Commission Recovery Ltd v Marks & Clerk LLP & Anor

The same-interest requirement for a representative claim is satisfied where the represented persons share a common issue and no conflict of interest prevents the representative from protecting their interests. Separate causes of action, individual defences and unresolved questions of liability or quantum do not preclude representative determination of the common issue.

The court may adopt a bifurcated process, deciding common questions first and leaving individual matters to a later stage. A class must be defined by objective criteria rather than by the outcome of the claim. When exercising its discretion under Civil Procedure Rules 1998, Rule 19.8(2), the court should give effect to the overriding objective. It should not prevent an arguable, funded representative claim merely because later recovery may require class members to participate.

Commission Recovery Ltd, as assignee of a former client of Marks & Clerk LLP, alleged that undisclosed commissions paid by a renewal-services provider to Long Acre Renewals constituted bribery and breaches of fiduciary duty. It brought the claim for itself and as representative of current and former clients who had contracted on Marks & Clerk LLP's standard terms and in respect of whom commissions had been paid during the defined period.

Robin Knowles J dismissed applications to strike out the representative pleading and to direct that the claimant could not act as representative: [2023] EWHC 398 (Comm). The defendants appealed. The central questions were whether the class members had the same interest under Rule 19.8, whether individual facts had to be pleaded, and whether the court should exercise its discretion to prevent the representative claim from continuing.

1. Appeal dismissed. The class members had the same interest for the purposes of Rule 19.8(1). Their claims raised a common question: whether contracting on the standard terms and payment of commission were sufficient to establish liability, subject to disclosure, informed consent and limitation, or whether liability depended on the individual retainer, reliance and knowledge of market practice. Resolution of that question would benefit every class member.

2. A common issue need not determine every aspect of liability. Representative proceedings may determine common questions of law or fact while leaving individual issues, including issues affecting liability, limitation, relief or quantum, to a later stage. It was immaterial that only some class members might ultimately obtain compensation. Separate causes of action were likewise no obstacle.

3. There was no relevant conflict within the class. Success on the claimant's core proposition would assist every member. A member who might additionally rely on an actual referral or introduction merely had a divergent interest, because advancing the representative case would not prejudice that member. Any possible conflict concerning election between remedies arose only at a later stage.

4. The class was defined by objective facts: a direct contract on the standard terms and a commission payment within the specified period. Membership did not depend upon establishing liability. The class therefore lacked the circularity identified in Emerald Supplies. A possible factual dispute about whether a particular person met the criteria did not invalidate the definition.

5. The pleading was sufficient. No useful purpose would be served by pleading the individual facts of every class member before determination of the common issue. Whether individual pleadings would later be required depended upon the outcome of that issue and the matters remaining for decision.

6. The court declined to direct under Rule 19.8(2) that the claimant could not act as representative. The claim was arguable, commercially funded and not clearly futile. The court should be slow to prevent such litigation merely because individual participation might eventually be needed to obtain monetary judgments. The overriding objective favoured representative determination where practicable. Nugee LJ gave the judgment; Snowden LJ and Sir Geoffrey Vos MR agreed.

1. Court of Appeal (Civil Division): The defendants' appeal was dismissed by [2024] EWCA Civ 9. The representative claim was permitted to continue.
2. High Court, Commercial Court: Robin Knowles J dismissed the applications to strike out the relevant pleading and to direct that the claimant could not act as representative: [2023] EWHC 398 (Comm).