What is a test case?
Test cases are used to provide a clearer definition of a law, or to assess its validity. They are often used by interested groups or individuals who want to:
- Challenge the lawfulness of legislation or how the legislation is being applied
- Obtain a ruling on an untested point of law
- Overturn or confirm the way of judge has interpreted a law.
Test cases establish legal rights or principles and serve as a persuasive precedent for the future.
Real life test cases
An example that has been in the news recently is the FCA business interruption case, which resulted from the Coronavirus.
The Supreme Court ruled that, among other things, insurance coverage may be available for the partial closure of premises and for mandatory closure orders that were not legally binding.
As such, the overall effect of the ruling is that more policyholders will have valid claims.
This example shows the benefit of test cases. While it was not intended to encompass all possible disputes, the ruling removed the need for policyholders to resolve many key common issues individually with their insurers, allowing them to benefit from a comparatively quick and cost-effective solution to the legal uncertainty in the business interruption insurance market.
How does this relate to PGMBM?
Test cases can also be tried as part of the Group Litigation Order (GLO) procedure. In cases comprising of multiple hundreds of thousands of claimants, it would be impractical for a court to assess each claimant’s case individually.
As a result, what often happens is both sides select a ‘sample’ of the cohort as test cases. These cases are tried and become representative of the full cohort.
As PGMBM’s practice is mainly group litigation, test cases are often under consideration. One example of where they have been used is in the case against Volkswagen.