Bank of America v. Taylor

Ever since the Court of Appeal’s decision in Markt & Co. Ltd. v. Knight Steamship Co. Ltd.,1 the courts of most common law jurisdictions have been struggling to determine principles to guide the proper application of representative actions in cases involving separate contracts either between numerous claimants and the one defendant or between a single plaintiff and numerous potential defendants. Markt represented the nadir of jurisprudence governing use of the representative action, an important procedural mechanism permitting the avoidance of litigation of numerous actions involving common issues and a common party. According to the approach adopted in Markt, a representative action would not usually be permitted in cases dealing with separate and individual contracts (apart from the traditionally recognized derivative actions by shareholders, or actions by creditors in disputes involving common funds, or common property), largely because of the court’s willingness to assume, without evidence, the likelihood of separate defences being raised were each claim to be prosecuted individually.2