New consumer collective actions regime falls short of expectations

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New laws allowing consumers to bring follow-on ‘collective actions’ for damages against companies that breach competition laws have fallen well short of expectations, a London-based litigation funder has found.

In the year since the laws were introduced, only two such cases have arisen: one by the National Pensioners Convention against a manufacturer of mobility scooters, Pride, and the other on behalf of UK consumers against MasterCard.

According to Rosemary Ioannou at Vannin Capital, two main reasons why we may not be seeing a large number of collective actions include a potentially disadvantageous limitations period in which claimants must bring their case and the costs associated with bringing such actions. While dispute resolution funding companies can help to resolve the cost obstacle, they must also assess various factors in order to ensure the claim has a high likelihood of success.

The outcome and analysis of the first two collective actions will be useful for determining the success of future cases under the new regime, as well as its long term impact and whether the UK will remain the preferred jurisdiction for these types of claims.