Not Everything Can Be a Competition Issue – a New Dawn for Consumer Redress

Why It Matters

A consumer‑focused class‑action regime would improve access to justice while reducing litigation costs and uncertainty for businesses, aligning redress with the appropriate legal basis. It also restores confidence for litigation funders by curbing speculative, low‑value claims.

Key Takeaways

• Law Commission launches consumer class‑action review after 11‑year competition regime
• Current CAT cases often exceed costs, delivering minimal consumer payouts
• Proposed regime aims for faster, cheaper redress within proper legal frameworks
• Litigation funders may return if claims become proportionate and transparent
• Deadline for questionnaire responses is 30 October, shaping future UK consumer law

Pulse Analysis

The Competition Appeal Tribunal’s opt‑out collective actions were introduced to give small‑value claimants a route to recover damages from anti‑competitive conduct. In practice, lawyers and litigation funders have re‑characterised consumer, data‑privacy and environmental grievances as competition breaches, creating multi‑million‑pound lawsuits that strain court resources. The result has been a handful of trials, one win, two settlements and two failures, with most of the awarded sums never reaching the affected consumers.

Recognising these distortions, the Law Commission’s new project aims to craft a consumer‑class‑action framework that operates within the appropriate statutory context. By decoupling redress from competition law, claimants could avoid the costly burden of proving market‑wide injury, while defendants would face claims evaluated under consumer protection standards. The initiative dovetails with the Digital Markets Competition and Consumer Act, which already empowers the CMA to fine firms up to 10% of global turnover for consumer law breaches, signalling a broader regulatory shift toward stronger consumer safeguards.

If implemented, the regime could streamline dispute resolution, lower litigation expenses, and encourage settlements that deliver tangible compensation. For businesses, clearer rules reduce the risk of unexpected competition‑law exposure, while litigation funders gain confidence from more predictable, proportionate claims. The consultation deadline of 30 October will shape whether the UK moves toward a balanced, efficient consumer redress system that benefits claimants, defendants, and the wider market.