ILFA Urges Government to Clarify Rather Than Rebuild the Opt-Out Collective Actions Regime
The International Legal Finance Association has filed its response to the UK Government’s consultation on competition redress, arguing that reforms intended to speed up the opt-out collective actions regime must not add cost or complexity that makes meritorious claims harder to fund.
The submission responds to the Department for Business and Trade’s consultation on “Swifter and Simpler Competition Redress, Regulatory Appeals and Competition Enforcement,” which opened on 17 July and closed on 25 September. ILFA’s central argument is that the Competition Appeal Tribunal and the appellate courts have already developed workable mechanisms for overseeing class representative suitability, and that the Government should deliver clarity through guidance and the formalisation of existing practice rather than new statutory or procedural requirements.
“Third-party litigation funding is the cornerstone of the opt-out collective actions regime,” said Neil Purslow, Chairman of the Executive Committee of ILFA. “Without it, consumers and small businesses would have no realistic means of bringing meritorious claims against well-resourced defendants. In our response, we make it clear that any new reforms must not inadvertently introduce cost or complexity, which only serve to make valid claims harder to bring.”
ILFA ties the Government’s proposal to permit damages-based agreements in collective proceedings to the unresolved question of funder returns. “Crucially, the Government’s proposal to permit damages-based agreements in collective proceedings underscores the urgent need to reverse the PACCAR ruling retrospectively,” Purslow said. “To keep this regime viable and investable, we must give funders earlier certainty over returns and introduce better cost budgeting to rein in unpredictable, disproportionate costs.”
On costs, the association supports mandatory costs budgeting for claimants and defendants alike from certification onwards, and greater use of alternative dispute resolution where it is required early and backed by real costs sanctions. It also backs a central CAT website for claims and settlements, while cautioning that efficiency measures such as reduced panel composition may yield only marginal savings.
“Maintaining a true equality of arms is essential,” Purslow said. “Large defendants should not be allowed to weaponise structural hurdles to quash meritorious claims and ordinary businesses and consumers must remain empowered to hold the powerful to account.”
