The Opt-out Collective Actions Regime Review: Call for Evidence - Which? Response

Which? strongly supported introducing the Regime and its aims to provide access to justice for consumers who have suffered loss from competition law breaches, and deter anti-competitive behaviour. It follows that Which? firmly supports DBT’s commitment to consumer protection and achieving the Regime’s aims, and the government’s position that consumers should have a right to redress. Fair and competitive markets are ones that consumers can confidently participate in, providing an engine for economic growth.

Ten years from the introduction of the Regime in 2015, outcomes so far are limited. An accurate picture demonstrates that only a modest number of claims are being progressed. These claims feature both opt-in and opt-out, stand-alone and follow-on, consumer and business classes. Only the case of Justin Le Patourel v BT Group Plc has reached a final judgment; there have been partial settlements in two cases and a final settlement is subject to a judicial review challenge in Merricks v Mastercard; distribution has occurred only on the partial settlement in the Justin Gutmann v First MTR South Western Trains Limited and Another (the so-called Boundary Fares claims), returning approximately £216,500 to consumers and an additional £3.8 million is set to go to the Access to Justice Foundation; 7 certification has been denied in four claims. To date, consumers’ direct benefit from the Regime has been disappointing, though it remains the only realistic mechanism for access to justice for breaches of competition law. Evidence of the Regime’s ultimate effectiveness is still emerging, and will be significantly supplemented in the next two to five years by anticipated outcomes of multiple claims that are well advanced.

The context in which the Regime sits has also changed. Since inception in 2015 the UK has left the EU and the Competition and Markets Authority (CMA) now has primary responsibility for public competition enforcement. The period has also seen the continued concentration of power within a handful of businesses, particularly global online platforms and technology companies. Regulatory responses have followed, with the establishment of the Digital Markets Unit at the CMA and Digital Markets, Competition and Consumers Act 2024 (the DMCCA). It is unsurprising that private enforcement mirrors these changes, despite the focus of the 2012/13 impact assessment. 

However, it has become clear through Which?’s experience as a participant in the Regime and as an interested stakeholder, that the Regime is being held back by costs, delay, uncertainty and the narrowness of its scope. These issues are hindering the Regime’s aims and reducing its effectiveness. In particular:

• Costs: the costs of litigating claims under the Regime are extremely high, whether opt-in or opt-out, creating a significant barrier to access to justice. Government should therefore explore how costs can be meaningfully reduced, including through mutual costs budgeting, greater availability of costs capping, availability of public funding and insurance, costs shifting and rebuttable presumptions favouring claimants.
• Delays: claims under the regime are taking too long to resolve, which in turn increase costs and delays redress for consumers that have suffered harm. In addition to suggestions above, the government should therefore explore how claims can be progressed more quickly, including through increased resourcing for the CAT, early targeted disclosure, fast-track permission/appeal mechanisms, reduction in or early resolution of satellite disputes and greater use of ADR for parties.
• Uncertainty: also linked to costs and delay, is the uncertainty stemming from the limited outcomes and continued evolution of Regime jurisprudence, which is discouraging investment in claims, further reducing access to justice and the Regime’s effectiveness.
• Scope: the Regime’s restriction to competition law infringements means that claims that might otherwise or in the alternative be brought, for example, as a (more simple, cost-effective) consumer law claim are being pursued under the Regime as there is no viable alternative. It has long been Which?’s position that opt-out collective actions should be more widely available, including for breaches of consumer protection laws. To further the government's position that consumers should have a right to redress and to better achieve the Regime’s aims, Government should take this opportunity to expand the Regime.
• Other redress: the Regime should do more to encourage early resolution of claims, and we are supportive of redress via other avenues provided effective safeguards are in place. For example, voluntary redress schemes and the extension of CMA powers to mandate redress for competition infringements. 

Which? views these issues as ones of implementation and scope, rather than structure: the framework established by section 47B of the Competition Act 1998 (CA98) remains appropriate. At the same time, Which? is aware of extensive and self-interested lobbying against the Regime, and believes the claimed costs to businesses and the wider economy are exaggerated. We caution against changes (including those that are well intentioned) that could neuter the Regime, for example, by making private funding uncommercial. Interventions at this stage in the Regime’s development should therefore be limited to addressing issues of implementation.