Representative Action: Definition, Key Jurisdictions, and EU Directive

A representative action is a lawsuit in which one or a small number of parties sue or defend on behalf of a larger group that shares a common interest or claim, with the resulting judgment capable of binding people who were never personally named. The device exists in several forms around the world. In the United States, it is best known as the class action under Federal Rule of Civil Procedure 23. In England and Wales, it operates as a narrower tool under Civil Procedure Rule 19.8. The European Union now runs its own version through the 2020 Representative Actions Directive, and Australia has a mature system of its own. The rules differ sharply from place to place on who may bring the claim, who is bound by the outcome, and what the court can order.

The Core Idea

The concept traces back to the English Court of Chancery. Common-law courts required every materially interested person to be joined as a party, which was impossible when the affected group was large. Equity made an exception: a few plaintiffs could stand in for the many. That exception was the earliest form of representative litigation.¹

In the United States, Equity Rule 48 formalized the practice in 1842 but generally did not bind absent parties to the judgment. Equity Rule 38, adopted in 1912, allowed judgments to bind people who had not personally participated. The 1966 revision of Rule 23 built the modern class action around certification standards, notice duties, and opt-out rights.¹

Every jurisdiction’s version of the mechanism works out the same two tensions in its own way: how much commonality the group must share before one person can speak for it, and how a judgment can fairly bind people who did not control the case.

Representative Actions in the United States

Rule 23 Class Actions

Rule 23 is the dominant American form. A plaintiff who wants to represent a class must show four things: the class is too numerous for ordinary joinder (numerosity), there are questions of law or fact common to the class (commonality), the representative’s claims are typical of the class’s (typicality), and the representative can fairly and adequately protect the class’s interests (adequacy).²

Early in the case the court decides whether to certify the class. If it does, it defines the class and appoints class counsel, who owes a duty to the whole class. For claims certified under Rule 23(b)(3), every identifiable class member must receive notice and the right to opt out, so anyone who affirmatively declines will not be bound. Courts conduct what the Congressional Research Service calls a “rigorous analysis” before allowing a case to proceed on a class basis.²³

Settlements need the court’s blessing. After a hearing, the judge must find the settlement fair, reasonable, and adequate, with specific attention to whether the representatives and counsel adequately represented the class.²

FLSA Collective Actions

Wage-and-hour claims under the Fair Labor Standards Act and age-discrimination claims under the ADEA use a separate mechanism. These collective actions are opt-in: after conditional certification, notice goes out to similarly situated employees, and only those who affirmatively join become parties. The bar for conditional certification is relatively low, but employers can seek decertification later based on what discovery reveals.⁴

PAGA in California

California’s Private Attorneys General Act lets an employee sue an employer for Labor Code violations on behalf of fellow employees, effectively acting as a proxy for the state’s Labor and Workforce Development Agency. PAGA claims do not go through formal class certification, though courts can strike claims they find unmanageable.⁴

Governor Gavin Newsom signed SB 92 and AB 2288 on July 1, 2024, with the changes applying to PAGA notices sent on or after June 19, 2024. Employees must now have personally experienced the Labor Code violations they want to litigate. The penalty split shifted to 35 percent for employees and 65 percent for the state, up from 25-75. Employers gained expanded cure opportunities and reduced penalties for good-faith compliance.⁵

One open question is whether “headless” PAGA claims survive the reforms. These arise when a plaintiff’s individual claim is dismissed or sent to arbitration, but the plaintiff tries to continue the representative portion for other employees. California’s appellate courts have split. The Second Appellate District rejected headless claims in Leeper v. Shipt, Inc. (2024) and Williams v. Alacrity Solutions Group, LLC (2025), while the Fourth and Fifth Appellate Districts have allowed them. Leeper and the related Rodriguez v. Packers Sanitation Services are pending review by the California Supreme Court.⁵⁶

Representative Actions in England and Wales

CPR 19.8

Civil Procedure Rule 19.8 is the formal representative-action rule. It lets one or more persons bring or defend a claim on behalf of others who share the “same interest” in the claim. The court decides who may act as representative, and any judgment binds everyone represented unless the court directs otherwise. Enforcing a judgment against a person who was not a named party requires the court’s permission.⁷

Courts have read “same interest” strictly. The mechanism works cleanly for things like trust beneficiary disputes, where every member of the group has essentially the same stake. It gets harder when the group is large and individual fact patterns, defenses, or damages differ.⁸

Lloyd v Google

The UK Supreme Court’s unanimous 2021 decision in Lloyd v Google LLC set the current limits. Richard Lloyd had sought to bring a representative claim against Google on behalf of over four million iPhone users, alleging unlawful collection of browser data without consent between 2011 and 2012. The court rejected the claim for two reasons. Mere “loss of control” of personal data was not compensable damage under the Data Protection Act 1998 without proof of material loss or distress. And the class members did not share the “same interest” because assessing the nature and extent of the data breach would vary user by user.⁹¹⁰

The ruling largely closed off opt-out representative actions for mass data breach claims. It also signaled that where damages require individualized assessment, representative actions are generally unsuitable. Lord Leggatt’s judgment did leave open a “bifurcated” possibility: a representative action could resolve common issues first, with individual questions dealt with later.¹⁰

Bifurcation Tested: Commission Recovery and Wirral

Two Court of Appeal decisions pushed in opposite directions. In Commission Recovery Ltd v Marks & Clerk LLP (January 2024), the court allowed a representative action to proceed. The claim alleged that an intellectual property firm received undisclosed commissions for referring clients’ IP renewal business. Lord Justice Nugee, writing for a unanimous court, held that the same-interest requirement was satisfied because a common issue existed: whether contracting on standard terms and the payment of commissions established liability for breach of fiduciary duty. Individual defenses like limitation and informed consent could be handled at a later stage. The court drew a line between “divergent interests,” where an issue affects only some class members and is permissible, and “conflicts of interest,” where one member’s success prejudices another and is not.¹¹¹²

In Wirral Council v Indivior PLC and the related Wirral Council v Reckitt Benckiser Group PLC in early 2025, the Court of Appeal upheld a strike-out of representative proceedings brought under the Financial Services and Markets Act 2000. The court rejected a bifurcated approach for securities claims, finding that deferring individual issues like reliance and causation would improperly shift the burden onto defendants and prevent early strike-outs of speculative claims. The court said there is no “automatic right” to proceed under CPR 19.8 even if the same-interest threshold is met, and that existing multi-party procedures were a more appropriate vehicle. It called the claim that representative proceedings were necessary for retail investor access an “artificial construct” engineered by litigation funders.¹²¹³

The combined signal is that bifurcated representative claims may work for straightforward fiduciary-duty cases but face serious trouble in securities litigation, where individual reliance and loss are central to liability.

Other Routes

CPR 19.8 is not the only option. Group Litigation Orders provide an opt-in way to manage large numbers of related individual claims sharing common issues. Competition claims can be brought as collective proceedings before the Competition Appeal Tribunal, the only forum in England and Wales that permits true opt-out mass actions. Multiple joint claims can also be consolidated under a lead claimant or test-case approach.⁸

Funding is a connected issue. The Supreme Court’s 2023 decision in R (PACCAR) v Competition Appeal Tribunal held that many litigation funding agreements could be classified as damages-based agreements and thus unenforceable, which created uncertainty for funded collective claims. In June 2025, the Civil Justice Council recommended that Parliament legislate to reverse PACCAR and move funding regulation onto a statutory footing; as of late October 2025, the government was still considering the recommendations with no announced timeline.¹⁴¹⁵

The EU Representative Actions Directive

Scope and Standing

The European Union adopted Directive 2020/1828 in December 2020, replacing the earlier Injunctions Directive. The new framework entered into application at the national level on June 25, 2023. It covers infringements of EU consumer protection rules across areas including data protection, financial services, travel, tourism, energy, and telecommunications.¹⁶

The EU model departs sharply from the American one on standing. Only “qualified entities” (consumer organizations or public bodies designated by member states) may bring these actions. They must be non-profit, show a legitimate interest in protecting consumers, remain independent of traders or others with an economic interest in the litigation, and publicly disclose funding and organizational structure. Member states must review their designations at least every five years. Individual consumers are not claimants; they benefit from actions brought on their behalf.¹⁶¹⁷

What the Court Can Order

Qualified entities can seek two kinds of relief. Injunctive measures stop or prohibit an unlawful practice, and consumers benefit automatically. Redress measures include compensation, repair, replacement, price reduction, contract termination, or reimbursement. For redress, member states can choose between opt-in and opt-out mechanisms domestically, but all cross-border representative actions must use opt-in.¹⁶

The Directive builds in safeguards against abusive litigation, including a loser-pays costs rule and summary dismissal of weak claims. Third-party funding is permitted where national law allows, but member states must prevent conflicts of interest or diversion of the action away from consumer interests.¹⁷

How Member States Have Transposed It

Transposition was due by June 25, 2023. By mid-2025, 24 of the 27 member states had completed it, with Bulgaria, Luxembourg, and Spain still finalizing.¹⁸ Because the Directive leaves national discretion on many points, results vary.

Germany’s Consumer Rights Enforcement Act (VDuG) took effect in October 2023 and introduced the Abhilfeklage, a redress action brought by qualified consumer associations for the benefit of affected consumers and small businesses. A minimum of 50 affected consumers is required, and the system is opt-in, with registration permitted until shortly before the final hearing. Third-party funding is capped: an agreement promising the funder more than 10 percent of the amount awarded renders the action inadmissible. The redress action sits alongside Germany’s older model declaratory action, the Musterfeststellungsklage.¹⁹²⁰

France took a very different route. A law promulgated on April 30, 2025 replaced five separate sector-specific regimes with a single unified framework for class actions brought on or after May 2, 2025. Standing is restricted to approved associations and trade unions, though non-approved associations registered for at least two years can bring injunction-only actions, qualified entities from other EU member states can act in France, and the public prosecutor can initiate or intervene. France uses an opt-in model. Eight specialized courts handle class actions, courts can dismiss manifestly unfounded claims early, and a new civil penalty for deliberate wrongdoing is capped at twice the profit for individuals and five times the profit for legal entities, with proceeds going to a fund that finances future class actions.²¹²²

The Netherlands’ Act on the Resolution of Mass Claims in Collective Actions (WAMCA) took effect on January 1, 2020, before the Directive. It is unusual in Europe for being opt-out: rulings bind group members who have not opted out during a court-set period. Only foundations or associations with full legal capacity can file, and where several groups file similar claims, the court appoints a single Exclusive Representative to lead. By September 2025, 102 WAMCA proceedings had been brought, averaging 18 per year across areas including privacy, human rights, diesel emissions, and competition.²³²⁴

Ireland’s 2023 act, which became operational in April 2024, permits injunctive relief on an opt-out basis but requires opt-in for damages claims, with consumer entry fees capped at €25.²⁵

Representative Proceedings in Australia

Australia’s federal regime, in Part IVA of the Federal Court of Australia Act 1976, has operated since March 1992. It is unusually accessible. There is no judicial certification: any seven or more people whose claims arise out of the same or related circumstances and share a substantial common issue of law or fact can commence representative proceedings.²⁶

The regime is opt-out. The court sets a date by which group members can opt out, and any settlement or discontinuation needs court approval, with the court having to find the settlement fair and reasonable independently. Loser-pays costs apply, and because lawyers cannot charge contingency fees, class actions are frequently backed by third-party funders who take a share of the recovery.²⁶

The High Court confirmed in BHP Group Limited v Impiombato (2022) that Part IVA allows representative proceedings to include group members who are not Australian residents, provided their claims fall within the Federal Court’s jurisdiction. Defendants may still try to exclude foreign group members through contractual waivers or exclusive jurisdiction clauses.²⁷

How the Systems Differ in Practice

The procedural choices across jurisdictions matter far more than the shared vocabulary suggests.

Who can sue. In the U.S. and Australia, individual plaintiffs lead. Under the EU Directive, only designated qualified entities have standing; individual consumers cannot be claimants.²⁸
Opt-in or opt-out. U.S. Rule 23(b)(3) class actions and Australian Part IVA proceedings are opt-out, binding absent members unless they withdraw. The EU Directive mandates opt-in for cross-border actions and leaves domestic choice to member states. England’s Group Litigation Orders are opt-in, while CPR 19.8 binds represented persons without needing their individual consent.²⁸
Certification. U.S. class actions require it. Australian proceedings do not. The EU Directive does not mandate it in the American sense. California PAGA claims skip it altogether.
Damages. U.S. class actions can seek punitive damages; the EU Directive prohibits them, as does the Dutch WAMCA. Australia allows compensatory but not punitive damages in representative proceedings.
Costs. The U.S. generally follows an “each side pays its own costs” rule. The EU Directive, Australia, and England apply forms of loser-pays, which can deter weak claims and also raises the stakes of filing.²⁸

Where Things Are Heading

U.S. class action activity remains high. A 2026 litigation trends survey reported that 28 percent of U.S. corporate counsel experienced class action litigation in 2025, up from 25 percent the previous year, with cybersecurity, data privacy, and ESG-related claims growing. In federal securities litigation, 207 new class actions were filed in 2025, with aggregate settlements of $2.9 billion and a median settlement value of $17 million, a ten-year high.²⁹³⁰

Mass arbitration has emerged as a strategy to work around class action waivers. The same survey reported that 74 percent of respondents faced mass arbitration fees in 2025, with particularly high rates in food and beverage, financial, and healthcare industries.²⁹

In Europe, the picture is still forming as member states finish implementing the Directive with different procedural choices. The European Commission maintains the EC-REACT platform to coordinate cross-border actions and track the designation of qualified entities across member states.¹⁶ A term that once named a single equity practice now describes a family of mechanisms whose common thread is the ability to resolve many people’s claims at once, but whose details determine whether that is actually possible in any given case.

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