Class Action Regimes in the UK

The UK takes great pride in its legal system and the ability of that system to mete out justice for everyone. This was demonstrated last year, when a test case brought by the FCA was adjudicated in only seven months. It was ultimately resolved by the Supreme Court, which ruled that insurers must cover COVID-related losses for their policyholders.

Lawyer Monthly asserts that as class actions increase in number, the UK needs to catch up with the class-action regimes enjoyed by the rest of the world. Indeed, as clients and legal teams can now seek out the best jurisdictions for their cases, the UK would do well to strengthen and solidify laws surrounding class actions.

One dominant issue with class actions is opt-in versus opt-out. The Hiscox Action Group, for example, is an opt-in collection of hospitality businesses allegedly harmed by the same entity. This action requires impacted parties to register and agree to the funding arrangement. Opt-out claims, considered preferrable by lawyers and funders, include all impacted parties in the claim unless they specifically ask not to be included. This structure is simpler and more inclusive by most measurements.

Currently, UK class actions may only involve competition claims. These claims are presided over by CAT, the Competition Appeals Tribunal. If this regime is successful, it may be used as a blueprint for other claim types.

Some say there’s good reason to keep class actions on a tight leash. Tales of spurious litigation backed by opportunistic funders have some legal experts worried about clogging courts with frivolous class actions. Realistically, funders have no interest in supporting cases without merit. And the goal of litigation funding is to increase access to justice.