Ministers pressed to retain key legal safeguards for UK citizens and SMEs
Today we called on the Government to protect the UK’s innovative collective actions regime as the Department for Business & Trade (DBT) conducts a review of the legal framework which provides redress for consumers and small and medium-sized enterprises (SMEs) affected by anti-competitive business practices.
In a letter to the new Secretary of State for Business and Trade, Rt Hon Peter Kyle MP, the firm said the regime is an essential part of the infrastructure sustaining civil justice and fair markets, and that any move to restrict what are known as opt-out claims or weaken funding would remove the only practical means for consumers and SMEs to hold powerful companies to account and to challenge anti-competitive behaviour.
The current framework allows for adverse findings made by regulators against powerful interests - such as big tech, water and train companies - to be translated into enforceable claims, securing meaningful sums for victims and forcing companies to change their behaviour. Claims can also be brough on a standalone basis, recognised by the CMA and other regulators as a valuable complement to regulatory enforcement.
Opt-out claims, which were introduced in the 2015 Consumer Rights Act, themselves further improve access to this type of redress by making potential class members automatically eligible for a payout. The system levels the playing field between everyday consumers and SMEs on the one hand, and the corporates who wield vast financial power. Unlike regulatory fines, which barely register on big business’ balance sheets (and never reach those harmed), collective actions are part of a system that delivers both redress and deterrence.
In the letter, Anthony Maton, Global Co-Chair at Hausfeld, writes:
“To take one example, this was borne out very clearly in Alan Bates’ now-famous case against the Post Office. Without it, corporations know victims cannot afford to challenge them. Collective actions regimes are what make justice for consumers and SMEs possible. Limiting these mechanisms is not consumer protection - it is shutting the courthouse door.”
A number of early claims have already secured compensation for consumers and small businesses, exposed serious anti-competitive practices, and forced changes in corporate behaviour across multiple sectors. They ensure there is a cost to companies that abuse the rules, while reinforcing a level playing field for those that compete fairly.
DBT’s review, and any potential dilution of the regime, also runs the risk of ignoring the judge-led Civil Justice Council’s recent report into litigation funding, a core component of the collective actions regime, which recognised the key role that funding plays in access to justice and recommended only light-touch regulation of the framework to enable it to continue to evolve into a core part of our civil justice system.
Lesley Hannah, Partner at Hausfeld, said:
“The ability to bring opt-out claims has levelled the playing field between powerful corporates and the consumers and small businesses they sometimes unfortunately exploit. The Civil Justice Council has recommended improvements to the funding regime, which are about retaining and reforming what is still a relatively new system, and one that is integral to consumer redress. Weakening it and restricting access to justice would hand power back to the very companies it was designed to hold to account.”
In its letter, Hausfeld cautions the Secretary of State not to be swayed by lobbying from groups backed by large corporate interests, including US tech firms, which seek to dilute accountability while presenting themselves as consumer advocates. Instead, government should focus on reforms that pay victims faster and strengthen confidence in the system, says Hausfeld.
Indeed, the review as it stands appears to run counter to the Government’s strategic steer to the CMA, which explicitly links competition, consumer protection and investment to the UK’s economic growth agenda. The steer calls for regulatory action that is predictable, transparent and proportionate, focusing on harms that affect UK consumers and businesses, and using tools that enhance rather than hinder investor confidence. Weakening the collective actions regime would risk undermining those commitments and sowing uncertainty in markets the Government is seeking to strengthen.
“A credible collective actions regime is an asset to the wider UK economy. By punishing misconduct and rewarding compliance, it creates markets where responsible businesses can thrive and innovate. Far from deterring investment, a strong regime makes Britain more attractive to global capital that values fair and predictable competition, including sanctions against those who break the rules.
“With the EU expanding collective redress, and the US, Canada and Australia having robust collective regimes, the UK cannot afford to fall behind. Protecting the regime sends a clear signal - to global markets and to Big Tech - that Britain is not a playground for exploitation or misconduct but a market for opportunity, innovation and growth.
“Protecting the regime is about more than compensation. It is about ensuring fairness in the market, accountability for misconduct, and confidence for investors. Weakening it would hand a win to vested interests; strengthening it would show that Britain backs consumers, SMEs and responsible businesses alike.”
About the DBT review of the UK collective actions regime
As part of its review into the opt-out collective actions regime, the Department for Business and Trade opened a call for evidence, including 31 questions, on 6 August 2025. The call for evidence will close on 14 October 2025.
Currently lobbying against the regime is the so-called “Fair Civil Justice” campaign. The group was set up by the US Chamber of Commerce’s Institute for Legal Reform and has ties to American Big Tech firms. Its director is Seema Kennedy, a former solicitor and Conservative government minister. The key arguments in favour of retaining the regime are:
- Access to justice: The regime is the only practical mechanism for consumers and SMEs to recover losses arising from breaches of competition law that are too small to pursue individually but transformative when aggregated. Without it, victims are left without redress and misconduct goes unchallenged and unchanged.
- Holding corporates to account for misconduct: Collective actions make corporate abuse financially unsustainable. They ensure that companies profiting from overcharging or anti-competitive practices face real consequences, while compliant businesses benefit from fairer markets. Protecting the regime sends a clear signal - to global markets and to Big Tech - that Britain is not a playground for exploitation or misconduct.
- The regime fosters stronger competition and innovation: By punishing misconduct and rewarding compliance, the regime underpins fair competition. This fosters innovation, protects responsible businesses, and makes the UK a more attractive destination for global investment.
