Court confirms when GLO test case rulings may be disapplied to avoid injustice
The UK Supreme Court has unanimously dismissed an appeal brought by AXA Insurance UK PLC and another claimant, confirming that courts may disapply a Group Litigation Order (“GLO”) test case judgment in exceptional circumstances where applying it would result in injustice.
The judgment, handed down on 27 July 2026 in AXA Insurance UK PLC and another v Commissioners of Inland Revenue and another [2026] UKSC 24, provides important guidance on the operation of Civil Procedure Rule 19.23(1)(a), which allows a court to “order otherwise” so that a judgment in a GLO test case does not bind other claims within the same litigation.
The appeal arose from the long-running Controlled Foreign Companies and Dividend Group Litigation Order, established in 2003 to manage claims alleging that tax paid under certain UK statutory provisions was incompatible with European Union law. The appellants challenged decisions affecting claims relating to corporation tax, advance corporation tax (“ACT”), limitation periods and entitlement to interest.
The central issue for the Supreme Court was the scope of the court’s discretion under CPR 19.23(1)(a). The rule provides that decisions made in a GLO test case ordinarily bind all other claims within the GLO unless the court orders otherwise.
The Supreme Court held that the guiding principle when exercising this discretion is the avoidance of injustice. However, it stressed that the discretion is not broad and should only be exercised where there is an exceptional quality to the circumstances. The Court explained that the purpose of the GLO regime is to promote the efficient and economical resolution of multiple claims raising common issues while supporting access to justice.
For solicitors involved in group litigation, the judgment provides a clear practical test. Where a party argues that a previous GLO test case should no longer bind other claims because later authority has shown the legal reasoning to be wrong, courts must balance the benefits of finality and efficiency against the injustice of determining claims using legal principles now known to be incorrect. Relevant considerations include whether disapplying the earlier judgment would create further lengthy and costly proceedings, whether claimants suffered any unfairness because they were not selected as the test case, and whether either party made tactical decisions in the original litigation before later seeking to avoid its consequences.
Applying those principles, the Court agreed with the Court of Appeal that the Prudential test case ruling on the Set-Off Issue should not bind GREA’s claim. The earlier decision had relied on the House of Lords’ judgment in Sempra Metals Ltd v Inland Revenue Commissioners, which was subsequently overturned by the Supreme Court in Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners [2021] UKSC 31. The Court held that requiring HM Revenue & Customs to meet claims worth many millions of pounds where no legal basis now existed would amount to a serious injustice. It concluded that GREA’s claim should instead be determined under the law established in the later Supreme Court authority, which held there is no restitutionary claim for recovery of money paid under a mistake of law in these circumstances, leaving only a statutory entitlement to simple interest.
The Court also rejected AXA Insurance UK’s arguments on limitation. It found that the Prudential test case had never determined, as a common GLO issue, when the limitation period under section 32(1)(c) of the Limitation Act 1980 begins to run. As a result, there was no binding GLO determination on that issue. Instead, the applicable law remains the Supreme Court’s earlier decision in Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners [2020] UKSC 47, which held that the limitation period starts when taxpayers could reasonably have realised they had a worthwhile claim that the tax regime was unlawful.
The unanimous judgment was given by Lady Rose and Lord Richards, with Lord Hodge and Lord Hamblen agreeing, while Lord Leggatt delivered a concurring judgment.