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Last Updated: Monday, 27 June, 2005, 12:46 GMT 13:46 UK
How can 50,000 people go to court?
Stephen Byers
Former Transport Secretary Stephen Byers will appear in the case
Almost 50,000 former Railtrack shareholders are taking on the government in Britain's biggest ever legal joint action? How do so many people go to court?

A grand example of Victorian gothic architecture, London's Royal Courts of Justice would nevertheless struggle to accommodate all the Railtrack claimants.

There are almost 50,000 of them - individuals who bought shares in the former rail infrastructure company following the privatisation of the railways in the 1990s.

Together they represent what's been called the biggest ever "class action" in British legal history, although the term is a bit of American legalese that's not officially recognised in English law.

With class actions in the US, such as that brought against cigarette-makers by former smokers, claimants must opt in to a case to have any hope of winning compensation (or deliberately opt out if they wish to pursue the case individually).

The preferred phrase in English law is "joint action" and such cases are brought by one person, on behalf of many others.

In the Railtrack case, retired engineer Geoffrey Weir is the lead claimant.

Abuse of power charge

Mr Weir is a member of the Railtrack Private Shareholders Action Group (RPSAG) - a private group of former shareholders.

Mr Weir is lead claimant for 47,940 shareholders
Each has paid an average 60 into the fighting fund
They are seeking 157m compensation in total

Like other former shareholders in Railtrack, he found himself out of pocket when the government cut off its subsidy to the company in the autumn of 2001. Since Railtrack, which had been making huge losses, relied on public funds to keep it solvent, the move effectively forced it into administration.

Shareholders were eventually compensated for their lost investment, although this fell short of the 280p that each share was worth when the company folded.

Mr Weir is claiming misfeasance - abuse of public power - as well as a breach of human rights, for confiscation of assets.

But he alone couldn't afford the 2.4m it has cost to bring this case to court (much of that money is in a reserve fund, kept back in case Mr Weir loses and is forced to pay the government's legal costs).

He has relied on the 50,000 or so RPSAG members who have each paid into a "fighting fund". Each members has paid on average 60, although the exact figure depends on the number of shares they held.

Why Mr Weir? A former British Rail employee, he was responsible for encouraging staff to buy shares in the sell-off, and obviously has a in-depth knowledge of the company.


It's also a time-consuming role. As a retiree, he has more time on his hands, says Andrew Chalklen, chairman of RPSAG.

A victory for Mr Weir would set a precedent for all the other aggrieved shareholders. Perversely perhaps, even those who didn't sign up to the RPSAG, and so didn't pay into the fighting fund, could also benefit, says Dr Lars Mosesson, of the Southampton Institute law school.

This gets to the heart of the difference between American "class actions" and English "joint actions".

The American system is exclusionary - in general, only those who pay in to the original action, can get a pay out. Not so under the English system. However, this means there's clearly less incentive to pay into a communal pot in the first place.

The law though operates de facto barriers to "freeloaders" says Dr Mosesson, who may be required to pay the defendants' costs even if they win.


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