AFM and SAG-AFTRA & ors v Secretary of State

Background

In December 2020, two sets of Claimants issued proceedings seeking Francovich damages shortly before the statutory guillotine date for doing so as set down in the European Union (Withdrawal) Act 2020. The underlying claim centres upon the allegation that the UK’s system of ‘material reciprocity’ as regards performers’ rights to equitable remuneration was in breach of EU law.

The first set of Claimants comprised AFM and SAG-AFTRA: two trade unions representing US performers. They issued claims in their own names but claimed damages by reference to the loss allegedly suffered by their members. The second set of Claimants comprised a small number of individual US performers, who purported to claim in a representative capacity under CPR r19.8 on behalf of a class of some 30,000 other performers.

The Secretary of State argued that the claims brought by AFM and SAG-AFTRA should be struck-out on the grounds that there was no mechanism in English law whereby a trade union could issue proceedings in its own name and then claim Francovich damages by reference to loss allegedly suffered by its members (at least, not in the absence of any assignment). The trade unions argued that the question of their standing (or ‘title to sue’) ought to be determined by reference to US law and relied upon expert evidence to the effect that the trade unions would be considered to have “associational standing” if these proceedings were issued in the US. The High Court disagreed. The question was to be determined applying English law rules, and the CPR: [82] – [93]. The trade unions had chosen not to make use of any of the various procedural routes for representative or group actions in this jurisdiction: [94].

The Secretary of State also argued that the CPR r 19.8 claims should not be permitted to proceed for a variety of reasons. The High Court rejected the Secretary of State’s arguments as to the clarity of the class definition and conflicts of interest. However, it accepted that the claims as pleaded would require an individualised assessment of damages. Mr Justice Richards noted that the Supreme Court in Lloyd v Google [2022] AC 1217 appeared to contemplate the possibility that representative actions might be combined with individualised assessments of damage through some kind of bifurcated process. However, the problem was that the Claimants had not grappled with this issue. In circumstances where the statutory guillotine meant that it was too late for fresh proceedings to be begun, the Court decided to give the Claimants one last opportunity to develop proposals for how they would run the litigation. See [66] to [72].

The Secretary of State had otherwise applied for strike-out or summary dismissal of other aspects of the Claimants’ claim, including a claim for damages in respect of the period post-dating 31 December 2020 (or IP completion day) on the grounds that this was contrary to paragraph 39(7) of the European Union (Withdrawal) Act 2018. The High Court declined to determine the points of law raised by these other strike-out applications, holding that they were novel questions better determined at trial.

Ravi Mehta and Hollie Higgins acted for the Secretary of State.

The judgment is available here.