Good debate, wrong conclusions
On 19 September 2025, the Institute of Economic Affairs Report published the report: “Class Act: The case for reforming Britain’s class action regime” highlighting the ‘sharp growth in the number and scale of class actions filed before the UK Competition Appeal tribunal’.
They also question the quality of the claims and the lack of speed with which cases are handled. The paper then explores a number of policy options to address these three issues. In reaction to its conclusions and recommendations, Anthony Maton, Global Co-Chair, states:
"Another week, another piece attacking the Competition Appeal Tribunal’s collective regime, conveniently labelled “class actions”. The Truss-aligned Institute of Economic Affairs Report has interesting ideas but is ultimately built on shifting sands.
Its central thesis: there is too much litigation and too much weak litigation. On the 1st, the report is Trumpian in its approach, alleging hyperbolically that “on average, there is roughly one new class action every week”.
"In truth, there have been 61 CAT collective actions, falling to 42 once duplicates are removed, 28 of which have been certified over the 520 weeks the regime has existed. Hardly the claimed tsunami."
On the 2nd, the author is forced to admit that the CAT, in its gatekeeper function - as deliberately designated by the underlying legislation - has both refused to certify claims and has found against Claimants. In the UK, in contrast to the US, the successful Defendant is protected by adverse costs recovery, backed by funders/insurers who are able to pay. Meanwhile, the paper is scathing about a number of the remaining 27 claims, notwithstanding that the CAT certified these actions and they have yet to be tried. In short, the system and its safeguards, carefully designed into the 2015 reforms, are working. Let’s not throw out the baby with the bathwater.
As to the IEA’s ideas:
- funders pay seed capital of 5% of claim value before litigation commences -> the economics of this would kill funding of claims and with it the regime
- this seed funding is then tradeable - this commoditisation smacks of the trading of mortgages that led to the 2008 financial crash -> let’s focus on getting money back in the pocket of people/ businesses rather than creating a derivatives market
- tougher certification standards -> the Supreme Court has established the approach which the CAT is applying - there is currently no evidence that weak cases are being certified
- funder’s returns -> with PACCAR funders’ returns have become multiples on investment as opposed to a % of sums recovered and to align this better, the answer is to reverse PACCAR. The last Government said they would, backed up by the CJC as the right approach.
Underlying all of this is an argument that the regime should be about deterrence, not compensation. I support deterrence, but also accountability that drives change for the better: the Trains case has turned back the tide on the malign practice of double charging through boundary fares - and the cases against big tech will open up market/ opportunities for UK businesses.
But it’s not good enough to tell consumers who have had pounds taken out of their pockets, and businesses whose markets are unfairly restricted and/or profits reduced “there, there”.
"Compensation to SMEs and consumers who lost out in these tough times has to remain at the centre of the regime - not pushed to the sidelines in the interests of a few corporate bulldozers."
