The newly renamed Department for Business, Innovation, Science and Trade (“BIST”) is currently consulting on changes to the UK’s opt-out collective actions, regulatory appeals and competition enforcement regimes.

The consultation, titled “Swifter and simpler competition redress, regulatory appeals and competition enforcement”, is open until 26 September 2026. A significant part of the consultation concerns the UK-wide opt-out collective actions regime in claims for damages arising from breaches of competition law.

What are opt-out collective actions?

Where a business has breached competition law, any person who has suffered loss as a result of that breach can bring a claim for damages against the businesses involved in the breach.

Generally all of the businesses involved in anti-competitive conduct are liable for the full amount of loss suffered, whether or not the claimant was ever their customer. For example, where two businesses unlawfully agree that Business A will not sell to customers in Business B’s area and vice-versa, then Business A will be liable for the harm (higher prices etc) that Business B’s customers suffer as a result even though Business A has never received any revenue from those customers.

There is an exception to that rule where a business obtains “leniency” from the Competition and Markets Authority (“CMA”) for “blowing the whistle” on the conduct, to encourage businesses to come forward. They also receive immunity from fines.

Claims can be brought on a “standalone” basis (where the claimants prove the breach of competition rules) or on a “follow-on” basis (where the CMA or another competition regulator has already ruled that competition rules have been breached).

In an opt-out collective action, a class representative brings a claim in the Competition Appeal Tribunal (“CAT”) on behalf of all of those who have suffered the same harm as a result of the same breach. Any UK-domiciled person who is part of the class of business or consumer affected by the breach of competition law is automatically included in the claim unless they have specifically opted out. The representative asks the tribunal to make a collective proceedings order, which authorises them to be the class representative, defines the class that they are authorised to represent, and says whether that's on an opt-in or an opt-out basis.

What is the Government proposing?

The Government has set out a number of proposals to improve the opt-out collective actions regime include:

  • Bringing and financing claims
    • BIST has decided not to increase the requirements or obligations imposed on class representatives but is considering whether to make the current requirements clearer in relation to the proposed class representative’s involvement in funding arrangements and the role of costs lawyers and consultative panels.
    • However, the Government considers that the threshold for certification of a claim as suitable to be an opt-out collective claim is too low, and is proposing to reform that threshold, including through introducing a greater focus on the merits of the claim, its prospects of success and the proportionality of allowing it to proceed, and giving greater weight to whether the potential benefits to the class justify the likely costs of the legal proceedings.
    • The Government is also seeking views on changes to permit damages-based agreements in opt-out actions (which remunerate the person who funds a claim based on the amount of damages awarded to the claimant), noting that the current system appears to be presenting prohibitive obstacles to the bringing of meritorious claims with a value below £500m. Funders may be paid at the point of award or settlement rather than only once damages have been distributed, and costs sanctions may be introduced for behaviour that is intended to unreasonably drive up costs and drain budgets.
  • Alternative dispute resolution – BIST is seeking views on whether to give the CAT powers to encourage or even require mediation at appropriate stages in proceedings, including allowing settlement offers with automatic cost consequences (in the CAT these are called Rule 45 offers and are similar to tenders in Scotland or Part 36 offers in England, but are not currently available in collective claims).
  • Settlement and distribution – BIST’s consultation seeks views on how to ensure that claims and settlements are brought to the attention of the class in an opt-out claim, as many claims struggle to appropriately distribute damages or settlement payments. This might include listing claims on the CAT website (a lot of class members naturally approach any communication about an unexpected financial windfall with significant suspicion) and requiring parties to take steps to bring compensation to the attention of class members. The government is also considering whether to continue distributing unclaimed damages or settlement payments to the Access to Justice Foundation (which is concerned with access to legal advice) or whether to distribute some of this money to consumer interest organisations such as Which?
  • Court fees – the CAT currently does not charge fees for the bringing of a claim so the cost of CAT proceedings is borne by the taxpayer. BIST is proposing the introduction of fees “initially only for private litigation” linked to the value of claims filed with an upper cap (presumably similar to the £10,000 cap that applies to claims for damages in the High Court of England and Wales).
  • The interaction of the regime with public enforcement – breaches of competition law come with two particularly big risks. In addition to potential criminal penalties and the disqualification of directors, businesses may be fined up to 10% of their global group turnover for breaching competition law and may be sued by any person who suffers loss as a result. As we noted above, the first business to “blow the whistle” on anti-competitive behaviour can secure immunity from fines but not from being sued by its own customers. BIST’s consultation proposes that businesses that obtain leniency should also receive greater protection from damages claims in order to ensure that the risk of these does not disincentivise whistleblowing behaviour.

The consultation also covers proposals to transfer regulatory appeals currently heard by the CMA to the CAT, harmonisation of procedural rules on appeals including standing, and changes to the costs of regulatory appeals, and measures to speed up competition investigations by the CMA including by giving it more flexibility over its approach to decision making in specific cases, loosening the CMA’s obligations to seek consent to share information that it has been given in connection with its investigations, and streamlining the process of settling investigations including by placing on a statutory footing the requirement that a settling party agrees not to appeal an infringement decision.

Comment

The changes proposed by BIST, if carried through, may significantly affect the landscape for opt-out collective actions in the CAT. The introduction of DBAs, earlier payment for funders, and costs rules disincentivising defendants from inflating costs through delay, are all likely to make opt-out actions more attractive in less valuable cases. On the other hand, that appears likely to be balanced out by other changes to give the CAT more discretion to reject weaker cases at certification stage, and changes incentivising ADR and settlement offers (and the acceptance of those offers) may end up making the CAT a more attractive forum for opt-out collective actions with genuine merit.

Contributors

Jamie Dunne

Legal Director

Charles Livingstone

Partner