Hausfeld for the challenge
Anthony Maton, Vice Chair and London Managing Partner at Hausfeld recently shared his views on the UK collectives market with Disputed.io.
What are your thoughts on Merrick and the future of the collective regime?
Clearly, post-Merricks the CAT collective regime is ready to take off. There is now clarity around the threshold to creating a group. In basic terms, a firm can sign up a class representative and file for an application. This - and notwithstanding Brexit - has put London London back at the centre of competition claims.
But will a lower threshold lead to more vexatious claims?
Absolutely not. This is a good development for the sector and particularly consumers. Remember, a lot of due diligence takes place before any law firm can take on these types of claims. It's not something that is done on a whim. No party wants to press ahead with a vexatious claim. Litigiation funders are often putting a lot of capital at risk and will only received their reward once the claimants have been paid so, understandably, they only want to back meritorious claims.
What impact does this have for corporations?
There may be corporate concerns but if a business abides by the law, they have nothing to fear. Companies which breach the law need to be held to account and paying compensation is one way of doing so. The fines from regulators may look large, but they are always smaller than what corporates have gained from the bad behaviour, and these fines do not compensate those who have effectively lost out. If the fines are less than what they made as a result of bad behaviour, there is no deterrent to stop.
The other large case on everyone's lips is Lloyd v Google LLC. Whilst we wait on judgment, what is your take?
The hearing in the Supreme Court was difficult to read. I think it's likely to find that a 19.6 claim is valid. Without it, it will be difficult for an individual consumer who has suffered from data misuse to make a claim.
Will this lead to a flood of data protection claims?
It's hard to say. Similar cases that are progressing have focussed on deliberate data misuse rather than where corporates have taken steps to prevent misuse. Where the latter happens, it will be harder to bring cases - especially those that are funded - as the level of compensation will be hard for funders to secure approval to finance such claims. There is also a question of the ethical issue - where a business has implemented all steps necessary and yet is still targeted, should they face the same punishment as those corporates who proactively take part in illegal behaviour?
If there is an increase in group actions generally, do you think the UK legal sector is prepared for this?
Group actions bring challenges and without the useful and efficient use of technology, you lose lots of lawyer time which ultimately impacts the reward for the claimants.
The consumer journey should be easier, and the consumer reward should be greater. This should in turn encourage lawyers to take more risk i.e., working on a contingency basis rather than billable hours. This will ultimately benefit everyone, as lawyers don’t spend time on administrative, repetitive tasks and claimants receive a larger reward.
Should London and the litigation sector here be concerned about competition from Europe?
Competition is healthy, and whilst London may not be the same post-Brexit, it is still a leading litigation hub with a sophisticated legal market and Bench. However, we have always thought that our proposition for our clients should not be limited by geography. You liaise with our clients and find the best solution for them – whether we litigate in Europe, Brazil or Korea. As such, we welcome the developments of collective actions across the world.
What are your future plans for Hausfeld as a firm?
Competition litigation is still at the core of what we do and is very successful for us. However, it's important to develop the firm as a whole and it's important to expand our portfolio in areas that are complementary. Our commercial litigation team has grown over the last few years which was a natural extension for us when we work with so many corporate businesses already. We have also carved a reputation into climate change litigation, as part of developing our environmental practice.
Sounds like a bright future for group actions in the UK and that Hausfeld is one of those firms primed to take advantage of this growing market.