Warnings about an unchecked rise in mass litigation are simply wrong

A recent study on “The impact of mass litigation in the UK” by the European Centre for International Political Economy on the surface appears rigorous but, on closer inspection, raises critical questions about its methodology, framing and conclusions. In a response, exclusively published by the Global Legal Post in full, Anthony Maton, Global Co-Chair of Hausfeld, sets out twelve key points.

In his view, the paper relies on an unjustified weighting whereby ‘30% of the current costs of mass litigation in the US forms the basis to estimate litigation costs in the UK’ but which ignores the fundamental differences between our legal markets. 

The report’s narrow focus on economic downsides and corporate balance-sheet risks downplays the core social and consumer-protection benefits that collective redress delivers. 

By omitting any in-depth analysis of how collective actions deter corporate misconduct and uphold trust in our markets, the study reads less like a neutral, academic inquiry and more like a paper designed to bolster the case for tightening collective-action rules. 
It should be balanced against other stakeholder perspectives - especially from consumer, worker-rights, and civil-society groups not backed by the very groups and institutions representing corporate interests (including those at the receiving end of collective redress).

Many variables which affect the UK’s investment and innovation climate such as regulatory complexity, tax policy, skills shortages, infrastructure gaps, availability of capital, even the Brexit factor - to mention but a few - are all compelling factors and ignored as part of the report’s conclusions. 

Finally, and particularly within the competition litigation perspective where much of the activity in the collective redress space has been, it pays to remember that many of the defendants are, either by previous regulatory finding or subsequent court judgment, infringers of competition law. Not quite the innocent.

To read the detailed response
The Impact of Increased Mass Litigation in the UK