Until 2015 it was very difficult to launch US-style class actions in the UK, although it was possible for individual claimants to join forces in order to make a Group Litigation Orders.
However, with the introduction of the Consumer Rights Act 2015 it is considerably easier for groups of individual consumers commonly affected by price fix scandals or cartels to pursue claims for compensation on a group basis.
Notably, the Act introduced an "opt out" system whereby any individual who has been affected by alleged wrongdoing is automatically included in the litigation unless they specifically state that they would like to be excluded from the action.
Why is the opt out system so significant?
The revised class action system for consumers massively enhances their rights as it allows them to engage in litigation against large, well-funded and legally powerful companies without having to pay lawyer fees on their own or to go through the pressure and bureaucracy of bringing a claim in their own name.
In fact, the old "opt in" system had only previously been used successfully once: when consumer group Which? brought a claim against sports retailer JJB for fixing the price of replica football kits; and although this was a notable and important claim, it ultimately proved difficult and impractical to ensure compensation to all affected parties.
Essentially, the revised law ensures that consumers achieve strength in numbers so that they have a reasonable chance of securing compensation from companies that engage in anti-competitive business practices.
However, in contrast to the US class action system, the UK model is significantly less "litigation friendly". For example, it requires losing parties to pay the winning side's legal fees, thereby providing some deterrent to frivolous or spurious claims. Furthermore, it does not provide for treble or exemplary damages so will not result in the kinds of lucrative payouts that are a controversial feature of the US court system.
The Competition Appeal Tribunal
Class action claims made under the Consumer Rights Act 2015 must be approved by the Competition Appeal Tribunal.
Under the rules, two types of claim can be processed using this system. These are as follows:
- Claims that follow on from a competition regulator's ruling regarding a breach of competition law.
- Claims which stem from alleged breaches of competition law that have so far not been subject to a competition regulator's ruling.
Find a class action specialist with Oratto
Oratto's membership encompasses many solicitors who specialise in helping claimants secure compensation through the taking of class action lawsuits.
The expertise of these solicitors extends to helping individuals, NGOs, charities and other parties looking to secure compensation for consumers who have been unfairly affected by the uncompetitive actions of large-scale organisations.
If you would like to find a solicitor to discuss your case with today, browse through our member profiles or try our Match Service.