Courts hearing competition cases should have discretionary powers to cap costs and allow solicitors to charge more than a 100% uplift on success fees, the Office of Fair Trading (OFT) recommended this week.


The OFT has asked the government to consider several proposals to improve compliance with competition law in the UK, and enforcement by individuals and businesses.



Almost a quarter of 202 companies surveyed by the OFT believed they had been harmed by a breach of competition law, yet only five decided to bring an action. The most commonly cited reason for not doing so was that the expected costs outweighed the benefits.



The OFT also recommended allowing representative bodies, such as Which?, to bring standalone and follow-on representative actions for damages and applications for injunctions on behalf of consumers (named or consumers at large).



David Greene, vice-president of the London Solicitors Litigation Association and head of litigation at Edwin Coe, said the reforms are 'potentially dramatic' and that granting judges the power to decide whether to cap costs would be 'quite a step forward for litigators'.



He said the current 100% uplift limit is based on a 50-50 chance of winning but 'the chances of success in a competition case can be lower than 50-50, partly because of complications in cases and partly because of costs'.



Mr Greene added that the recommendations would be 'paving the way for class actions of a nature' by 'suggesting that where you have got a representative action brought by a body, all consumers should be included unless they opt out'.



Robert Musgrove, chief executive of the Civil Justice Council, said it was a 'well-constructed paper with the consumer at its heart'. On the proposal to drop the success fee cap, he said: 'We will have to look at the wider implications of what is effectively a contingency fee.'



A Department for Business, Enterprise and Regulatory Reform spokesman said it is 'considering the report now with great interest.'



Anita Rice