Recently, the Government’s BIS (department for Business, Innovation and Skills) announced proposed changes to the way in which competition litigation is dealt with in the UK.

One of the proposed amendments is to introduce an “opt-out” collective actions regime in the Competition Appeals Tribunal (‘CAT’). Effectifely, this would allow claims to be brought on behalf of a group without the need to identify the individual claimants, provided those claimants have not opted out.

Various safety measures have been proposed in an attempt to avoid a US style regime, including that the CAT must confirm whether the collective action can be brought on an “opt-out” basis and, if it can, the representatives bringing the action must be legitimate representatives of the group. For example, this would include claimants themselves or indeed Unions representing the claimants but crucially excludes law firms and third party litigation funders bringing collective actions on behalf of claimants.

Another interesting safeguard is to specifically exclude Damages Based Agreements (‘DBAs’) in the “opt-out” collective actions, again almost certainly with a view to distinguishing the CAT from its state side equivalents. Another distinguishing feature is of course the “loser pays” principle, designed primarily to prevent unmeritorious claims from being brought. This will inevitably mean an increase in demand for products which hedge this risk, such as After the Event (‘ATE’) insurance.

Only time will tell how these proposed changes will affect claims being brought in the CAT but speculation suggests it will only increase the amount of claims. From a logistics point of view, securing suitable funding for the group will arguably become more efficient if a suitable representative is appointed and is able to act on behalf of the group without specific instruction, provided the individual claimants have not “opted out”.

If you or your clients are interested in potential funding or insurance options for collective actions in the CAT, or in respect of competition litigation generally, please contact one of our specialist team below:

Helen Smith
Senior Broker
James Blick
Matthew Amey