The remarkable rise of European class actions, or is it?
A recent report into European class actions found that the number of actions in Europe had grown by 120% from 2018-2020, most notably in the areas of competition, data protection, product liability and foreign torts/environmental claims. The number of technology cases increased 15 times over the last four years. This can be explained in part by the introduction of opt-out procedures in the UK and the Netherlands, and the willingness of funders to support access to funding for these complex and large claims, for which it would not be financially viable to bring a claim on an individual basis otherwise. The report highlights that this growth could be a concern for corporates and that they should be aware of the risk.
Ben Rigby from the Global Legal Post spoke to CMS litigation partner Kenny Henderson; Leslie Perrin, Chair of the International Legal Finance Association; Steve Shinn, CEO of Disputed.io and Hausfeld Partner and competition disputes specialist, Anna Morfey. Anna highlighted that the adoption of class action regimes was good news for consumers and that it cannot be right that profits achieved by those who infringe competition law are retained by the companies breaking the law. Opt-out claims ensure that victims of anti-competitive conduct are compensated for their losses. She also mentioned that in the UK, the courts are very interested in how, and how much of, the damages recovered will go to the victims – and claims brought without a convincing plan to achieve this are unlikely to fare well.
Additional comments she provided, in full:
“It is no surprise that the number of opt-out claims has increased in recent years, but they remain relatively low in absolute terms – and nowhere near as prevalent in Europe as in the US. In the UK, opt-out collective actions were introduced for competition claims almost six years ago but none have yet passed the ‘certification’ stage. The Supreme Court’s judgment in Walter Merricks v Mastercard handed down last December has unblocked a series of other (largely opt-out) collective actions, which are now making their way through the Competition Appeal Tribunal. It is hoped that this will, finally, see the UK’s opt-out collective action regime getting off the ground and allow compensation to be recovered by those who have suffered loss. It’s a common myth, perpetuated by defendants and the firms representing them, that the only ones to benefit from opt-out claims are funders and claimant lawyers.
Nor is it a surprise that claims against Big Tech are on the rise, in a world where technology plays an ever increasing role in our daily lives and Big Tech is attracting increased attention from antitrust regulators worldwide as a result. Developments in tech have the potential to do a huge amount of good in the world, but with a small number of companies wielding enormous power in the sectors they dominate, they also have the potential to cause significant harm. Consumers or smaller businesses individually might not stand a chance against the might of these Tech giants. Again, this is where group claims (either opt-out claims in the competition sphere, or representative actions such as Richard Lloyd v Google in relation to data breaches) can be essential to ensuring compensation is paid by the Goliaths to the Davids.”