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Today MacDonalds Resorts (MRL), RCI, Club la Costa CLC) and others face group litigation claims. The stark reality is that many timeshare consumers are disgruntled with the products the resorts sold or manage.

Group actions are generally headed by an initial lead group of complainants. The people who formed the group action may have had a desire to avoid or lower their own exposure to legal costs. To achieve their goal, they encourage others to join with them and in pursuit of a remedy to the problem.

The consumer should not join action groups until they are ready to do so and when fully informed of the issues they are challenging.

That said, group litigation may be slow, but are often successful as many people attend to the needs of others.  In short, generally when involved in a group action, people have more support at hand.

The groups are formed and constituted so that rules exist whereby each member is committed to another.

Over time, the original constitution may vary, dependent upon issues and events which later transpire.

In the confines of a group, there can be subgroups who have particular issues to address. These issues might warrant a different approach. In these cases, amendments to the constitutional rules may be required.

The engine and driver to group actions are always vested in the consumers, who instruct and finance the litigation. In some circumstances, the management committee may have a need to choose to elect a funder so that the consumers are at little or no risk of high costs or adverse costs. TESS Law has formed a litigation funding company for such events and funds many clients, either directly or via crowdfunding arrangements. Equally some in the group might elect to fund, whilst others do not. Group litigation can benefit as member numbers could be driven up reducing exposure to adverse costs.

How to commence a group action?

The first objective is to locate other members who are facing similar problems and try and strike a consensus on the issues you all intend to present to the courts.

If others have the same complaints, each can determine and promote the group so that more people can join disseminating equally the costs and obligations, resulting in less individual cost and possible adverse liabilities.

At this point, the group leaders should consult with advisors, so as to frame the group and advertise the issues as well as the opportunity for others to join in. With more members, pre-action funding can be sought, so as to consider credible forward options and risk assessment.

Once the group has received advice and considered it, they can then explore employing a solicitor, manager and advocate.

The group committee must remember that at all times, they are acting as a group and they should know that their duty is to the entire group, not just your own interests.

The formation of the club committee is a very important aspect as it is this committee who will represent the members in all aspects of the forward litigation. You cannot have a committee of 1, it has to exist with a variety of people who can add to the discussions and issue resolving.

Usually, 5 committee members represent the group of people, however the larger the group the larger the committee members. Some groups increase as subgroups are formed. The committee should consist of non-legal minds, as it is the interests of members which is paramount. If there are legal minds and they began to challenge the solicitors on matters, they could break up the group or drive it onto their own agenda and reasoning.

It may be advantageous to encourage a selection of people from a variety of socioeconomic backgrounds, to ensure all members have a voice.

The committee should also have available, non-interest parties so as to receive unfettered counsel. The others ought to be advisors or companies who do not have any financial interest in the outcome.

As you promote the action group membership will either grow, fall or stagnate.

If it grows then you can be assured that others have the same feeling about the issues. On the other hand, if it falls then either the promotion or issues being address are not shared by other potential members and you should consider disbanding or revising the group aims.

Each member ought to consider:-

1)      Can I afford the costs estimates?

2)      Can I afford to expose myself to the adverse cost order risk?

3)      Do I believe in my case?

4)      Have I got confidence in my co-members and committee to look after my best interests?

5)      Are there any other less costly ways to achieve what I want?

6)      Will the action which I am being asked to commit to, satisfy my needs?

Committees should always embrace the wants and needs of its entire membership.

Last modified: 28th August 2020