Sometimes, the above error message will display when trying to create a new Group in Group Management claiming that the desired Class Name is already in use. This is often a result of an historic class name that has since been deleted trying to be used again.
In such cases, the workaround is to create a group with the desired name+A (eg. RobinsA), then once the group has been created you can press the Action button followed the Edit option. You can then re-enter the desired name for the Group, removing the A (in this example - Robins).
This should allow for the group to remain in existence with the previously ineligible name.
Updated