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England and Wales

Author: Vincent Smith and Mahdis Moeiri-Farsi

I. Overview

Collective redress, and the need for its reform, has received significant legislative and regulatory attention in the UK in the past few years.

The UK currently has a number of procedural mechanisms available to multiple claimant groups. Some of these are generally applicable to all kinds of claims and all operate on an opt-in basis - that is, claimants must elect to join the proceedings in order to be considered as a member of the class and to be entitled to any damages awarded. In contrast, the sectoral collective redress mechanism for competition claims, introduced under the Consumer Rights Act 2015 - adopts the opt-out system as one of the possible means of achieving a more effective system of collective redress.

General Collective Redress Mechanisms (Group Litigation Orders)

The main general collective redress mechanisms are Group Litigation Orders (GLOs), representative actions and test cases (including those using a declaration).

GLOs were introduced under the Civil Procedure Rules (CPR) in 1999, as part of the 'Woolf' reforms of English civil procedure. A GLO is made under CPR 19.10-19.15 for claims which 'give rise to common or related issues of fact or law'.

Representative actions (CPR 19.6) may be brought by or against one or more persons who have the 'same interest' in a claim.

Test cases are also feasible, as the CPR provides the courts with powers to manage litigation in cases where there are a large number of claims raising the same common factual or legal issues. For example, the issue of the fairness of major clearing bank's fees to consumers for late payment was dealt with by way of a High Court declaration applied for by the UK Office of Fair Trading (OFT).

Sectoral Collective Redress Mechanisms

Competition Claims

There have been several initiatives in the UK to promote reform in collective litigation mechanisms for specific sectors. In particular, the UK has reformed collective redress for claims for both damages and injunctions for breach of competition law. The Consumer Rights Act 2015 (Sch 8) amended the Competition Act 1998 to allow 'collective proceedings' to be brought by a proposed representative claimant in the specialist Competition Appeal Tribunal (CAT). The Tribunal can order that collective proceedings continue either on an opt-in basis or on an opt-out basis. A judgment or approved settlement in opt-out collective proceedings will apply to all members of the class resident in the UK.

In addition, further amendments to the Competition Act include:

1. allowing the Competition Appeal Tribunal (CAT) to hear more kinds of competition cases

2. granting it additional powers to allow SMEs to quickly and cheaply challenge anti-competitive behaviour that restricts their ability to grow.

3. promoting alternative dispute resolution (ADR) to ensure that the courts and the Tribunal are the option of last resort for collective claims;

4. ensuring private actions complement the public enforcement regime, in particular by protecting the incentives provided for companies to whistle-blow on cartels.

The amendments to the Competition Act followed the UK's Department for Business Innovation and Skills (BIS) consultation in 2012 and 2013[1], on proposals aimed at complementing public competition law enforcement reforms with a stronger private actions system. The proposals aimed at increasing growth, through the empowerment of small businesses to tackle anti-competitive behaviour and at promoting fairness, by enabling consumers and businesses that have suffered loss due to anti-competitive behaviour to obtain redress.

Earlier Proposals

Earlier proposals and initiatives impacting on collective redress in England, both generally and in specific sectors (for example financial services) include:

1. Lord Justice Jackson's review of civil litigation costs, June 2008 and its final report published on January 2010 - including recommendations on costs in collective actions. These particular recommendations were not, however, fully adopted in the subsequent amendments to the CPR[2];

2. The CJC Report in December 2008 on collective redress, including a draft revision to the CPR and a Draft Collective Proceedings Act;

3. The OFT's Recommendations to Government in November 2007 on private enforcement of competition law;

4. BIS's consultations on consumer protection legislation in 2005 and 2006.

5. The Finance Bill in 2010 proposed the introduction of opt-in and opt-out collective actions in particular in claims under financial services legislation. However this initiative was dropped in light of the 2010 General Election.

To sum up, in the UK not only are there several existing procedural tools providing general collective redress mechanisms but in the competition field, the UK now has one of Europe's most advanced 'class action' systems, even if limited to the competition arena..

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