Should a group action get to court, we may ask our clients to sign a Litigation Management Agreement (LMA). A LMA sets out how we will manage the court case on behalf of our clients. In this quick guide, we explain more about Litigation Management Agreements, and what clients agree to when they sign.
A Litigation Management Agreement (LMA) is a legal agreement between you, your lawyers, and all the other claimants in the group action. It helps to ensure that your case is managed in the most cost-effective, and least troublesome way to you.
The LMA establishes a committee – authorised by all claimants – to sign court documents and approve key steps on behalf of you all. The creation of a committee is routine in group actions of this kind.
Claimants must review and sign several documents in a group action. But, getting hundreds (or sometimes thousands) of people to sign paperwork and forms individually can be a time consuming, frustrating and costly task.
With a LMA, the entire group authorises a committee of claimants to sign all the court documents and approve all the critical steps on behalf of everyone involved. This ensures that the case progresses without delay and helps to achieve the best outcome possible for the group as a whole.
Before sending you a LMA to sign, your group action lawyer will review each individual case in a multi-claimant action and allocate claimants to subset groups. For instance, depending on the group action, claimants might be classified as follows[1]:
The committee might consist of one representative from each group.
[1] For example only, each group action will involve different groups of claimants.
Initially, we contact all claimants to let them know that we will be asking them to sign a LMA. At this stage, an initial group of nominees will have been selected by our lawyers; however, everyone will get the chance to let us know if they want to be on the committee.
Once we have a full list of proposed members, we select final nominees from a cross-section of claimants and ask if they are willing to be on the committee.
The selected group members sign an agreement to act on behalf of, and in the best interests of everyone involved.
A copy of the LMA is sent to every claimant to sign electronically. Unfortunately, anyone who is not willing to sign the LMA may be removed from the group action unless they are willing and able to pay their own court fees and expenses. Those signed up to the LMA will benefit from our no-win, no-fee guarantee, and will also be provided with insurance to cover any non-recoverable costs if we win*.
Once the committee is established, the case progresses to the next stage.
*With the exception of our success fee.
The LMA also sets out some additional terms of agreement. These include:
The LMA explains that each claimant has authorised us (their lawyer) to act on their behalf and that we will make an application for a Group Litigation Order (GLO). A GLO is an order of the court in England and Wales. It allows people who have suffered common or related issues to have their cases managed collectively via a group action.
Once the GLO is established, a formal Group Register will be set up. This Register will contain the details of each individual claimant in the action. However, not every claimant will need to go to court. Instead, the group action will proceed to trial via a lead case (also known as a test case). All claimants on the Group Register will be bound by the outcome of this lead case.
The LMA explains that there are risks involved in pursuing claims in a collective manner. Ensuring confidentiality when there are lots of people involved is one such risk.
As such, the LMA explains that we (as their lawyer) may exercise a degree of judgment when communicating with the group to ensure that sensitive information does not end up in the public domain (and, therefore, hurt the group action case).
It also places some specific obligations and responsibilities on claimants. Both in relation to their single claim and to the group as a whole. For example:
Not sharing confidential lawyer advice and documents with people who are not involved in the group action.
Not discussing the case on social media (or other public platforms).
Agreeing that their specific case details can be used to support the group action where the lawyer believes it would be beneficial to do so. This could involve sharing information and documents relating to an individual with other claimants.
Keeping confidential any information and documents relating to any other claimant.
Maintaining this confidentiality, even if they leave the group action.
Should a claimant breach the confidentiality of another individual, the lawyer cannot be held liable for breach of solicitor-client privilege.
With a group action, everyone has a common goal. And, the LMA binds everyone to act in good faith to ensure there are no delays or damage to the group as a whole. This means that each claimant must:
Promptly co-operate with their lawyer or the committee when asked to do so.
Be willing to consider all legal remedies on the advice of their lawyer (e.g. to accept a settlement or go to court).
Not do anything that might be detrimental to the shared common interest.
Not exaggerate or lie about their claim.
The LMA provides information on the potential costs involved in the group action. To clarify:
If we win your case, the only charge you will pay is our success fee as this is not recoverable from the defendant in this type of litigation.
If we lose your case, you will not have to pay a penny.
There are no hidden charges or other administration fees.
If you leave the action after proceedings have started, you will be responsible for your share of the common costs up to that date and may be liable for part of the defendant’s costs too.
The LMA provides information on the potential settlement of claims. It explains that:
To successfully settle a case, information about one claimant might have to be shared with the defendant and/or other claimants.
All claimants will be made aware of any offers to settle any individual’s claim.
At the pre-action phase, or after the commencement of proceedings, the settlement of all claims will be dealt with as a group.
Your lawyer, after consultation with the committee, is permitted to make or accept offers to settle claims on behalf of claimants.
Each claim is unique. So every single person will not get the same amount of compensation
Your lawyer will establish what a fair settlement for each claimant looks like. Your lawyer will then allocate funds based on this assessment on a pro-rata basis.
The total compensation awarded will be kept private between your lawyer, and the committee.
Absolutely! The LMA helps us to manage the common aspects of the claim on behalf of the entire group (and to ensure a hassle-free claim process). But we remain on hand to discuss your case.
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KP Law is a founding member of the Collective Redress Lawyers Association (CORLA). CORLA aims to improve access to justice for claimants by way of collective redress.
