The big news from last week’s UK announcement on reforming private competition enforcement is that the government plans to introduce opt-out class actions for competition claims.
The proposals incorporate various “safeguards” designed to ensure that the perceived excesses of US class actions do not become a problem here. Some of the safeguards are really no more than statements of the obvious – no-one can be surprised that we will not have US-style triple damages, or that law firms won’t be able to bring a claim without even having a claimant. On the other hand, some safeguards – such as the prohibition on contingency fees – will surely serve to limit the usefulness of UK class actions.
Financing aside, the big unanswered question is how attractive claimants will find such class actions (or “collective actions”, as the government prefers to call them, emphasising the differences with the US). Continue reading