How class actions became a hot trend in the UK
Whilst class actions have long been a staple of the US legal system, they’ve recently surged in popularity in the UK. This has been coupled with a growing public awareness of consumer rights, and their importance as a tool for securing access to justice and deterring corporate misconduct.
As a result, the Competition Appeal Tribunal (CAT) is one of the busiest courts in the country.
In preparation for a feature by Maria Ward-Brennan at City A.M. on class actions and the role litigation funders play, Scott Campbell, Head of Competition Disputes Team, and David Lawne, Partner at Hausfeld in London prepared a few answers to Maria’s questions shedding light on the factors driving this growth and its implications.
Why have class action and funded cases become so popular in the UK?
Two main factors have catalysed the rise of popularity of collective actions in the UK. “First, legal reform. The 2015 introduction of opt-out collective actions created an efficient mechanism for large groups to seek redress for losses caused by competition law breaches. This has led to multiple cases and growing awareness of their benefits.”
The second factor is “the increasing recognition that individuals lack resources to challenge the behaviour of big corporations. Collective actions shift power back to individuals and businesses, improving access to justice and serving as an effective tool to demand change.”
Why is there an increased appetite for collective action in the UK?
When asked about the public’s appetite for these cases, they note a shift in sentiment. “People are increasingly frustrated with perceived corporate misconduct and lack of accountability. While individual voices often go unheard, a class of millions demands attention. As more high-profile cases emerge, driven by high profile scandals across a range of sectors, including abuses of dominance by big tech players and pollution incidents involving water companies, understanding and support for these actions is growing.”
About the ongoing transformation of the legal framework
“The regime is still relatively new, raising issues not previously considered by the UK courts. As a result, the case law is still developing, and many issues are challenged in the appeal courts. This creates uncertainty and delays.”
They also highlighted the resource imbalance where “defendants are often well-resourced corporations able to sustain prolonged litigation, potentially increasing costs and delaying justice. These factors combine to make collective actions complex, expensive and time consuming.”
What do you say to those that claim these cases are 'ambulance chasing' litigation?
“This mischaracterises the nature of collective actions. Far from ‘chasing’ cases, they represent a considered approach to addressing large scale wrongs and providing access to justice. Collective actions are complex, costly to run, time consuming, and are dependent on specialist litigation funding. The regime has built in safeguards to ensure that the interests of the class are always prioritised above those of funders and lawyers, who are not paid any success fees until the end of the litigation, when the case is won or damages are paid.”
