The UK’s collective actions regime for breaches of competition law is one of the most important tools in our civil justice system, offering consumers and small and medium-sized enterprises (SMEs) redress against the largest corporations and ensuring that misconduct attracts liability that cannot simply be written off as a cost of doing business. It makes the rule of law effective at scale.
This is not just an abstract benefit. Collective proceedings are already exposing unlawful conduct, securing compensation and forcing changes in corporate behaviour. Claims in sectors such as big tech, financial services and transport have translated regulatory findings and corporate wrongdoing into legal proceedings and compensation, creating a genuine cost to misconduct and a clear incentive to comply with competition law.
Unlike regulatory fines, which are absorbed on balance sheets, accepted by wealthy corporates as a necessary cost of doing business and never reach those harmed, collective actions deliver accountability, direct compensation and can lead to better practices. The regime strengthens fair competition, builds consumer confidence and makes the UK a more attractive destination for responsible, long-term investment. After all, compliant businesses have nothing to be afraid of.
The question now facing government is whether we really are prepared to dismantle one of the UK’s core rule-of-law mechanisms as part of a Faustian pact with US corporate interests.
A regime that delivers accountability, fair markets and growth
Critics point to litigation funding, duplication with regulators, the spectre of ‘US-style’ litigation, a low compensation take-up and the bringing of weak claims. But these arguments misrepresent the UK position. The system is tightly controlled by the courts, underpinned by loser-pays costs rules and subject to strict certification standards. The regime is also for the benefit of businesses – not just consumers – particularly SMEs. Before 2015, small businesses generally could not bring damages claims because of the cost.
Furthermore, deterrence and disgorgement are important public policy goals. Weakening this regime would not only erode accountability, it would in practice dismantle much of private competition enforcement, removing one of the most effective checks on market abuse available to businesses and consumers alike.
The framework is still young. The current regime was introduced through the Consumer Rights Act 2015, which places it under the Competition Appeal Tribunal. The first certification only took place five years ago. Admittedly, the uptake of compensation awarded has been modest as courts and practitioners build experience. The position is likely to improve with better technology and increased awareness of the regime, while unclaimed awards can be directed towards worthwhile charities.
The benefits go well beyond compensation. Collective actions punish misconduct and reward compliance, creating markets where responsible businesses can compete fairly. They deter repeat offences, foster innovation and send a signal to investors: the UK is not a playground for exploitation, but a jurisdiction where fair competition is protected.
While recent uncertainty around funding has created friction, the core point remains: this is a court-led, proportionate mechanism designed to make civil justice work in cases where collective harm is widespread but individually modest.
The Department for Business and Trade’s current review must be approached with care. The judge-led Civil Justice Council only recently considered litigation funding and, following an extensive consultation, recommended light-touch improvements – focused on transparency, capital adequacy and judicial oversight – to sustain access to justice while maintaining confidence in the system.
The review cuts directly across this work and it is unclear why a review of the opt-out regime has been instigated so suddenly, and why it seems to equate the regime with a barrier to growth. For example, the report Fair play, published in May by the Institute for Public Policy Research, sets out how a stronger competition framework can rebalance power towards British businesses and workers.
The question is whether government will protect a principled regime that complements regulatory enforcement. The review is a chance to set the record straight. That means: preserving the core architecture of opt-out collective actions, especially where they are the only practical route to redress; maintaining the loser-pays principle as well as active judicial gatekeeping; providing clear funding rules consistent with the CJC’s recommendations; and bringing improvements where needed.
The prize is a justice system that delivers compensation to those harmed, deters misconduct at scale and supports competitive markets. The risk is a premature policy over-correction that undermines redress, rewards non-compliance and sends the wrong signal about the UK’s commitment to predictable, rules-based markets.
Consumers and SMEs must have real access to justice, so that responsible businesses compete on a level playing field and that confidence in the UK’s legal system remains one of this country’s enduring fortes.
Scott Campbell is a partner and head of competition disputes at Hausfeld, London
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