By guest author Alessio Ianiello, Director of Legal Operations & Solicitor at Key Law
For several years, opt-out collective actions in the UK have been framed in terms of scale. Large classes. Significant aggregate damages. Complex litigation against major defendants.
But as the regime develops, a different question is coming into focus, one that goes beyond certification and settlement value: What happens when it is time to actually distribute compensation?
Having attended recent discussions at CORLA, it is clear that this is no longer being treated as a secondary consideration. It is increasingly central to how the Competition Appeal Tribunal (CAT) may approach the evaluation of collective proceedings.
This shift reflects the Tribunal’s statutory role under s.47B and s.49A of the Competition Act 1998, which requires it to ensure that collective proceedings deliver fair and reasonable outcomes for the class — not merely theoretical access to justice.
A broader test of success
Traditionally, success in collective actions has been viewed through a legal lens.
- Was the case certified?
- Was liability established or resolved?
- Was a substantial settlement achieved?
Those questions still matter. But, in my view, they are no longer sufficient on their own.
A key theme emerging from CORLA is that the CAT is looking more closely at the overall outcome of proceedings. Not just whether a case succeeds in principle, but whether it delivers meaningful redress in practice.
That means looking at:
- The level of damages made available to the class
- The likely level of take-up by class members
- The treatment of any unclaimed damages – including whether unclaimed damages revert to the defendant or are distributed to third parties such as charities.
- Whether the proposed distribution model is administratively workable and proportionate in light of the costs of delivering it.
This shift places greater emphasis on outcomes, not just legal process.
Distribution is now part of settlement
One of the most notable points raised at CORLA was not just what the Tribunal is considering, but when. Distribution is no longer being treated as a downstream issue. Instead, it is being considered alongside settlement approval itself.
The position reflected in Merricks v Mastercard Incorporated illustrates this clearly. The structure of distribution is not an administrative detail to be finalised later. It is part of the settlement the Tribunal is being asked to approve. While Merricks confirmed that aggregate damages do not require individualised assessment, the Tribunal simultaneously emphasised that distribution must still be fair, reasonable, and practically deliverable.
From a practitioner’s perspective, that has clear implications.
It means that the viability of a distribution model — including how compensation will actually reach class members — is now relevant at the point of judicial scrutiny.
The implications of low take-up
The experience of Gutmann v First MTR South Western Ltd provides a useful reference point.
Despite a large class and a defined settlement structure, take-up by class members was limited. That had a direct impact on the practical outcome of the case.
Where participation is low, the gap between the theoretical value of a claim and its real-world effect becomes more pronounced.
As discussed at CORLA, this has implications for stakeholders. Low take-up can influence how costs are viewed, how settlements are assessed, and ultimately how success is understood.
It may also affect the Tribunal’s assessment of proportionality under CPR 44.3 and the reasonableness of costs under s.47C CA 1998, particularly where the cost of distribution risks outweighing the benefit delivered to the class.
As seen in Gutmann, low take-up can also result in more modest cost outcomes for stakeholders. This introduces a new layer of risk. Not at the point of litigation, but at the point of distribution.
From litigation strategy to delivery strategy
Taken together, these developments point to a shift in how collective actions are being approached. From my perspective, distribution can no longer be treated as something that happens at the end of a case. It needs to be considered much earlier.
That includes:
- How class members will be identified and reached
- What level of engagement is realistic over time
- Whether the proposed distribution method is workable at scale
- How unclaimed damages will be managed.
In this sense, distribution must become part of the litigation strategy – a concept that is increasingly being referred to as “distributional adequacy”, reflecting the Tribunal’s interest in whether the distribution architecture is capable of delivering meaningful redress.
A more outcome-focused regime
The opt-out regime was designed to improve access to justice for large groups of consumers. That objective remains unchanged. But as the regime matures, the emphasis is shifting. The focus today is not just whether claims can be brought, but whether they deliver meaningful, practical redress.
For those operating in this space, that requires a more integrated view of the full lifecycle of a claim. Because increasingly, the question is not simply: “Can this case succeed?” But: “Will this case work in practice?”
As the CAT continues to refine the regime, distribution is no longer the final chapter of a collective action, it is part of the opening architecture. Those who design distribution early will shape not only the success of their own cases, but the future credibility of the regime itself.
