United Kingdom

OVERVIEW

While litigation by multiple claimants is possible in the UK in certain circumstances, there is currently no procedure which provides for class actions of the kind seen in the United States.

However, the Government has announced that it intends to introduce an "opt-out" collective action regime specifically for claims based on antitrust law. This proposal, which is described in more detail below, is specifically designed to encourage more antitrust litigation under the mistaken premise that this will stimulate the economy. The proposal is being fiercely opposed by ILR. (Read ILR's letter to the Secretary of State for Business, Innovation and Skills and accompanying comments on the Government's proposals).

Separately, the Government is expected to bring into force on April 1, 2013 a package of significant changes relating to civil litigation costs and funding in England & Wales. These changes include, most notably, lifting the prohibition which currently prevents lawyers from conducting litigation in return for contingency fees.

The changes in the way litigation will be funded, the possible introduction of opt-out class actions and the continuing growth of a litigation funding industry which is not subject to specific regulation, suggest that the UK is showing ever greater openness to the mechanisms which have led to litigation abuse in other jurisdictions. It is thus travelling down a dangerous road. ILR continues to campaign to highlight the risks to the UK government.

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Issues/Research: United Kingdom

ILR Response to the BIS Consultation on Private Action in Competition Law

The U.S. Chamber Institute for Legal Reform (“ILR”) questions whether a need exists in the UK for private collective redress in the field of competition law.  Moreover, if such a need does exist, ILR does not believe that the proposals set out in the consultation of the UK Department for Business Innovation and Skills (“BIS”) entitled “Private Actions in Competition Law: A Consultation on Options for Reform Consultation” would be the best approach.  ILR believes that the proposals, if implemented, will have a number of unintended negative consequences for consumers and for the administration of civil justice in the UK.  In addition, if the proposals were implemented, they would to some extent supplant public enforcement of competition law by competition authorities with private enforcement by self-interested claimants. LEARN MORE »

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ILR Comments on the Code of Conduct for Litigation Funders

The UK Civil Justice Council (“CJC”) has proposed a draft code of conduct to govern third-party litigation funding (“TPLF”) under the auspices of a proposed voluntary association, the Association of Litigation Funders.  The proposal for regulating Litigation Funders envisioned by the draft Code implicitly recognizes that third-party litigation funding threatens to undermine consumer interests and foster litigation abuse.  The Code, however, is inadequate.  As a threshold matter, it does not have the force of law. 

The U.S. Chamber Institute for Legal Reform states that the only way to adequately safeguard the rights of consumers and defendants – and promote the orderly administration of civil justice in England and Wales – is to enact a statute that is binding on all Litigation Funders. LEARN MORE »

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October 2011 ILR Letter to the UK Ministry of Justice

In this letter to the UK Lord Chancellor and Secretary of State for Justice, the Rt. Hon Kenneth Clarke QC MP, the U.S. Chamber Institute for Legal Reform (ILR) expresses grave concerns in relation to the Civil Justice Council (CJC) Code of Conduct on Third Party Litigation Financing (TPLF).  ILR suggests that rather than endorsing an inadequate self-regulatory code, the Government should take time to consider the case for a mandatory set of safeguards for TPLF.  ILR explains in its letter why strong safeguards are necessary and suggests that the Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO Bill) provides a suitable opportunity to create the power for such safeguards to be put in place following a full consultation. LEARN MORE »

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July 2011 ILR Letter to the UK Ministry of Justice

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ILR Response to CJC's Self-Regulatory Code of Conduct

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ILR Response to 2010 UK Financial Services Bill

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ILR Response to December 2009 Final Report

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Third Party Financing: Ethical and Legal Ramifications in Collective Actions

Third Party Financing: Ethical and Legal Ramifications in Collective ActionsThis paper begins with an overview of third party litigation financing. It next examines the current third party financing practices of a number of European jurisdictions. Then, it sets forth ILR’s critique of the practice, particularly the incentives it creates to engage in frivolous and abusive litigation. ILR also presents a case study of the Commonwealth of Australia, the first jurisdiction to permit third party litigation funding, where such funding has dramatically increased litigation and given investors pervasive — even total — control over a claimant’s case. Finally, the paper concludes that such funding should be prohibited altogether in collective litigation.

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