Class actions have long been popular in the United States, tackling everything from consumer rights infringements to environmental damage. However, corporate wrongdoing transcends geographical boundaries, and while the UK has historically been less litigious than the US, there is growing interest in collective redress on this side of the pond.
Research shows a massive surge in the value of UK competition class actions, jumping by 550% to over £26 billion in just one year. This sharp increase indicates a significant rise in the number and severity of violations being pursued through multi-party lawsuits.
The growth of group action claims in the UK can be attributed to a few key factors:
- Changes in the legal system that make it easier to bring mass claims.
- A growing acceptance of mass claims as a means of redress.
- A thriving litigation funding market, where investors give financial support to legal disputes in exchange for a cut of the winnings.
- A rise in the number of claimant champion law firms.
The benefits of group action claims
If a group of people has experienced loss or otherwise been harmed by an organisation’s lawbreaking, they can come together to fight for justice. By levelling the playing field when standing up to big businesses, group actions prove that there is strength in numbers.
- Access to justice: group actions provide access to legal support for people who might otherwise be unable to pursue claims due to financial or other obstacles.
- Efficiency: group actions consolidate similar claims into a single lawsuit, saving time and resources for everyone involved.
- Cost: Solicitors often take on group action cases on a no-win-no-fee basis.
Group claims in the UK
In the UK, group claims are becoming common across various industries, addressing different types of alleged wrongdoing.
Data Breach Claims
Individuals affected by mass data breaches are making group action claims. For example:
- In 2021, the British Airways data breach action was resolved on confidential terms following successful mediation and negotiation.
- In 2022, Ticketmaster settled a data breach group action on a no-admission basis.
- Law firms are currently pursuing a group action claim against Capita after UK pension holders and their beneficiaries had their data breached.
Environment, Social and Governance (ESG) Claims
ESG claims are being made against companies whose environmental, social, or governance practices have failed to meet regulatory standards.
- Environmental claims may involve allegations of pollution, environmental degradation, habitat destruction, or emissions. Find out more about the Ford and BMW emissions claims.
- Social claims may involve allegations of human rights abuses, labour violations, discrimination, or unsafe working conditions.
- Governance claims may involve allegations of corporate misconduct and insider trading.
Competition Claims
Group competition claims arise when there’s evidence of price fixing or other anti-competitive practices, such as a company abusing its dominant market position to stifle competition.
Employment Claims
Employment-related group action claims are on the rise.
- After the Supreme Court’s ruling that Uber drivers are workers, not self-employed contractors, thousands of claimants joined a group action case to claim compensation for unpaid wages.
- Arguing that they have been paid unfairly, thousands of UK supermarket store workers have joined equal pay claims to get back what they are owed. Find out more about the ongoing claims against Tesco and Asda.
Product Liability Claims
Product liability claims occur when faulty products harm consumers physically, financially, or emotionally. For example, Jaguar Land Rover has been selling cars with defective diesel particulate filter (DPF) systems. As a result, drivers may have experienced excessive maintenance costs and increased risks to their safety.
With growing AI integration in products, we expect to see more tech-related claims due to unexpected outcomes and inherent bias.
Financial Claims
Financial group action claims involve the mis-selling of financial products, fraud, negligence, or breaches of regulatory requirements.
Methods of achieving collective redress in the UK
There are several ways to bring a group action claim in England and Wales.
Collective Proceedings
Currently only available for competition claims, a Collective Proceedings Order (CPO) allows a claim to be made on behalf of everyone affected by an organisation’s wrongdoing without their express consent or knowledge. A type of opt-out claim, individuals affected by the same harm or misconduct are automatically included under the CPO unless they withdraw from the action. As such, collective proceedings claims can be huge.
Compensation is typically awarded based on the collective harm experienced by the group rather than by assessing the damage suffered by each claimant. Collective proceedings are on the rise, and this is likely to be a growth area over the next few years.
Representative Action
A representative action is launched when a group of people affected by an issue experience similar levels of harm. Representative actions are opt-out, but are not limited to competition claims.
In a representative action, one solicitor represents all claimants, and typically, one group member sues on behalf of everyone. As with a CPO, compensation tends to be awarded based on the collective harm experienced by the group.
Group Litigation Order (GLO)
A GLO lets people who have experienced a common or related issue have their cases managed collectively. Claimants must opt-in to join a GLO.
Strictly speaking, a GLO is a collection of individual claims. Each claimant has to prove their case and, if successful, will receive damages that reflect the specific harm they experienced. In practice, claims are usually grouped and managed using test claimants.
The GLO process can be time-consuming, as each individual’s circumstances need to be properly addressed. Also, different solicitors may be involved, each with their own cohort of clients, and this can add to the complexity. Nevertheless, while the process can be lengthy, GLOs offer a genuine path to justice, often on a no-win, no-fee basis.
In conclusion
No longer a US phenomenon, the United Kingdom is witnessing the democratisation of class action litigation with a marked surge in collective claims. Behind the rise is an increasingly accessible and fair legal system and a growing acceptance of group claims as a means of redress.
In this new legal landscape, consumer-focused law firms in England and Wales are pivotal players, leveraging partnerships with litigation funders and embracing no-win, no-fee arrangements to spearhead group action cases. In doing so, they not only empower individuals, but also champion the cause of justice and hold corporate giants accountable for their misdeeds.
