The next government may come under renewed pressure to reform the UK’s collective action regime, as the Competition Appeal Tribunal strives to cope with the surge in multi-billion-pound claims relating to consumer protection.
So predicts Linklaters litigation partner Sarina Williams, who today addressed a LIDW breakout session at Brick Court Chambers on the ‘transformation of the CAT into the UK’s class actions tribunal’.
Williams noted that an amendment to the Digital Markets, Competition and Consumers Bill attempted to allow collective claims based on consumer law to be brought before the CAT. This failed in the Commons but enjoyed significant support in the Lords. ‘It could well come back on to the agenda,’ she said.
Williams and Brick Court’s Robert O’Donoghue KC agreed that class action claims pertaining mainly to consumers – but also environment and data privacy – are being ‘shoehorned’ into the CAT. With just two courtrooms and panel members potentially engaged for weeks on single cases, the tribunal faces capacity issues, noted Williams. Increasingly complex multi-party litigation exacerbates this problem.
The Linklaters partner speculated that the tribunal could become more assertive in pushing parties into alternative dispute resolution, following the lead of the Court of Appeal. The tribunal is already experimenting with different case management techniques, such as setting more ‘aggressive’ deadlines.
Ushered in nearly a decade ago, the collective action regime has led to a ‘paradigm shift’ in UK litigation, O’Donoghue told the event. Some £160bn worth of US-style ‘class actions’ at the CAT means over £1bn in legal fees, which is a ‘big deal’ for the UK economy. The average claim value is £3bn. Some are in double-digits, however, such as the high-profile £10bn Mastercard action fronted by former financial ombudsman Walter Merricks CBE (pictured).
‘We are seeing a glut of [consumer] claims that would never have been brought [before 2015],’ O’Donoghue added. ‘The subject matter of competition law has expanded beyond all recognition in the last 5-10 years. It’s now getting the attention of CEOs and general counsel, which it would not have had then.’
The panel also addressed the controversial role of litigation funders and their returns. O’Donoghue stressed that the third-party funding environment is a ‘delicate ecosystem’, adding that he would be ‘cautious’ about the courts ‘steaming in’ to interfere. ‘The market will take care of itself,’ he suggested.
Lit funders want the next government to legislate to address the damaging effects of the Supreme Court’s PACCAR ruling, after the bespoke Litigation Funding Agreements (Enforceability) Bill fell victim to the general election timetable.
