v Nissan Motor Co Ltd [2025] CSIH 14, 2025 SLT 629 |
Guidance on authorisation of representative parties and permission to bring group proceedings; low bar for suitability; emphasis on access to justice; statutory tests for commonality, prima facie case, and real prospects of success. |
Used as primary guidance to assess suitability of Applicant and grant permission for group proceedings; confirmed the discretionary and pragmatic approach to these applications. |
| Milligan v Jaguar Land Rover Automotive Plc [2025] CSIH 16, 2025 SLT 763 |
Clarification on the burden of proof for suitability and merits at the permission stage; confirmed that detailed examination of merits is inappropriate at this stage. |
Reinforced that the Applicant need not lodge extensive evidence; supported the low threshold for suitability and permission. |
| Wightman v Advocate General for Scotland [2018] CSIH 18, 2018 SC 388, 2018 SLT 356 |
Definition of "real prospects of success" as genuine rather than speculative or fanciful; applied in the context of permission to bring group proceedings. |
Guided the court’s assessment of the merits threshold for permission, emphasizing exclusion of obviously unmeritorious claims. |
| Liquidators of the Western Bank v Douglas (1860) 22 D 447 |
Common law principle regarding joint and several liability and the impropriety of forcing defenders to litigate unrelated claims. |
Considered but distinguished on the basis that group proceedings statute supersedes common law on joint and several liability issues. |
| Treadwell's Drifters Inc v RCL Ltd 1996 SLT 1048 |
Common law authority on procedural fairness and connection of claims to defenders. |
Considered but superseded by statutory provisions governing group proceedings. |
| Ruddy v Chief Constable of Strathclyde [2012] UKSC 57, 2013 SC (UKSC) 126, 2013 SLT 119 |
Approval of principles from Treadwell's Drifters regarding connection of claims and defenders. |
Referenced to highlight common law background but noted that statutory group proceedings regime prevails. |
| SDG Tulloch Homes Ltd v European Development Co (Homes) Ltd [2016] CSOH 36 |
Further elaboration on common law principles of liability and procedural propriety. |
Referenced similarly to above cases with recognition of statutory override. |
| Bilfinger Construction UK Ltd v The Edinburgh Tram Inquiry [2018] CSIH 48, 2018 SLT 925 |
Requirement for specificity and weight in averments to establish a prima facie case at permission stage. |
Used to frame expectations for the content and quality of pleadings at this stage. |
| Brown v Parole Board for Scotland [2021] CSIH 20, 2021 SLT 687 |
Requirement that arguments or statements have sufficient substance to meet the real prospects test. |
Guided the court’s assessment of merits threshold, emphasizing substantive foundation over mere arguability. |
| Sullivan v Golden Intercapital (GIC) Investments Corp 2014 ABQB 212 |
Foreign authority on the qualities required of a representative party in group proceedings, including independence and understanding of the role. |
Considered in submissions but noted as of limited direct application; principles acknowledged in assessing suitability. |
| Azar v Strada Crush Ltd 2020 ONSC 549 |
Foreign authority emphasizing the need for a representative party to exercise independent judgment and loyalty to the group. |
Referenced to support arguments on suitability and independence requirements. |
| Christine Riefa Class Representative Ltd v Apple Inc [2025] CAT 5, [2025] Bus LR 417 |
Considerations on the responsibilities and independence of representative parties in group proceedings. |
Used to illustrate the standard expected of representative parties in managing litigation and conflicts of interest. |
| Thompsons Solicitors Scotland v James Finlay (Kenya) Limited [2022] CSOH 12, 2022 SLT 731 |
Discussion of control and independence in group litigation funding and representative party roles. |
Referenced regarding concerns over litigation funder influence and independence of representative party. |
Court's Reasoning and Analysis
The court commenced by considering the statutory framework under the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 and the Rules of Court, guided principally by the recent Inner House decisions in Mackay and Milligan. It emphasized the discretionary, pragmatic, and low-threshold nature of the tests for authorisation of a representative party and permission to bring group proceedings, with a strong policy focus on improving access to justice.
Regarding the Applicant’s suitability as representative party, the court noted the absence of special expertise but found no evidence of unsuitability or conflict of interest. The Applicant’s status as an ordinary group member with limited but relevant litigation experience, combined with the support of an established litigation funder, satisfied the low bar for authorisation. Concerns about the funder’s potential control were addressed during the second hearing, leading to acceptance of the Applicant’s independence.
On the permission to bring group proceedings, the court applied the statutory tests sequentially:
- Commonality: The claims shared sufficient similarity or relationship, particularly concerning the alleged installation of prohibited defeat devices in vehicles with Euro 5 or Euro 6 diesel engines, satisfying section 20(6)(a) of the 2018 Act.
- Notification: The Applicant demonstrated reasonable efforts to identify and notify potential group members through extensive advertising, meeting section 20(6)(b) requirements.
- Prima facie case: The court found the draft summons and supporting material sufficient to show a serious question to be tried without delving into detailed factual or legal analysis, consistent with the low threshold established in Mackay.
- Superiority: Given the large number of potential group members, group proceedings were deemed the most efficient and appropriate method for resolving the claims.
- Real prospects of success: Although the case lacked certain objective indicia such as recalls or rectifications seen in other cases, the court concluded the claims were not speculative or fanciful and thus met the threshold.
The court rejected the respondents’ arguments that the draft summons was incoherent or jurisdictionally flawed at this preliminary stage, noting that statutory provisions for group proceedings superseded common law on joint and several liability and that detailed challenges to pleadings were inappropriate at this point.
However, the court acknowledged that issues relating to the fourth respondent’s liability were fundamentally deficient and that no prima facie case or real prospects of success were demonstrated against it. This aspect was noted as a potential ground for limiting the scope of the proceedings.
Holding and Implications
The court granted the following orders:
- Authorisation of the Applicant as representative party: The Applicant was deemed suitable to act as representative party in the proposed group proceedings.
- Permission to bring group proceedings: Permission was granted for the proposed group proceedings to be brought, subject to any ancillary matters.
The decision reflects a continuing judicial approach favouring access to justice through group proceedings by maintaining a low threshold for authorisation and permission, while allowing detailed substantive and procedural issues to be addressed as the litigation progresses. No new precedent was set beyond the reaffirmation and application of recent Inner House guidance. The court indicated that any deficiencies, particularly regarding claims against the fourth respondent, could be addressed through case management or limitation of issues as appropriate.