Opting in or opting out in class action proceedings : from principles to pragmatism?
| Record Number | dejure_v50_n1_a5 |
| Pages | 60-89 |
| DOI | 10.10520/EJC-8db071af1 |
| Author | Estelle Hurter |
| Published date | 01 July 2017 |
| Date | 01 July 2017 |
60 2017 De Jure
Opting in or opting out in class action
proceedings: from principles to
pragmatism?
Estelle Hurter
BA LLM LLD
Professor of Law, Department of Criminal and Procedural Law, University of South
Africa.
OPSOMMING
Intree of uitree in klasaksie-gedinge: van beginsels na pragmatisme?
Die groepsdefinisie is een van die belangrikste aspekte van ’n
groepsgeding. Nie alleen is hierdie definisie deurslaggewend ten aansien
die bepaling van lidmaatskap van groep nie, maar is ook bepalend ten
aansien van die kennisgewing aan die potensiële lede van die groep wat
hulle moet inlig aangaande die groepsgeding en hulle in staat moet stel om
te besluit om deel te hê aan die groep of nie. Hierdie artikel ondersoek die
twee gebruiklike metodes (die sg ‘opt-in’ en die ‘opt-out’ model) in gebruik
in sekere gemeneregjurisdiksies wat dien as meganisme om die
samestelling van die groep te bepaal. In die proses word aandag geskenk
aan die komplekse afweeg van fundamentele prosesregtelike beginsels en
beleidsoorwegings wat in die gedrang kom by die maak van die keuse. Die
Suid-Afrikaanse groepsgedingbestel is nog nie volledig ontwikkel nie, en
gevolglik word daar hiermee gepoog om ’n bydrae te lewer in die soeke na
die mees geskikte model vir Suid-Afrika.
1Introduction
The manner in which a class is defined determines class membership.
The class definition is, therefore, of utmost importance in class action
proceedings, as not only will the class action judgment be binding on all
those individuals who have been described or defined as members of the
class, but it will also determine how the requisite notice to potential
members should be framed, informing them of the class action to enable
them to decide to either remain in the class or to opt out, or where
applicable, to actively take steps to become part of the class (opt in).
Although there are many aspects regarding the class definition (such
as over-inclusiveness and the moment of class closure) that are
problematic and worth exploring separately, the focus of this article is on
How to cite: Hurter ‘Opting in or opting out in class action proceedings: from principles to pragmatism?’
2017 De Jure 60-89
http://dx.doi.org/10.17159/2225-7160/2017/v50n1a4
* This article is based on work supported financially by the National Research
Foundation. Any opinion, findings and conclusions or recommendations
expressed in this material are those of the author and therefore the NRF
does not accept any liability in regard to them.
Opting in or opting out in class action proceedings: from principles to pragmatism? 61
the method or choice of model to be used to determine class
composition. Even a cursory review of international literature reveals
that the debate surrounding the opt-in and opt-out option in the various
class action regimes is far from settled. So for example, although federal
class actions in America follow the opt-out model, critics favour the opt-
in model, while Britain’s opt-in Group Litigation Order seems set to be
challenged by the Consumer Rights Act 2015.1 Past debates have been
spirited and partisan, and have often been used as opportunities to revisit
the bimodal debate2 over the class action procedure itself and to
continue its vilification.3
More recently the question regarding the feasibility of a common
ground (thus a move away from the bimodal position regarding the
opting mechanism), was raised,4 and a hybridised form thereof was put
forward. Although this suggestion is not novel (the existence of numerous
mechanism configurations has been acknowledged in the past),5 it could
re-ignite the American debate. Whether such debates will merely remain
ongoing debates, or whether they could be harbingers of an actual
reconsideration of the option mechanism to be employed in some
jurisdictions, the timing is fortuitous. The South African class action is still
developing and the option mechanism has so far only fleetingly received
attention.6 An analysis of the bimodal approach is thus warranted, and
could contribute towards the further development of our class action
procedure.
The focus of this article is not the debate regarding which one of the
two options is superior (that debate which includes lengthy lists of
perceived pros and cons has been waged eloquently by erudite and
eminent scholars in the field), but is rather the attempt to establish what
considerations should inform the selection of the most appropriate
option for the developing framework regulating the South African class
action regime. Part 2 of this article provides an explanation of key
concepts as well as an outline of the models currently available in some
common law jurisdictions such as the United States, Canada and
Australia. (Although Britain does, strictly speaking, not have a class
action, the British position will be included here due to certain relevant
1 The launch of the first United Kingdom opt-out class action under this Act
has taken place in March 2016: see Shearman & Sterling LLP client
publication ‘Launch of first UK opt-out class action’ 11 March 2016 available
at http://www.shearman.com/en/newsinsights/publications/2016/03/launch
-of-first-uk-opt-out-class-action-AT-031116.pdf (accessed 2016-08-10).
2 The class action is either supported or rejected.
3 See eg Redish Wholesale justice: constitutional democracy and the class
action lawsuit (2009) 174-175231.
4 See Dodson ‘An opt-in option for class actions’ 2016 Michigan Law Review
171.
5 See Mulheron ‘Opting in, opting out, and closing the class: some dilemmas
for England’s class action lawmakers’ 2010 Canadian Business Law Journal
376 379-401 where she discusses some ten potential models.
more recently Nkala v Harmony Gold Mining Co Ltd 2016 5 SA 240 (GJ).
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