Ten years of opt-out collective actions in the UK

Charlie Rooke: Legal finance is an essential part of collective redress mechanisms in the UK and other European jurisdictions that allow for opt-out claims, such as the Netherlands.

Funding ensures that claimants do not bear the costs of complex litigation themselves. Without it, most collective actions, whether for individual consumers or businesses, would never get off the ground, particularly given the high costs of litigation for often relatively small amounts of damages on an individualized basis. Collective redress also ensures that wrongdoers, such as cartelists, are held to account and that those who are harmed by the anti-competitive conduct are adequately compensated for their losses.

The UK government is now carrying out a review of the opt-out collective actions regime to mark it's 10-year anniversary. The review recognizes the pivotal role the Competition Appeal Tribunal plays and how the regime has developed over the last 10 years. The government's review seeks evidence on whether the regime is meeting its objectives.

First, delivering access to justice by allowing groups of consumers and businesses to pursue claims they could not feasibly bring alone. Second, ensuring fairness and efficiency by examining whether the regime balances the interest of claimants, defendants, legal finance providers and the justice system. Third, supporting effective consumer redress by considering how well opt-out proceedings deliver outcomes that benefit affected groups.

This review underscores the importance of opt-out collective actions as a mechanism to hold powerful companies to account, but it also recognizes that cases are complex and that resolutions so far have been few and far between. It highlights how essential it is that the CAT continues to act as an effective gatekeeper, ensuring claims are properly certified and that the regime allows meaningful remedies to be paid to those affected by anti-competitive behavior. The call for evidence also reflects the UK's growing recognition that collective redress procedures can strengthen consumer protection and market integrity, aligning the regime more closely with international best practices.

It recognizes that litigation should not be the only way for consumers in particular to be compensated. There's also a place for redress mechanisms and alternative forms of dispute resolution. These can be quicker and more efficient and ease the burden on both claimants and defendants. There's also the question of how to deal with other types of wrongdoing, such as environmental or data privacy infringement. Those affected risk slipping through the net if there's no way of them being compensated via the existing collective redress system.

The opt-out regime has come a long way in the last 10 years. Resolutions are coming, cases are being certified more quickly and distributions are being made to those harmed. But as the review recognizes, there's still a long way to go and lots still to result. Its output will help to shape what the next 10 years of collective redress holds in the UK.

Burford will remain one of the leading providers of legal finance for collective redress and will be able to utilize its significant experience in the CAT. We have backed some of the largest UK competition claims ever brought, including collective actions, such as a multi-billion pound damages case against Google on behalf of UK search advertisers. Because of our size and our stability, we can support long-running high value competition cases without financial pressure to settle early. 

Our financing can ensure that wrongdoing companies are held to account, and consumers and businesses who are affected by anti-competitive conduct obtain redress for the harm that they have suffered. Our London-based team has deep expertise in not only UK and European competition law, but also commercial litigation and arbitration and nearly 90% of the UK's largest law firms have sought our funding.