The Law Commission, which advises the government on law reform, will begin work on the project in the autumn, assessing how to improve access and distribution of damages while maintaining proportionate costs. It has invited lawyers and other stakeholders to complete an initial scoping questionnaire by 30 October.
The Commission will assess whether certain sectors are disproportionately targeted by litigants, evidence of pent-up demand for opt-out consumer claims, and whether opt-out claims are vulnerable to being exploited and creating a litigation culture.
It will look at the benefits and risks involved, funding, costs, settlement, the definition of ‘consumer law claim’ and ‘class’, and whether the regime should allow ‘opt-in’ as well as ‘opt-out’ claims.
Martyn Day, co-president of the Collective Redress Lawyers Association (CORLA), described the project as ‘a timely and important step towards closing the UK’s justice gap.
‘At present, the avenues open for large groups of individuals with the same claim to take legal action against companies are limited, so a mechanism that makes it much easier for those groups of individuals to club together makes great sense. It is also a step in the right direction in terms of us not being left behind by our continental European neighbours who are implementing the EU Representative Actions Directive that allows opt-out cases to be brought on behalf of consumers.’
Jeremy Marshall, chief investment officer at third-party funder Winward Litigation Finance, said: ‘For it to work in practice, it is vital that the government recognises and protects the role of litigation funding, without which these claims can’t be brought. They should have a good look at how funders and consumer groups have worked collaboratively in Australia.’
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