Last week, the Law Commission announced a new project, sponsored by the Department for Business and Trade (DBT), to “identify the benefits and risks associated with the introduction of a consumer class actions regime, having regard to other available mechanisms such as public enforcement action and alternative dispute resolution”.
The project will recommend how such a regime could be designed to improve consumer access to redress whilst also ensuring “the efficient conduct of litigation at proportionate cost” without furthering “speculative claims”.
In response, Seema Kennedy OBE, Fair Civil Justice Executive Director commented:
“We welcome initiatives aimed at protecting consumers and look forward to engaging with the Law Commission’s consumer project. The evidence, both internationally and within the UK’s current class action framework, demonstrates that litigation‑driven solutions – especially opt‑out claims – rarely result in meaningful compensation for consumers at scale.
Recently, a judge refused to grant a collective proceedings order, observing that the claim appeared to serve ‘the benefit of lawyers and funders’ rather than consumers. We hope the Law Commission will consider non‑litigious solutions.”
The announcement is a concerning development for both consumers and businesses as a consumer class action regime, potentially incorporating opt-out proceedings, would see thousands of claimants included in actions they took no positive steps towards joining. This could see damages from class actions surge, with lawyers and funders taking the lions share leaving consumers no better off, crippling SMEs.
FCJ welcomes the project’s focus on alternative dispute resolution and encourages the Law Commission to carefully consider non-litigation avenues to consumer redress. FCJ will continue to push for regulation that works for both consumers and businesses, ensuring the justice system is fair and transparent.
We have been pleased to see Seema’s comment feature across the media, in publications such as CityAm and The Law Society Gazette.
