Ten years on: class actions at a crossroads

1 October 2025 marked ten years since the UK’s collective proceedings regime came into force, ushering in American-style “opt-out class actions” to the UK legal system for the first time. However, just two weeks later, a call for evidence from the Department of Business and Trade on the future of the regime closed. That call for evidence followed the Civil Justice Council’s report into litigation funding, published in the summer, which scrutinised the means by which collective actions are being financed. The regime therefore finds itself at a crossroads, with reform of some sort looking likely in 2026.

So how did we get here? The regime got off to a slow start, with the first couple of cases concerning mobility scooters (Gibson v Pride) and interchange fees (Merricks v MasterCard) failing at the certification stage. However, Merricks was appealed up to the Supreme Court, which set a low threshold for certification, leading to the floodgates opening and cases being filed at a rate of more than one per month, before a recent slowdown in new filings. As it stands, there are over 50 cases before the Tribunal pending resolution, with a combined claim value of almost £100 billion. The low certification threshold and ready availability of willing litigation funders drove this surge of cases, and has led to many ambitious cases which would not traditionally be thought of as competition law disputes being “shoehorned” into the CAT to take advantage of the opt-out regime (which is only available for claims concerning competition law).

However, as to the recent slowdown in filings, the last 12 months has arguably seen a tightening up of standards and potentially the early beginnings of a bubble bursting. We had the first trial judgment under the regime (in Le Patourel v BT), which found in favour of the defendant and left the funders and insurers of the claim with a heavy own-side and adverse costs legal bill. We have also seen the first three post-Merricks cases to be denied certification (Riefa, Water and PRS) and a collective action concerning train ticket boundary fares (Gutmann v South Western Trains) defeated on liability grounds at the first stage of a split trial. Further, funder appetite has slowed as many funders privately say they’ve committed as much capital to the regime as they are willing to commit before they receive a return on investment. Until recently, only a small number of relatively low-value settlements had resulted from the regime, followed by a very small take up from the class (less than 1% of the settlement pot) in the only claim to have yet distributed compensation to consumers.

This series of setbacks for those promoting the regime has, however, recently been reversed with the first successful trial outcome in which Dr Rachel Kent secured what her lawyers estimate is a £1.5 billion payout for consumers. Claimant lawyers and litigation funders have been quick to seize on this judgment as providing a shot in the arm for the regime.

Looking ahead to potential reform next year, claimant law firms and litigation funders are pushing for the regime to be broadened out to cover other areas of law (such as consumer law claims). 

Business leaders, on the other hand, are seeking to restrict the regime and commonly express three main complaints about the current system. Those are that claims under the regime have often (but not always): been originated by lawyers and funders rather than consumers; alleged abuses of dominance for conduct which would never previously have been considered a competition law infringement; and been highly speculative in terms of causation and loss being suffered by the class. They have therefore called for a narrowing of the regime to exclude creative and speculative claims through a higher standard being applied to the certification of claims. On claim genesis, the Civil Justice Council’s litigation funding report proposes preventing lawyers and funders bringing cases to class representatives, meaning class representatives will need to originate the claims. If enacted, this is likely to have a chilling effect on the regime.

All eyes are on the government, to see what legislative developments may await the collective actions regime in 2026. 

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