The new UK Class Action Regime – An overview
30 September 2015
There has been considerable speculation as to whether the new class action regime introduced by the Consumer Rights Act 2015 (the CRA), which facilitates collective proceedings in the Competition Appeal Tribunal (the CAT) for breaches of competition law, will lead to a surge of U.S.-style class actions in the UK. The new regime will come into force on 1 October 2015 and new CAT Rules have now been laid before Parliament.
- The CAT can hear collective proceedings and make collective settlement orders.
- A U.S.-style “opt-out” collective claim will be possible for claimants within the UK.
- A collective action can now be brought by someone who “will fairly and adequately act in the interests of class members” rather than just certain specified bodies.
- The current restriction that a CAT collective action must be a ‘consumer claim’ will be removed, allowing businesses to be part of a collective action.
- The CAT can hear stand-alone claims as well as ‘follow-on’ claims.
- The CAT can grant injunctions.
- There is a fast track procedure for smaller claims.
- Limitation will be brought into line with the High Court, with a transitional period.
- The CAT will be able to make an aggregate award of damages rather than having to assess individually the amount of damages recoverable by each class member.
- an alleged infringement of competition law (referred to as “stand-alone cases”); or
- a competition law infringement decision of the Competition and Markets Authority (CMA), the CAT (on appeal from the CMA) or the European Commission (referred to as “follow-on cases”).
- Opt-in proceedings, on behalf of each class member who opts in by notifying the class representative that their claim should be included in the proceedings; and
- Opt-out proceedings, on behalf of each member of the defined class domiciled in the UK who opts out by notifying the class representative. Class members who are not domiciled in the UK must opt in to be included in the proceedings.
However, the new rules provide some important controls in relation to the award of damages and costs which should prevent the rapid growth of class action litigation, as has occurred in the U.S. Much will depend on how broadly or narrowly the class is defined, the merits of each claim, and the risk appetite of defendants either to settle or defend the case to its conclusion. The CAT’s first few decisions will be vital in shaping the development of UK class action practices and determining whether claimants will seek to bring increasingly large and complex cases.