Last month, Meta settled out of court for over $17 billion in a landmark case brought by 48 US states. State attorneys alleged that Meta knowingly created addictive products for teenagers, which damaged mental health and led to anxiety, depression and suicide. This was alongside allegations of children’s data privacy violations, in breach of federal and state law. The UK government has just announced the “world’s strongest” online child safety laws, and Meta is consistently at the forefront of this discussion. The payout has made international headlines, with Meta settling after just five days in court, avoiding hefty legal expenses on both sides. Many are now asking the question: could a similar case be brought in the UK?
Establishing a Group Litigation Order
In short, serious roadblocks stand in the way for potential claimants looking to bring collective actions against social media giants in the UK.
Collective actions, besides those relating to competition, are typically dealt with through Group Litigation Orders (GLOs). These are opt-in, as opposed to US class actions which are opt-out. Each individual claim must be verified in a GLO, which quickly balloons the administrative casework required for the claim, and therefore the cost.
In taking social media giants to court for claims of damaged mental health, potentially each claimant must be assessed by an expert witness before they can be included in the group. Health-related GLOs typically claim a specific adverse effect of an isolated cause – such as pollution from a factory across a defined area. Cases are therefore whittled down to those with the clearest common thread, where certification as a group claim is most likely.
A claim that children’s mental health has been affected by social media is therefore harder to bring together in a GLO, not least because a claimant’s use of several social media sites may make it difficult to prove that the defendant was at fault. A case that is likely to see the inside of a courtroom in the US may therefore not be certified in the UK.
The potential weakness of the GLO, given the variability of cases, would open the door to delay by Meta, or a similar defendant. In Abernethy & Ors v Barclays Bank UK PLC & Ors, the GLO was rejected on the basis that “fact-sensitive, individualised assessments” were incompatible with a GLO. One could imagine a similar proceeding at the very least being brought against a potential GLO.
Alternative routes
Taking a case to the Competition Appeal Tribunal (CAT) has been posed before as an alternative to a GLO. Collective proceedings before the CAT are opt-out by default, overcoming the issues related to gathering claimants seen in GLOs. However, bringing Meta into the CAT would involve changing the scope of the case from the US suit. Claims brought before the CAT need to involve clear financial loss. The UK has no legal route to bring forward an opt-out collective action claim on the basis of non-financial damage such as compensation for personal or psychological injury.
Similarly, the potential for a representative action pursuant to CPR 19.8 is unlikely to succeed where the courts (such as in Lloyd v Google) have repeatedly emphasised that claims requiring individualised proof or assessment of damages are unsuitable for a representative action.
In April, the Law Commission announced plans to consult on a consumer class action regime – moving closer to the US-style. Bringing in opt-out claims would enable cases to move faster, and companies to be more easily held to account. However, it would be years before this regime became operational, if approved, and so those looking to replicate the Meta case would likely not view this as a viable option.
Finance
Besides the challenges involved in obtaining a GLO, the sheer cost of bringing forward a claim could prevent action in the UK. The difference in financial firepower is stark - individual families would be up against the multibillion-dollar behemoth of Meta. While US state attorneys led the charge in the US, Crown prosecutors lack the same powers and regulators lack the relevant resource to bring a similar case.
The cost of compiling a claim alone can be prohibitive. This is exacerbated by the potential scope of the claim, where filtering through claimants would involve a high administrative burden as discussed.
Even if a claim were certified, litigation itself is notoriously expensive. Claimants would be looking at sourcing expert witnesses, facing delay tactics from Meta and coming head-to-head with world-leading lawyers on a contentious and unclear area of law. It is clear to see how costs would sky-rocket. What’s more, claimants could be left on the hook for Meta’s legal costs should the case be ruled against them – a threat unique to legal systems such as England & Wales where the ‘loser pays’ principle applies. After-the-event (ATE) insurance can be helpful in this regard, providing insurance to pay the other side’s legal costs in the event of a loss. Claimants’ financial risk is decreased, particularly in a case where litigation is nearly inevitable. Exposure to hefty legal fees naturally leads to a reluctance to litigate, and so ATE insurance opens up justice to a broader range of claimants.
While Meta settled in the most recent case, defending claims is a part of reputation management – and so the same result cannot be expected in every case. Claimants must approach court expecting to fight a full case, and therefore access to funding eliminates one of the most challenging barriers.
To bring the case in the UK, one option would be litigation funding. Third-party funding enabled sub-postmasters to fight the Post Office Horizon case and has been a key tool to provide access to justice where capital is otherwise lacking. In addition, in the recent CAT ruling against Apple, the opt-out collective claim was backed by third-party funding, bolstering the case for litigation funding’s role in making justice accessible to all. With the Government set to reverse the effects of PACCAR, which banned damage-based models and forced funding agreements to change, there is a refreshed appetite to back meritorious cases in the UK.
The most obvious benefit of litigation funding is that it allows a case to be brought without leaving claimants financially vulnerable. But beyond capital, taking on an external backer would provide any claim with an extra layer of scrutiny. With the potential Meta case having such a wide scope, and a large range of potential claimants, taking a more critical look at the case being brought would increase the chances of specific claims withstanding scrutiny in court.
A route to litigation
While the issues raised in the US can no doubt be identified here, the legal framework needed to bring a case to fruition is lacking. Compiling a GLO of this scale, with such a broad potential scope of damages – particularly non-physical and non-financial – has not been seen in the High Court, nor is there a suitable mechanism for it.
Should the UK want to provide justice through the courts, the Law Commission’s upcoming consultation on a new consumer class action regime must be taken seriously. Through larger opt-out claims, companies can be better held to account.
The funding barrier remains high, but, once again, reform is on the horizon. Legislation to protect and regulate litigation finance would provide consumer claims with the backing needed to take on a business of significant scale, such as Meta, in court. This would open up justice to a wider range of the population, protecting consumers across the board.
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