The Supreme Court’s landmark ruling in R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28, suggests litigation funding, which is linked to a return based on a percentage of damages, is a damages-based agreement therefore not permitted in opt-out collective actions.
PACCAR could be reversed through an amendment to the Digital Markets, Competition and Consumer Bill, which passed its third reading stage in the Commons last week. This would provide a statutory basis for litigation funding in opt-out proceedings.
Members of the Collective Redress Lawyers Association (CORLA), gathering for their autumn conference last week, welcomed the amendment but called on MPs to go further: review the whole collective action regime, boost consumer rights and ensure consumers can pursue claims against unscrupulous organisations.
CORLA co-president David Greene said: ‘Consumers need much more certainty as to process and financing to ensure access to justice and the enforcement of their rights.’
CORLA co-President Martyn Day said: ‘The Competition Appeal Tribunal continues to ensure the opt out process in competition claims works as best as possible.
‘But there is no reason why the opt out process should apply simply to competition claims. We want to see a much wider ability for consumers to get together to pursue their rights.’
Last week, the Competition Appeal Tribunal certified its first post-PACCAR claim, a £5bn claim against Sony Playstation, in Alex Neill proposed class representative v Sony Interactive Entertainment Europe & Ors [2023] CAT 73.
Following PACCAR, the class representative entered into an amended litigation funding agreement. The tribunal accepted this, noting in its judgment that the words ‘only to the extent enforceable and permitted by applicable law’, inserted into the amended agreement have no legal effect until the contingency (legislation to reverse PACCAR) eventuates.
