The UK Class Action Regime
Although it’s taken its time to arrive, the UK now has one of the leading class action regimes in the continent of Europe. And it long predates the European Union proposals.
The road to UK class action started with the Enterprise Act of 2002 which set out provisions for ‘specified bodies’ to bring representative actions on behalf of two or more individual consumers at the Competition Appeals Tribunal (CAT). This led to many discussions about a nascent UK class action regime but only one actual case.
Then in October 2015 the real breakthrough came with the Consumer Rights Act which replaced the provisions of the old enterprise act with a new regime allowing collective proceeding to be brought on behalf of businesses and individuals in the CAT for breaches of competition law.
Under the regime, the CAT must first ‘certify’ that the claim is suitable for group litigation. It may be asked to choose between a number of similar claimants seeking to litigate similar cases. If the CAT certifies, it makes a Collective Proceedings Order (CPO). The claimant that wins the CPO become the one that represents the group thereafter.
Notably, the new regime allows ‘follow on actions’ that can be brought against companies that have been sanctioned by an EU or UK competition regulator, such as the European Commission or UK Competition and Markets Authority. In such circumstances, there is no doubt about the guilt of the company being sued. The question is what redress the consumers are entitled to.
This system has led to many more claims. So far, at least 13 claims have been filed at the CAT. Three of them have received CPOs and are set to proceed to trial. The rest are awaiting determination.
The most notable case is Merricks v Mastercard which was certified in August 2021 after a legal battle that went all the way to the Supreme Court. The case is a follow-on action arising from the European Commission’s finding that fees charged by Mastercard had restricted competition between banks resulting in inflated fees for every UK consumer aged at least 16 who used a debit card at a machine that accepted Mastercard between 1992 and 2008.
The case is being brought by Walter Merricks, a campaigning lawyer and the former Chief Ombudsman of the Financial Ombudsman Service.
Effectively, that is almost all UK adults for a period of 18 years.
While it has taken some time for the Merricks case to be certified, it is now clear that the UK has a legal regime set up to allow representative claims to be brought on behalf of millions of claimants.
Questions and answers
Q: Are there any other names for class action lawsuits?
A: The most common name for legal disputes involving many claimants is ‘class action lawsuit’ or ‘class action litigation.’ However, they can also be called ‘group actions,’ ‘group claims,’ ‘collective actions,’ ‘mass torts,’ ‘group claim lawsuits,’ to name a few. Although there are various different legal regimes governing the way class actions progress, what they all have in common is that they represent many, sometimes millions, of claimants.
Q: What is the ‘collective action regime’?
A: It is shorthand for the EU Directive on collective redress which stipulates that all members of the EU must have some form of class action regime in place by the end of 2022. There are already many class action lawsuit active claims across the EU and in the UK. Due to the evolving nature of the regime, new group claims are likely to grow in number over the coming years. You can find out more about the collective action regime here.
Q: How do class action lawyers handle new group claims?
A: There is no stipulated way for class action lawyers to manage class action litigation. However, managing a case with thousands of claimants requires organisation and class action claims administration is complicated. Most lawyers will use some form of claims management software. Often, they will use a claims management platform to which claimants can upload data. In today’s data-driven world it would be hard if not impossible to run a large claim without some sort of dedicated claims system, claims handling software, or claims management website.
Q: Are class actions in England and Wales different from EU class actions?
A: The UK has its own class action regime as described on this page.
Q: Are class actions common in Europe?
A: They aren’t as common as in the US and Australia. Class actions in England and Wales are on the rise following legislation in 2015. Due to the EU collective action regime, all members of the EU 27 are required to have class action regimes in place by the end of 2022. New class action claims from across Europe are, therefore, highly likely. You can find out more about EU class actions here.
Q: What are some group claim lawsuit examples?
A: The most high-profile group action lawsuit in England and Wales in called Merricks v MasterCard. There are many class action lawsuit claims planned, and many active group claims in the system. It is, however, impossible to know how many there are across the region as there is no centralised database or class actions lawsuit list.
Q: What are the biggest group action lawsuit claims?
A: It depends on how ‘biggest’ is defined. Merricks v Mastercard potentially represents every adult in the UK, so millions of people. The Tobacco Master Settlement in the US was worth more than $200 billion.
Q: What big group claim settlements have there been in the UK?
A: So far, all of the group claims filed under the 2015 regime at the Competition Appeals Tribunal have yet to conclude.
Q: Are new class actions common?
A: They are becoming increasingly common in the UK and parts of the EU. They have been an established part of the US system for well over half a century.
Q: What does group action software do?
A: Click here for more details of FinLegal’s claims handling software.
Q: Is group action software the same as claims manager software?
A: FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.
Q: What is a claims management platform?
A: A claims management platform is a web-based software solution for managing class action litigation. FinLegal’s claims handling software can be used by lawyers and claims managers, as well as potential claimants who can self-serve using tablets, phones and laptops. Click here for more details of FinLegal’s claims handling software.
Q: What are the largest class actions lawsuits/biggest group actions settlements of all time? How big are big group claim settlements?
A: As class actions involve many people, even a small per person payment can lead to a big group claim settlement. However, the biggest ever class action lawsuit was the Tobacco Master Settlement Agreement of 1998, a case brought against the four largest cigarette manufacturers in the US. The total settlement was more than $200 billion. Class action settlements, in total, are rarely small. $200 billion is by far the largest, and no other claims to date have come near that figure.
Q: What is the difference between opt in and opt out?