Former government ministers have given their backing to a new lobbying front created to repel big business attempts to water down the competition regime.
Campaign group Competitive Britain launched this week vowing to fight for the preservation of the collective opt-out regime. The government has pledged to consult on proposals later this year to refine the opt-out regime, where claimants in group actions are automatically included by default unless they actively choose to opt out.
The opt-out regime was created by the Consumer Rights Act in 2015. Business-funded campaign group Fair Civil Justice has already made the case for reform, with its opposite number Competitive Britain setting out its agenda at a Westminster launch on Tuesday.
In a foreword to the Competitive Britain report accompanying the launch, former tech minister Damian Collins said the effective enforcement of competition law has kept prices lower for consumers, helped innovative businesses compete and improved productivity.
He added: ‘There are of course opponents to the regime, and unsurprisingly they are drawn from the ranks and allies of the major gatekeeper businesses who often find themselves subject to regulatory challenge or legal action. They want to neuter the regime to make it practically impossible for groups of claimants to challenge their anti-competitive practices.’
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Collins, who is now head of policy with advisory firm Geradin Partners, added that while competition regulators have the power to enforcement action against companies that hold dominant power, they do not have the time or resources to investigate every case, meaning that collective claims are needed to hold companies to account.
Former lord chancellor Robert Buckland spoke at the launch and stressed how this issue should not be dismissed as an arcane debate of interest only to lawyers.
‘It is not just about damages, it is about the correction of poor behaviour such as cartels [which] not only causes considerable harm to consumers but frankly damages the reputation of the UK,’ he added. ‘The more we resource institutions like the CAT the more we build the reputation of our country as a safe place for investment.’
The Competitive Britain report responded to many of the pro-business lobby arguments around net cost to the economy and the reportedly small amounts that consumers sometimes recover in compensation.
On the first point, it said that redress obtained by claimants represented a ‘transfer of resources rather than a net loss’, and while legal fees can be high, they are borne on the market by litigation funders.
The report also stated that the average value of redress per class member was £1,473 for individuals and £139,886 for businesses.
It added: ‘Even much smaller amounts – for examples, the £45-£70 payable to consumers in Merricks v Mastercard – remain significant for a large proportion of UK households, of whom one in 10 have zero cash savings. Lower income consumers often bear the brunt of anti-competitive behaviour; for these consumers, redress is particularly important.’
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