A recent High Court decision illustrates the complexities that can arise in determining the effect a decision in a test case will have on all the other claims pursued under a group litigation order (or “GLO”): Axa Sun Life Plc v Commissioners of Inland Revenue [2023] EWHC 944 (Ch).

The purpose of a GLO is to enable the court to determine the common or related issues that arise in multiple similar claims, known as the “GLO issues”, more efficiently and cost effectively than if the claims were dealt with individually. With that aim in mind, CPR 19.23 (formerly 19.12) provides that where a GLO has been made, a judgment or order in a claim on the group register in relation to one or more GLO issues is binding on the parties to all other claims on the group register at that time, unless the court orders otherwise.

However, where the court determines GLO issues through the use of sample or test cases, it is not always straightforward to discern precisely what impact the court’s decision will have on the other claims under the GLO. A distinction may be drawn for these purposes between issues which are truly common, in the sense that they apply in precisely the same way to all the claims – eg whether a product supplied by the defendant was defective – and those which are common or related in a looser sense. A classic example in this latter category is limitation, as it is often included among the GLO issues but its determination will often vary at least to some extent by reference to individual circumstances.

The decision in the present case underlines the importance of ensuring that the GLO issues are properly and adequately defined, before the court tries any test claims, so that it is clear what the judge is deciding and disputes do not later arise as to the broader impact.


The judgment was given in the context of the CFC and Dividend GLO, which was established in 2003 and relates to claims for the repayment of corporation tax and/or advance corporation tax which was levied by the UK in contravention of EU law, and was therefore paid under a mistake of law. It is now settled law that, in principle, taxpayers are entitled to a restitutionary remedy, but quantification and limitation issues relating to the claims are still to be determined.

Under s.32(1)(c) of the Limitation Act 1980, the limitation period for a claim based on a mistake does not begin to run until the claimant has discovered the mistake or could with reasonable diligence have discovered it (referred to as the date of “constructive discovery”). In a decision in 2006, Deutsche Morgan Grenfell Group plc v IRC [2006] UKHL 49 (“DMG”), the House of Lords held that the date of constructive discovery was the date of the judicial ruling that established the unlawfulness of the relevant UK tax provisions. However, DMG was overruled by the Supreme Court in November 2020 in a decision in the Franked Investment Income Group Litigation (“FII SC2“) (considered here), which held that the date of constructive discovery was the date the claimant discovered, or could with reasonable diligence have discovered, that there was a “worthwhile claim”.

In 2014, before DMG was overturned by FII SC2, the High Court (Henderson J) gave judgment on limitation issues in two test claims under the the CFC and Dividend GLO. The question then arose as to the effect of Henderson J’s judgment and order on other claims in the GLO.

The relevant GLO issue, as defined in a schedule to the GLO, asked from what date the applicable limitation period started to run in a claimant’s claim for restitution for mistake of law. However, the list of GLO issues agreed by the parties in the run-up to trial, which was annexed to Henderson J’s order asked, under the heading “VIII. LIMITATION“:

  1. To what extent is the claim statute barred by a 6 year limitation period?
  2. To what extent is the claim for recovery under a mistake of law barred by section 320 FA 2004?

By s.320 of the Finance Act 2004, referred to in issue VIII.2, Parliament had sought to limit the ability of taxpayers to rely on s.32(1)(c) of the Limitation Act in claims made after a particular date, and their ability to amend existing claims. At the time the test claims came before Henderson J, there was a live question as to the validity of s.320, so his judgment addressed the limitation issues both on the basis that s.320 was valid and on the basis that it was invalid. However, before Henderson J’s order was made following on from the judgment, the Supreme Court had held that s.320 was invalid as it deprived taxpayers of remedies in contravention of EU law. Henderson J’s order therefore stated simply that the claims were “not subject to the limitation period in section 320 of the Finance Act 2004 and are in time”.

The claimants in the present application asserted that the effect of Henderson J’s judgment and order was to determine that their claims were all in time. The defendant argued that the formulation of the limitation issues meant that Henderson J could not have determined them as GLO issues, and was necessarily determining only issues relevant to the test claimants. To the extent he did determine the issues as GLO issues, the defendant argued that the binding effect of his determination should be disapplied under CPR 19.12.


The High Court (Richards J) held that the claimants’ claims had not been conclusively established to have been issued within the limitation period by reason of Henderson J’s judgment and order. The question of whether the particular claims were in time would need to be determined in accordance with the law as determined in FII SC2.

The judge noted that, with the benefit of hindsight, it was not clear whether issues VIII.1 and VIII.2 (above) were suitable for determination as GLO issues at all. However, he rejected the defendant’s argument that Henderson J was not in fact determining them as GLO issues. It was clear from Henderson J’s judgment and order that he did determine limitation issues as GLO issues, though it was more difficult to assess precisely what GLO limitation issues Henderson J determined.

On a proper analysis, the judge held, Henderson J had not determined the date of constructive discovery for the test claimants’ claims, or that it was no earlier than the dates put forward for that purpose by the claimants. Neither the judgment nor the order set out any date of constructive discovery, and Henderson J was not asked by issues VIII.1 or VIII.2 to determine any such specific date.

The judge observed that his task was not to identify a plausible basis on which Henderson J might have given his judgment or made his order. As he put it:

“A determination of a GLO issue is, on the face of it, binding on other claims in the GLO at the relevant time. GLO members need to know whether decisions are binding on them so that, if adversely affected, they can exercise their right in CPR 19.12(2) to request permission to appeal.”

The judge concluded that Henderson J had done as requested in the parties’ formulation of issues VIII.1 and VIII.2. He had determined, as a GLO issue, the extent to which the test claimants’ claims fell foul of a 6-year limitation period, concluding that their claims were in-time in their entirety.

The claimants’ argued that such a finding could not have much to say about the claims of other litigants in the GLO, possibly with very different facts, when those other litigants were ostensibly bound by Henderson J’s determination of the GLO issues. In the judge’s view, however, this argument relied unduly on hindsight. At the time of Henderson J’s judgment and order, based on DMG, the test for the date of constructive discovery was not particularly fact sensitive, as it depended on the date of the relevant CJEU judgment. There was no reason to think it would require an analysis of when taxpayers could have discovered that they had a “worthwhile claim”: the key question in relation to limitation related to s.320. So it was not surprising that Henderson J considered that a finding that the test claims were in time adequately addressed the relevant limitation issue.

The effect of Henderson J’s decision was to preclude any claimant under the GLO, or the defendant, from taking a position that was inconsistent with the determination that the test claims were in time. In the judge’s judgment, there was no inconsistency in the defendant asserting that the current claimants’ dates of constructive discovery were before the relevant threshold dates, such that their claims were time barred. Even if Henderson J’s order was inconsistent with the test claimants’ date of constructive discovery being before the threshold dates, it did not follow that he determined those as dates of earliest constructive discovery for all claimants in the GLO.

At the time of Henderson J’s judgment the parties would have regarded his findings on the test claims, read together with the judgment in DMG, as providing a framework for determining whether other claims in the GLO were in time. All parties proceeded on the basis that the date of constructive discovery could be fixed by reference to the state of CJEU authorities, rather than by reference to matters particular to each claimant. But the fact that the parties proceeded on that basis did not elevate their approach (now shown to be incorrect in law) into the determination of a GLO issue that was binding in other claims in the GLO.

Alan Watts
Alan Watts
Partner, global co-head of class actions
+44 20 7466 2076
Gregg Rowan
Gregg Rowan
+44 20 7466 2498
Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608