The Government’s plan to make it easier for class action litigation to take place against commercial enterprises has come up against strong resistance from the Confederation of British Industry (CBI).
The changes will require consumers and businesses to ‘opt out’ of litigation, as opposed to opting in, which they are currently required to do. The CBI claims that making it easier to file lawsuits to claim compensation for a group of consumers under a single umbrella claim could prove disastrous for businesses.
The measures have been announced by Business Minister Jo Swinson, who claims it was important for consumers to be able to “take appropriate action”. Group claims for compensation for anti-competitive behaviour could come thick and fast if the proposed changes to the law take place.
The CBI’s chief policy director, Katja Hall, claimed the action could move the UK towards the US culture of collective action. She explained that the proposed changes could be extremely bad news for UK businesses: “By grouping potential claimants together indiscriminately these ‘opt-out’ actions fail the growth test and will fuel a litigation culture in the UK.”
She added that existing legislation, such as the alternative dispute resolution could help consumers and businesses to avoid being caught up in needles litigation. Ms Hall added that it was “absolutely right that victims of competition law breaches are properly and swiftly compensated,” but added that there are more effective ways of doing this.