Funders of collective actions would stand to receive their payback more quickly and parties that behave unreasonably be subject to stricter cost sanctions under light-touch proposals for reform of the Competition Appeal Tribunal jurisdiction unveiled on Friday. 

They also reveal that the government has decided not to expand the scope of the opt-out collective regime to other areas of law - or to narrow it just to competition law claims that follow the decision of a regulator. 

The proposals to make the opt-out collective action regime 'swifter and simpler' followed a call for evidence last year, the tenth anniversary of the Consumer Rights Act. Claims firms and funders broady welcomed the proposals, which include widening the routes to funding of claims.

If adopted, the reforms would require the CAT to indicate the 'reasonableness' of the funder's return at the point of certification of a claim. A cost-benefit analysis at this stage would guard against claims being brought that would primarily benefit lawyers and funders. However the proposed new regime would introduce a presumption that funders receive their return at the point of a damages award being ordered rather than waiting for the outcome of damages distribution. 

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The proposals also reveal that the government is considering lifting the prohibition on funding collective claims through damages-based agreements (DBAs). 'An increase in options for funding claims could increase competition and therefore drive down the cost of litigation finance, mitigating the risk of a justice gap and increasing the resilience of the regime,' the document states. It notes that currently a claim must have a value of £500m or more to interest litigation funders. 

The consultation seeks views on strengthening incentives to engage in settlement discussions, including allowing settlement offers with automatic cost consequences. It also raises the prospect of the CAT, furrently paid for from central funds, levying court fees linked to the value of claims filed.

Another proposal is for the Consumers' Association to join the Access to Justice Foundation in sharing unclaimed balances from damages distributions. 

Consultation on the proposals closes on 25 September. 

Nicola Boyle, London managing partner at international claims firm Hausfeld, described the proposals as 'a good day for access to justice'. She continued: 'Ministers have resisted intensive lobbying by American corporate interests and have come down in favour of the many, not the few. It is a good start to Mr Burnham’s premiership.'