Tom Crawford examines the UK Supreme Court’s first guidance on the power to “order otherwise” under the Group Litigation Order regime

Tom's article was in GRIP, 11 August 2026, and can be found here. 

Introduction

Group litigation orders ("GLOs") exist to bring order to mass claims. GLOs are increasingly relevant to the financial services sector, where mass mis-selling claims and shareholder actions can generate group proceedings. Banks, insurers and asset managers may find themselves on either side of GLO proceedings, as claimants or defendants.

The premise is straightforward: a test case decides common issues and that determination binds every materially similar claim on the group register, sparing the court and the parties from re-litigating the same points many times over. But what happens when, years after a test case is determined, the law on which that case was determined changes?

That question sat at the heart of AXA Insurance UK PLC v Commissioners of Inland Revenue [2026] UKSC, the Supreme Court's first guidance on the power to "order otherwise" under CPR 19.23(1)(a). The decision sets a high bar: there must be "some exceptional quality about the circumstances" before it becomes appropriate for the court to consider exercising this power. Although the facts of this particular case met that threshold, they were so extraordinary that it is important to think carefully before assuming that the door to challenging test case decisions has been thrown open.

The Background: A Twenty-Year Saga

AXA and a number of other claimants, including Prudential, brought claims within a GLO formed in 2003 (known as the "CFC and Dividend GLO") against HMRC, seeking recovery of corporation tax levied in alleged breach of EU law. AXA's claims were stayed while Prudential's proceeded as one of three test cases. The parties and subject matter also underscore the financial services relevance of the case: the CFC and Dividend GLO involved major financial services companies, including AXA and Prudential, and concerned corporation tax, the kind of high-value tax dispute that may affect banks, insurers and financial services groups with complex international structures.

In 2013, Henderson J ruled in favour of the claimants in the Prudential test case. Central to that ruling was the House of Lords' 2007 decision in Sempra Metals, which established the relevant principles on restitutionary remedies.

Five years later, while AXA's claims remained stayed, the legal landscape transformed. In Prudential's appeal of Henderson J's 2013 decision, the Supreme Court overruled Sempra Metals. Further, in 2021, the Supreme Court reaffirmed its earlier decision to overrule Sempra Metals in separate GLO proceedings known as "FII SC3".

By the time AXA's stay was lifted in 2021, the Supreme Court had decided twice that the legal foundation of Henderson J's 2013 ruling was wrong.

Undeterred, AXA sought to enforce that 2013 ruling as a binding GLO determination. HMRC applied for the court to "order otherwise"; in effect, to disapply the test-case result and apply the current, correct state of the law.

The Supreme Court's Approach

The majority confirmed that the discretion under CPR 19.23(1)(a) is narrow. Exercising that discretion on these facts was justified by a combination of circumstances so unusual that they are unlikely to recur. The CFC and Dividend GLO and the FII SC3 GLO intersected in ways that produced cascading legal developments over a decade. In parallel, the CFC and Dividend GLO follower claims were subject to a stay which was lifted after the Supreme Court twice decided that the legal foundation of Henderson J's 2013 ruling was wrong.

Why the Court Exercised its Discretion: The Factors in Favour

Four key considerations drove the majority to "order otherwise":

1. No remaining legal foundation. The legal basis for Henderson J's 2013 ruling had been "definitively rejected" by the Supreme Court twice. It would be contrary to the rule of law to impose an obligation on a party where there is no legal basis for doing so.
2. Serious injustice. It would be unjust to require HMRC to meet claims valued at many millions of pounds on a legal basis known to be wrong. In financial services GLOs, the sums at stake can run into the hundreds of millions or even billions, making the serious injustice factor particularly acute. The public interest in the correct application of tax law weighed heavily.
3. No procedural unfairness. Nothing in the conduct of the proceedings militated against applying the correct understanding of the law. No party had been manipulated; no one had been unfairly prejudiced by tactical decisions in the test case. The follower claimants had not made concessions or been denied opportunities that would make departure inequitable.
4. Extraordinary legal developments. The sheer scale of change over the twenty years since the GLO was formed was of a kind that the framers of the CPR regime could scarcely have anticipated.

The Countervailing Considerations

The Court was careful to identify the factors that weigh against departure and which any future applicant must address:

1. Preserving the purpose of the GLO regime. The entire rationale of group litigation would be undermined if departure were too readily permitted. Certainty and finality are of central importance.
2. Avoiding further costly proceedings. A court must consider whether disapplying the test-case ruling would impose further lengthy and expensive litigation on the party that relied upon it.
3. Fairness to non-test claimants. Was there particular unfairness to follower claimants arising from their non-selection as the test case? Did they have a voice in tactical decisions that now determine their fate?
4. Reliance on tactical concessions. Relatedly, if a party made concessions or procedural decisions during the test case on which others relied, that is a powerful reason not to unpick the result after the event.

Lord Leggatt's Narrower Emphasis

Lord Leggatt concurred in the result but offered a more restrictive framing. For his Lordship, even a material change in the law is not sufficient to justify departure. However, he was persuaded that it was appropriate to order otherwise in this case in circumstances where doing so would not undermine the two key purposes of treating a test case judgment as binding on the other parties to the GLO: namely, avoiding inefficiency/waste of resources and inconsistent outcomes in re-litigating an issue that has already been decided.

Practical Takeaways

The discretion is symmetrical. It is not a one-way street favouring defendants. A follower claimant who lost the test case could invoke the "order otherwise" discretion if the law subsequently moved in their favour. What matters is whether the exceptional threshold is met.

The threshold is high. Both sides should temper expectations. The facts of this case represent the outer boundary of what the English litigation system is likely to produce. In less dramatic cases, the default binding effect of a test case ruling will almost certainly hold.

Monitor the law during prolonged stays. For parties whose claims are stayed behind a test case, this decision is a reminder to keep the wider legal landscape under active review. If the legal basis for the test case reasoning is challenged or overruled, that development is immediately relevant to the stayed claims. Advice should be kept under review throughout.

Financial services firms should treat this as a live strategic issue. Financial institutions, whether as claimants in tax recovery litigation, defendants in mis-selling or market manipulation GLOs, or parties to regulatory-driven group claims, should pay close attention to this decision. GLOs in the financial services sector can be particularly complex, involving prolonged stays, evolving regulatory and legal landscapes, and enormous sums, making the “order otherwise” discretion a live strategic consideration. Financial services businesses should ensure that their litigation monitoring and governance frameworks account for the possibility that binding test case determinations may, in exceptional circumstances, be revisited.