Opt-Out Group Proceedings and Consumer Class Actions

Following on from our recent update on opt-out group proceedings, the Law Commission of England & Wales is embarking on a project to consider the benefits and risks associated with the introduction of a "consumer class actions" regime with the aims of improving access to justice, ensuring damages are distributed to the affected class, and promoting cost efficient litigation. Stakeholders including businesses will be invited to share their experiences and views, to shape proposals for reform. 
 
The review will consider what is a "consumer law claim", whether to allow opt-in as well as opt-out claims, damages, costs and settlement, including claims funding. It will also consider the Government's review of Competition Appeal Tribunal (CAT) opt out competition claims, which included sensitive issues such as whether certain sectors are disproportionately targeted by litigants, the effective distribution of damages, and exploitation of vulnerable opt-out collective proceedings to create a litigation culture in some areas. Currently, opt-out claims are only permitted in the CAT, and are pursued by a class representative on behalf of a class, whose members are automatically included, i.e., no positive steps need be taken to join the class. 
 
Given the importance of any reforms south of the border in terms of what might develop north of the border, the proposals will be considered carefully when they emerge after autumn this year.  
 
In terms of interesting developments in group proceedings in Scotland, the recent case of Adamson v Arnold Clark Automobiles Limited concerned a data breach class action. English proceedings were up and running, and the defender in Scotland argued that the most appropriate forum to litigate the claims was in fact the English courts: justice would be administered with greater efficiency if all claims were dealt with in one set of proceedings. They argued it would be cheaper, simpler, avoid duplication of work and the possibility of conflicting decisions. 
 
Lord Sandison did not agree, and rejected the argument at the permission stage, certifying the group and representative party. He emphasised that the certification decision was a discretionary one, and stated that "what is called for is a pragmatic and realistic approach with a particular emphasis on ensuring that the underlying policy, aim and purpose of the 2018 Act are given proper effect. Technical points will not be allowed to get in the way at the outset of proceedings." Lord Sandison went as far as sharing his view that permission decisions should not be appealable as of right, suggesting that the court rules should be amended. Watch this space in this developing area of law.
 
MFMac have a team of group proceedings litigation specialists, led by Julie Hamilton.