Following the entry into force of the Consumer Rights Act 2015 (the CRA), class actions by a far wider category of claimants can now be brought in the Competition Appeal Tribunal (the CAT). In this article we analyse the potential use of the CAT as a forum for corporate class-actions with a multi-jurisdictional dimension.

Key issues

England and Wales is already one of the most popular jurisdictions for both follow-on and stand-alone competition claims in Europe. The shortage of reported judgments is not reflective of volume, given that many of these claims are settled at an early stage or are brought via an arbitration. But this has not been the case with class actions. However, following the entry into force of the CRA on 1 October 2015, not only are a far larger number of follow-on class actions permissible, but the CAT now has the power to make a determination of the facts itself in stand-alone cases. Looking forward, some of the factors that will determine whether the English legal system will attract more class action claims by the victims of cartels and abuse of dominance include:

  • The ease by which a collective action can be initiated.
  • How such claims can be funded.
  • Cross-border issues (particularly concerning evidence).

Collective actions

Under English law the assignment of a number of existing actions to a single claimant can happen under a group litigation order1. This is a case management tool by which, following an application, the court can conjoin multiple claims involving “common or related issues” of fact or law. But, each claimant has to initiate its own claim beforehand, so clearly this is unsuitable for large class actions. Representative claims are also permitted where more than one person has the “same interest” in a claim2. This is theoretically similar to a class action, but is rarely used in practice.

Prior to the introduction of the CRA, collective actions were permitted in consumer competition cases. These were only for “opt-in” cases, where claimants had to elect to join an action in order to be entitled to any damages. This clearly limited the efficacy of collective redress, as did the fact that only consumer organisations, such as Which?, could bring collective claims before the CAT. Now, for competition disputes, this representative function is available to any person or body, so long as the CAT determines that it is “just and reasonable” that it assumes this role.

In theory this permits the creation of companies to amalgamate claims and litigate for profit. Already a number of high-profile US law-firms with class action practices have opened offices in London. But it is unclear to what extent English judges will accept the more aggressive practices of some litigation funders. Traditionally, the courts have analysed the assignment of a claim, necessary where a funder sues in its own name, and assessed whether the arrangement poses a risk of corrupting public justice. Whether the CAT will be flexible in granting authorisation to be a representative of a class in this new era is therefore a moot point, but it is noteworthy that an initial proposal explicitly to exclude lawyers and litigation funders from the representative role was reversed. It would therefore appear that this should not be an insurmountable hurdle.

Similarly, the test for certification of a claim, namely being allowed to join the class action as a claimant, appears to be less burdensome than it might have been. It will not require a deep analysis of the merits, merely that there should be “some basis in fact” for the claim. By contrast, in the US obtaining permission to join an existing class-action will often require factual and expert analysis.

Crucially, under section 47B of the CRA, class actions can now be brought on an “opt-out” basis. Under this system, class representatives have the power to bring claimants into a class action through the definition of the class. So long as these claimants meet the relevant criteria (for example customers of a certain company) they will be bound by the court’s judgment, unless they have previously opted-out of the class. However, this will not apply to non-UK claimants, who will still need expressly to opt-in for any class action brought in the English courts. This will, to some extent, limit the scope of multi-jurisdictional cases as it will be necessary to persuade foreign claimants to litigate in the UK.

Another limiting factor on these new actions will be the definition of the “class” of claimants. Representatives will attempt to make this as wide as possible, in order to increase the class-size, but ultimately it is the CAT that will decide on the description of persons whose claims are eligible for inclusion in the proceedings.


Deterrents against bringing class actions are the:

  • Heavy cost of bringing litigation.
  • Fact that under English law the loser typically pays a significant proportion of the winner’s legal costs.

The second of these has been intentionally retained within the CRA and was an attempt to limit the excesses of the US class-action regime, where each side pays its own costs regardless of who wins, hence incentivising the bringing of claims.

Generally England and Wales is considered a flexible jurisdiction for litigation funding. There is no statutory regulation, although a voluntary code does exist and safeguards are imposed by the courts to avoid vexatious litigation. One way that a claimant can manage its costs risk is via insurance, either under an existing policy or after the event (ATE) insurance which covers the costs arising from the loss of a claim. However, there are limits to what is permitted in English courts.

  • The Criminal Law Act 1967 abolished the crimes of champerty (the division of legal spoils) and maintenance (wanton and officious intermeddling in the disputes of others), but the Act maintained the common law position that for reasons of public policy some funding agreements will be found illegal. Each case will be assessed separately by the courts. Therefore, where a third party funder attempts to exercise control over the conduct of litigation, it risks finding that its funding agreement is unenforceable.
  • Claimants are permitted to enter into a conditional fee arrangement (CFA) under which the client only pays its lawyer’s fees if the claim is successful, and where the lawyer receives a success fee as a percentage uplift on the normal costs (to a maximum of 100%). Of course, even with a CFA, an unsuccessful claimant could face a large legal bill from the opponent, which is where the ATE insurance comes into play.
  • However, under Schedule 8 (para 6.8) of the CRA, lawyers acting in class actions are prohibited from issuing claims on damages-based agreements (DBAs). These are contingency fee arrangements, permitted in certain civil claims, under which the legal team is paid a proportion (%) of the award received.

The restriction on DBAs is likely to have a chilling effect on some types of class action. Without them lawyers will be less likely to take up marginal or lower-value cases. Furthermore, unlike in the US the CAT will be restricted from awarding “exemplary” damages, so by comparison with the American regime the pickings for litigation funders could well be relatively slim.

Cross border issues


The key advantage of a follow-on claim is that the facts do not need to be proved. Claimants can use the findings of a UK or EU competition authority as evidence of the existence of the cartel. EU Commission decisions are binding on English courts, while the findings of other European National Competition Authorities constitute prima facie evidence that an infringement of competition has occurred. Frequently, however, the problem has been the asymmetric distribution of key evidence that is necessary for a claimant to prove causation of damages and quantification of loss.

This was the reason behind changes introduced by the EU Damages Directive3. This will be implemented in the UK by 27 December 2016, and will facilitate discovery in class action cases. It stipulates that the files of competition authorities of a Member State are discoverable by claimants in the same Member State. The files of the EU Commission are in theory discoverable in follow-on actions in the courts of any Member State.

There are however limits to what is discoverable:

  • Any request must be reasoned and proportionate, so not a fishing expedition. The generic disclosure of documents is not permitted, rather claimants must provide proper categories of evidence of which they seek disclosure.
  • The following may only be disclosed after the competition authority has closed its proceedings:
    • Information prepared by a natural or legal person specifically for the proceedings of a competition authority.
    • Information that the competition authorities have drawn up and sent to the parties during the proceedings.
    • Settlement submissions in early resolution cases that have been withdrawn, by infringers who have pulled out of settlement talks.
  • Disclosure of the following is never possible:
    • Leniency statements by whistleblowers, except for evidence that exists irrespective of the proceedings, whether or not this is in the competition authority’s files.
    • Settlement submissions in early resolution cases by applicants seeking a reduction in fines.

Conflict of laws

In order to attract large-scale class actions the new regime will have to work effectively with international conventions that aim to solve conflict of laws issues. The requirement of non-UK claimants having to opt-in reflects in part the practical limits of public international law: an opt-out system is in theory a final determination for all those who fall within the class, so having this determination made in the English courts would arguably impinge on the sovereignty of claimants in other legal systems if it precluded actions there under the doctrine of res judicata. However, some jurisdictions, for example the Netherlands, permit courts to approve settlements that cover non-domestic parties who have failed to opt-out. The danger therefore is clear: forum shopping. Ideally it would be clear what the effect of any future CAT decision is on the rights of potential claimants and defendants situated in other jurisdictions.

However, given that the recast Brussels Convention does not cover these types of actions, this is not the case. While the enforcement of judgments on defendants is theoretically possible, there is no uniform methodology of application for enforcement within the EU, which is not surprising given that the law on collective proceedings varies by Member State. It remains to be seen whether opt-out settlements will be accepted by the courts of other Member States and in particular whether these settlements would pass a local “public policy” test. It is possible that Member States will take different views on the enforceability of opt-out decisions emanating from other EU jurisdictions with looser rules on class actions, in which case public policy could theoretically be used as a ground for refusing recognition and preventing enforcement.

In 2013 the European Union published a recommendation on collective redress. Although non-binding, it included various principles that each Member State is encouraged to pursue: for example that procedures are “fair, equitable, timely and not prohibitively expensive”. However, the recommendation stipulated that opt-in systems were preferable to opt-out systems. Whether this undermines the ability of UK opt-out decisions to be enforced in other Member States remains to be seen.


There is no doubt that the new class action regime introduced by the CRA is flexible in terms of the structure of collective actions but, by comparison to the US, England is relatively restrictive in terms of funding options and the damages available. Meanwhile, the EU regime is becoming pro-claimant regarding the rules of disclosure, but the ease of enforcement of CAT judgments outside of the UK remains open to question.