Call for evidence on effectiveness of UK opt-out collective actions in competition cases

The Department for Business and Trade (DBT) is currently consulting on the operation and impact of the current UK opt-out collective actions regime for competition claims. The call for evidence runs until 14 October 2025.

The Consumer Rights Act 2015 (“CRA”) introduced an opt-out collective (class) action regime as a means of providing enhanced methods of redress for parties harmed as a result of anti-competitive behaviour. The regime, which sits alongside a public enforcement regime of corporate and individual penalties and director disqualification, is intended to act as a strong deterrent to businesses engaging in anti-competitive behaviour.

As the current regime moves into its second decade, and following recent changes to the public enforcement regime under the Digital Markets, Competition and Consumers Act 2024, the DBT is seeking views on whether the current collective actions regime strikes the right balance between providing an effective redress mechanism for consumers who are genuinely harmed by breaches of competition rules, and protecting businesses from the effort and expense of defending unmeritorious claims.

Opt-out collective actions in competition law

Opt-out claims, as introduced by the CRA, enable a claim to be brought on behalf of all members of a class who have suffered a loss resulting from a breach of competition law. The claim is brought by a “class representative” who is approved by the Competition Appeal Tribunal (“CAT”) in a collective proceedings order. This allows for a large number of relatively small value claims to be aggregated in a way that can justify the cost of bringing the claim in the first place.

Claims can be brought either on a standalone basis (where the claimants have to prove the breach of competition law and that it caused them loss) or on a follow-on basis (where the claimants rely on a finding by the Competition and Markets Authority that competition law has been breached and only have to demonstrate that the breach caused them loss). 90% of the CAT’s current caseload is now made up of standalone cases.

The call for evidence

The DBT call for evidence notes that:

“Since 2015, the opt-out caseload has grown significantly, with tens of billions of pounds in damages claimed and hundreds of millions of pounds spent on legal fees. This is far higher than estimated in the original impact assessment, which estimated the total cost to business to be £30.8 million per annum (taking into account legal and associated costs, and the paying out of redress).”

Only one case has so far resulted in a judgment by the CAT – the vast majority of cases settle out of court, leaving questions about the appropriate amount and distribution of damages in such cases “on the table”. The resulting uncertainty has, arguably, meant that claims that might never succeed are still being brought, and claims that might have significant prospects of success are being settled for less than they are worth. The DBT’s concern is that the cumulative effect of this is that consumers are not receiving redress that is accessible, efficient and proportionate.

The call for evidence invites in particular any suggestions about access to fundingto bring collective actions, and improving access to alternative dispute resolution (“ADR”) and voluntary redress schemes as more effective alternatives to the opt out collective actions regime. Comments are also invited on whether the current regime incentivises the right settlements and distribution of damages.

The key themes of the call for evidence are:

1. Access to litigation funding
   1. Is the regime affordable to a diverse range of classes of claimant?
   2. Is the current approach to the share of settlement or damages awards taken by those who fund collective litigation actions fair and proportionate, and if not how can it be improved?
   3. Can lessons be drawn from other models of funding that could improve access to the current regime?
   4. Are litigation funding agreements fair, comprehensible and transparent both to class members and the CAT?
2. Scope and certification
   1. Is the current approach to certification ensuring that eligible claims are proceeding and ineligible ones are not?
   2. How is the regime dealing with cases that involve multiple types of breach (e.g. environmental and data protection issues?
   3. Does the regime allow a defendant business to properly understand the scope of its potential liability?
   4. Are there any circumstances (e.g. whistleblowing) where certain businesses should have immunity from collective damages actions?
   5. How should the regime deal with standalone cases where there is a parallel investigation by the CMA or other authorities?
3. ADR, settlement and damages
   1. Would a regime that focused more on ADR provide better access to redress? Would it act as a deterrent to anti-competitive behaviour?
   2. Should the regime focus on denying the defendant the benefits of its breach rather than compensating the claimant for actual losses?
   3. Does the level of influence that litigation funders have over cases help or hinder the ability of the regime to resolve them effectively?
4. Distribution of funds
   1. Are damages or settlement payments being distributed in a fair and effective way and to the right people?
   2. Do consumers have a sufficient understanding of their rights in opt-out cases? Does the regime give them sufficient opportunity (and incentive) to claim their share?
   3. What should happen to any damages that are unclaimed by class members?

The DBT invites responses to these questions as well as any other views on the operation of the current opt-out collective action regime by 14 October 2025. Once the call for evidence has ended, the DBT will review all responses received and put forward proposed changes to the current regime, subject to consultation. It is likely to propose targeted reforms to the current regime in the four key areas outlined above.

If you would like to discuss how the DBT’s call for evidence and subsequent policy developments may affect your organisation, please contact Jamie Dunne, Craig Watt, Fiona Chute or your usual Brodies contact.