Henderson: Other-wordly number
Actions filed at the Competition Appeals Tribunal (CAT) encompass a staggering 544m class members, the equivalent of 8.1 actions for each person in the UK, according to new research.
Meanwhile, the value of opt-out class actions in the UK jumped by 48% last year, compared to 1% for opt-in cases.
However, the proportion of class actions across Europe launched in the UK fell to 29% from 63% in 2020, according to international law firm CMS.
The UK’s competition class action regime “continues to be extremely active”; the 544m figure, as at 31 December 2023, was a “remarkable number” given that the regime only started in 2015 and represented a rise of over 200m in just a year.
The figure includes class actions that that have been certified and withdrawn or where certification has been rejected.
CMS estimated, in its European Class Action Report 2024, that the cumulative value of opt-out and opt-in claims last year was £122bn, up from over £106bn the year before and a rise of 18%.
“As in last year’s report, the Mariana dam opt-in class action makes up a significant proportion of the cumulative UK figure since 2018.”
Researchers said in last year’s report that, following the collapse of the Mariana dam in Brazil, claimants were seeking around £30bn in damages.
Largely owing to this, the mining and energy/transport sector made up by far the biggest proportion of the UK’s class actions by value, accounting for £53bn, followed by tech with almost £29bn, financial products and services with £28bn and consumer products and life sciences with £12bn.
It was “not yet clear” whether the Litigation Funding Agreements (Enforceability) Bill, which would have reversed the Supreme Court’s PACCAR ruling that litigation funding agreements were capable of being damages-based agreements (DBAs), would be reintroduced as it had not been included in the Labour government’s King’s Speech.
CMS said this was important because DBAs were banned in opt-out competition class actions.
Meanwhile, the Civil Justice Council is conducting a formal review of litigation funding. It is due to publish an interim report this summer and a final one next summer.
“This is an important process – the output of the CJC’s recommendations will play a role in shaping litigation funding in England for many years,” said CMS.
Across Europe, opt-out class actions outnumbered opt-in actions for the first time, with 133 class action claims filed – the highest number in a single year.
CMS partner Kenny Henderson said: “It is extraordinary that competition class actions encompassing more than 540m class members have been brought in the UK, with most of the growth in just the last three years.”
The numbers were so “other-worldly” because these people were brought into opt-out class actions “without being asked and usually without their knowledge… Equally astronomical are the sums involved”.
Portugal moved ahead of the Netherlands with the highest total of claims outside the UK at €46bn, well ahead of its rival’s €35bn.
The UK still accounted for the biggest proportion of class actions at 29%, with Portugal on 23% and the Netherlands 18%, followed by Germany (8%), Poland (6%), Italy (4%) and Spain (3%).
CMS said the implementation of the Representative Action Directive in 2023, aimed at facilitating collective redress for mass consumer claims, had been a “pivotal development” in Europe, taking effect in Portugal, Netherlands and “most other EU states”.
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