How to Bring a Class-Action Lawsuit in Singapore
What is a Class-Action Lawsuit or “Representative Proceeding”?
If you are thinking about bringing a class action lawsuit in Singapore, you are in a rather unusual position.
Class actions are intended to remedy a situation where a large number of people have been wronged in the same way by the same person. The class action, as it is commonly understood, is really a creature of U.S. law and the concept does not necessarily translate directly to concepts in other legal systems.
In Singapore, the closest equivalent is called a “representative proceeding”. In practice, representative proceedings seldom happen in Singapore. There have been only a handful in Singapore’s history, but they are theoretically possible under certain circumstances.
This article will explain:
How Representative Proceedings Work in Singapore
In Singapore, a representative proceeding essentially allows one or more people to represent a larger group of people in a suit against another party. Anyone can just file a representative proceeding, in the same way one would file any proceeding in Singapore. However, the difference is that they would claim to represent a large group of people instead of just themselves.
A person need not obtain the consent of the other claimants (i.e. the parties bringing the claim), whose interests he claims to represent at the outset, before including them as a claimant in the representative proceeding.
However, if the defendant (i.e. the party against whom the claim is brought) objects to the representative proceeding on the basis that the representative does not have the same interest as the other claimants he claims to represent, the court may dismiss the suit. It will do so if it is not satisfied that everyone in the group of potential claimants has the same interest in the matter.
If the suit does go ahead, however, then an individual claimant who does not want to be involved in the suit would need to opt out.
In this regard, representative proceedings are similar to the average class action in the U.S. Unlike its Singapore counterpart, however, a U.S. court will need to certify a class and define the parameters of its membership before the class action suit can proceed.
Another difference between the U.S. and Singapore approaches is that in Singapore, unlike in the U.S., it is possible for an individual party to sue a class of defendants without identifying each of the defendants individually. Instead, the claimant would just identify one defendant and have them represent all other similarly situated unidentified parties, in a sort of reverse class action.
That said, any judgment a claimant obtains against a class of defendants can be enforced against a defendant who was not a party to the proceedings only with the court’s permission. This is true for the enforcement of any judgment obtained in a representative proceeding, whether the representative was on the claimant or defendant side.
In this way, the court effectively retains supervisory power over the formation of a class. This is intended to prevent unsuspecting individuals from being prejudiced in any way, by being involved in a lawsuit where their interests were not appropriately advanced and about which they may have known nothing.
How Many People Can be Represented in Representative Proceedings?
There is no maximum limit to the number of individual parties who can participate in a representative proceeding. However, there must be at least 2.
When Might Parties Consider Commencing Representative Proceedings in Singapore?
The scenarios in which parties are most likely to need to commence a representative proceeding are those in which large groups of people have had a similar kind of damage or loss caused to them by the same party.
Examples of this might be:
- A breach of an identical clause in an employment contract by a large employer against all of their employees, or
- A product liability claim against a manufacturer of some product by all the consumers who purchased and were injured by it.
The benefits of bringing a representative action in these circumstances is that the costs of the litigation can be spread out over a large group of claimants. Furthermore, bringing a class action is uniquely useful in scenarios where one party’s claim for compensation might be very small, but economies of scale can make litigation economically feasible for a law firm to commence if thousands of other people have suffered the same damage.
What to Ensure When Commencing Representative Proceedings
If you commence a representative proceeding, you must first ensure that you have standing to do so. In other words, you must have actually been harmed in some legally recognisable way by whatever the defendant did. So must all the other people you represent.
In the case of POA Recovery Pte Ltd v Yau Kwok Seng & Ors, the claimant lost because it failed to meet this requirement. The claimant was a company formed specifically for the purpose of suing the defendants for damage caused to 1,102 investors. Each of these investors had assigned their right to sue to this new company, which then sued the defendants.
However, the company itself had suffered no harm from the defendants’ actions and therefore did not have standing to sue. What the 1,102 investors should have done instead was to choose one of them to commence a representative action in her own name on behalf of all the others.
You must also ensure that you can prove how much damage you and all the other class members suffered. Otherwise, even if you win, you may only get nominal compensation, which can be as little as $100 or even $1. This would mean that in effect you would have lost money after paying legal fees.
This is essentially what happened in the case of Meow Moy Lan v Exklusiv Resorts Pte Ltd, where 170 members of a country club sued the company that owned the club to a new location without their permission.
Although the court found that the move was a breach of the company’s contract with the members, the members were unable to show how the move caused damage to them. Therefore although the members had each sought more than $110,000 in compensation, they were awarded nominal damages of only $1,500 each. This amount was insufficient to cover the approximately $4,000 that each person had contributed to commence the representative proceeding.
It should be clear by now that representative proceedings in Singapore are complex, risky and unpredictable. The limited number of previous court decisions in this area makes representative proceedings even more unpredictable, so it would be difficult to know in advance how likely a representative proceedings case would be to succeed in court.
If you find yourself part of a large group of people who have all been wronged by a company in Singapore, it is advisable to bring the matter to a commercial litigator to determine whether it might be worth commencing a representative proceeding.
A lawyer can begin to assess the viability of a case early on and help you to decide whether the matter is worth pursuing. If it is, the lawyer can put together a claim to file in court for you and the other class members.
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