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In the UK, legal advocates have pushed back against the possibility of developing a class action system like that of the United States for a long time due to concerns about costs, benefits, and potential challenges. However, this system may be changing and change may be coming sooner than anyone thought.
What is a group litigation order (GLO)?
In England and Wales, a Group Litigation Order (GLO) is the main form of collective action. GLOs are “opt-in” in nature. This means that every individual who wishes to make a claim under the GLO must make it separately, opting-in to the litigation. Damages from the litigation are then divided among eligible claimants who actually submitted a Claim Form.
U.S.-style class actions
In the US class action litigation occurs when one or more plaintiffs file a lawsuit on behalf of a larger class of members in a similar situation. These class actions are opt-out, not opt-in, meaning any eligible class members will be included in the action without having to file any kind of claim form.
UK class actions may be changing
The British government maintains an updated guidance with a list of Group Litigation Orders. Notably, only 108 have been seen in the last 20 years. However, the number of class actions filed in the UK may be about to change significantly.
Historically, it has been difficult for class action lawsuit in the United Kingdom to secure as many participants as possible in the litigation through opt-in procedures. In 2015, with the introduction of the Consumer Rights Act of 2015 that amended the Competition Act of 1998, that began to change as opt-out procedures became an option. Opt-out litigation can significantly increase the value these class action claims pose.
Great Britain has been using specialised tribunals to test out the viability of class action lawsuits. Currently, the Competition Appeal Tribunal (CAT) is reconsidering whether or not a lawsuit against Mastercard can be certified as a Collective Proceedings Order and proceed as a class action. Initially, back in 2017, CAT refused the CPO application for this litigation. But in April 2019, the Court of Appeal dismissed that decision, and CAT now has to consider the CPO application once more.
So far, the Consumer Rights Act of 2015 only addresses claims over infringements of competition law, but depending on how the Mastercard decision goes, this could change.
The results of this decision will likely be significant. The MasterCard claim was launched on behalf of 46 million consumers in the UK, according to The Guardian. The potential value of the claim? A whopping 14 billion pounds. According to the claim, Mastercard had breached competition laws by charging retailers unlawful fees for a period of more than 16 years, between 1992 and 2008. This, in turn, led to consumers being overcharged for their purchases, the claim stated.
This case may lead the way for significant change in how class actions in Great Britain function in the future. Conversely, it may end up shutting down the possibility of widespread class action change for years to come.
To add urgency to the situation, the European Union adopted a proposal for mass claims in consumer protection lawsuits through the Collective Redress Directive. These rules seek to more effectively protect consumers from “mass harm” scenarios.
With the Mastercard decision yet to come, the European Union’s proposed rules for mass claims, and a growing number of situations in which large numbers of consumers are being affected by the same issue, change for UK class action litigation seems to be on the horizon.
