A US industry body has added its voice to concerns about government plans to simplify collective actions under competition law.
The US Institute for Legal Reform echoed the Confederation of British Industry’s (CBI’s) warning that US-style collective actions would ‘fuel a litigation culture in the UK’.
Scevole de Cazotte, vice president of the ILR, said: ‘We have direct experience in the US of how damaging opt-out collective actions can be towards businesses and consumers. The government’s proposals will only lead to an increase in litigation, with the threat of ever more spurious cases in the UK.’
The simplification plans appear in the government’s response to a consultation ‘Private Actions in Competition Law’. They involve:
- Making the Competition Appeal Tribunal the main court for competition actions, with a new fast-track regime.
- Introducing an opt-out regime for collective actions, under which ‘appropriate representative bodies’ will be able to take a group or collective action in court. Groups of consumers or businesses will automatically be included in the action unless they opt out.
- Promoting alternative dispute resolution. Businesses that have had claims made against them will be able to propose collective settlements to the tribunal.
The Law Society welcomed the proposals. Lucy Scott-Moncrieff, president, said: 'We responded to the consultation on this last summer and we are very pleased with the key changes proposed, particularly the introduction of opt-out collective actions and the expanded role for the Competition Appeal Tribunal. The current system simply isn’t working.'
owever she added: 'It’s disappointing that some kinds of fee agreements will not be available for these actions. Similarly, it’s a shame that law firms will not be able to bring opt-out actions themselves to help prevent anti-competitive behaviour. We supported the suggestion which would have permitted law firms to be certified by the courts with proper safeguards to ensure there was a genuine interest in bringing a case, but the government decided against this.
However, it is good news that further access to justice for the public will be supported by the fact that any compensation that has been awarded to affected individuals in a successful collective action but not claimed, will be paid to the Access to Justice Foundation, an independent charity.'