On 26 March 2015 the Consumer Rights Act 2015 (the Act) received Royal Assent. Schedule 8 of the Act, titled ‘Private Actions in Competition Law’, introduces to UK law the concept of opt-out class (collective) actions for the first time.
This sounds like a significant development in the UK litigation landscape. While this development has generated seemingly endless debate about the benefits, or otherwise, of a class action regime, in reality, for a number of reasons, including the following, its effect remains to be seen:
Perhaps most interestingly for litigation funders like Vannin, is the prospect that it seems from the language of Schedule 8 that unclaimed damages from an opt-out class action may be paid to the class representative for “costs or expenses incurred…in connection with the proceedings.” This is being interpreted by many as meaning that the costs of litigation funding, including any funding premium, may be recoverable from any unclaimed damages, leaving available to those claimants making a recovery the full complement of their damages entitlement.
However, it is impossible to know at the outset of a case whether there will be unclaimed damages from which the funder can recover its investment and, if so, what the size of the unclaimed damages pot will be. If there are no unclaimed damages available, in reality, it may be difficult to see how the funder’s investment will be repaid, especially in circumstances where the expected damages return for each individual claimant may be relatively small.
The statutory regime for private enforcement of competition law is evolving. The introduction of Schedule 8 of the Consumer Rights Act has changed the landscape. The European Commission’s directive on Antitrust Damages Actions, which was signed into law on 26 November 2014 will, in due course, develop it further. Whether either will result in a sea-change in approach by the English courts remains to be seen.
For more information on Vannin Capital, please contact: Meika Aysal, Marketing at Vannin Capital, T: +44 207 099 5180, E: firstname.lastname@example.org