A recent Court of Appeal (CoA) ruling could prove highly beneficial not just to millions of consumers, but also to claimant litigators and litigation funders.

The CoA overturned the High Court decision of Mr Justice Warby a year earlier, which had seemingly snuffed out a huge class action against Google over alleged data breaches. Following this month’s CoA decision, the claim – brought by consumer rights champion Richard Lloyd on behalf of more than 4 million iPhone users – can now proceed. It is being backed by funder Therium to the tune of £15.5m, with after-the-event insurance in place to cover adverse costs of up to £12m. The ramifications of the judgment go well beyond the individual case – huge as it is – and could lead to a new wave of mass data breach claims, which would be grist to the mill of litigation funders.

At the root of the claim against Google are allegations that the tech giant used a ‘Safari workaround’ to secretly track the online behaviour of iPhone users between August 2011 and February 2012. Google is alleged to have bypassed privacy settings and collected data on people’s surfing habits to create groups with labels such as ‘football lovers’, so that advertisers could then be offered the chance to target these groups.

Lloyd’s action has been brought by City firm Mishcon de Reya using a representative action procedure under CPR 19.6(1). The enormous class of 4 million iPhone users do not need to actively sign up to this US-style ‘opt-out’ class action, but they must have the ‘same interest’ in the claim. This was considered a stumbling block by Warby J at first instance, but the CoA took a different approach. It held that a person’s personal data has an economic value, and loss of control of this data violates their right to privacy. That counts as ‘damage’ under data protection laws, without the individual needing to show financial loss or distress. Everyone in the class can therefore be found to have suffered the same loss, and awarded a uniform amount per head.

All this means these claims will now be much easier to bring and litigation funders certainly seem keen to provide the financial firepower to support them. But it could be bad news for businesses that are obliged to disclose their data or security breaches; they can sit back and wait for the claim. 

In the case against Google, however, there is still a big question over how much the claim is actually worth, vast as the category of claimants may be. While Lloyd has previously said he is seeking £750 per individual – a total liability of up to £3bn – the CoA ruling appeared to suggest that damages would be much lower, based on the ‘lowest common denominator’ of damages suffered by any individual within the class.

Google has already said that it will appeal to the Supreme Court, adding: ‘Protecting the privacy and security of our users has always been our number one priority. This case relates to events that took place nearly a decade ago and that we addressed at the time. We believe it has no merit and should be  dismissed.’ If Google’s appeal is unsuccessful the case will proceed to a substantive hearing, which will then decide on liability and any damages. The two court rulings handed down so far relate to Lloyd’s application for permission to serve the claim on Google in the US, which must be granted before the substantive claim can get off the blocks.

Google’s appeal is not the only collective redress case that will be coming before the Supreme Court justices. Moving from data protection to the world of competition law, there is another mammoth action coming up: Merricks v Mastercard is worth an estimated £14bn. It is being brought by solicitor and former financial services ombudsman Walter Merricks on behalf of 46 million consumers, backed by litigation funding. The claim stems from a finding by the European Commission in 2014 that certain credit card fees were set at an unlawfully high level, which artificially raised prices for British consumers over a 16-year period.

Mastercard continues to disagree fundamentally with the basis of the claim.

In 2017, the claim was struck out by the Competition Appeal Tribunal (CAT), in a blow to the fledgling opt-out collective action regime created by the Consumer Rights Act 2015. The CAT rejected the claim on a number of counts, including that it did not consider that Merricks could accurately quantify the individual loss to different claimants. In April this year, however, the CoA reversed the CAT decision and the claim was revived. The CoA rejected the CAT approach that damages would need to be shared out according to individual loss, which would make such cases hard to bring. It noted that the new regime was ‘obviously’ intended to create a ‘means of redress which could attract and be facilitated by litigation funding’.

This case will now be heard by the Supreme Court before Christmas. Several other big collective actions – including two litigation funding-backed ‘truck cartel’ claims – are currently on hold, awaiting the ruling. If the Supreme Court justices agree with their CoA colleagues, this could prove to be a lucrative new area for claimant lawyers and funders alike; not to mention the humble consumer.


Rachel Rothwell is editor of the Gazette sister magazine Litigation Funding, the essential guide to finance and costs. For subscription details click here or tel: 020 7841 5523