“Sea change” for competition law

The UK Consumer Rights Act came into force this week, consolidating existing consumer legislation and giving consumers and small businesses new powers to bring collective actions.

Under the Act, opt-out collective actions can be brought in the Competition Appeal Tribunal against companies for breach of competition law—“a significant sea change,” according to Mark Simpson, antitrust and competition partner at Norton Rose Fulbright.

The opt-out mechanism means claims can be brought by a group of litigants without the need to identify all the claimants individually. The opt-out aspect applies to UK consumers and businesses only, but foreign claimants can “opt in” to the claim if they wish to join.

Simpson says: “The first cases are likely to be cases where a clear group of consumers have been harmed by blatant anticompetitive conduct, such as a cartel or abuse of a dominant position that the competition authorities have already identified.

“Despite what is often thought, such straightforward cases do not arise that often as it will not always be clear whether an infringement of the legal rules caused loss to consumers, and it is a difficult and complex exercise to calculate and prove that loss in a court. The most significant implication for corporates is that the new opt-out regime in the UK opens a new front for class actions for antitrust actions, in addition to the well-known battlegrounds in the US and Canada.”