The popularity of class actions continues to rise as the UK remains one of Europe’s most active jurisdictions with the total value of cases in the UK surpassing €155bn (£135bn) in 2024.
According to a new report by law firm CMS, the value of opt-out claims rose to €77bn (£67bn), up over €10 bn from the previous calendar year. While opt-in claims increased slightly from €76bn (£66bn) to €77bn (£67bn).
Opt-in class actions require individuals to actively join a lawsuit to be included, while opt-out class actions automatically include all affected parties unless they explicitly choose to leave.
In the UK, competition class actions are the most popular due to the Competition Appeal Tribunal (CAT). Over the past several years, the Tribunal has been inundated with new cases, primarily targeting Major Tech firms such as Google, Apple, and Meta.
In terms of scale, by the end of 2024, competition class actions in the UK involve more than 655 million members – equivalent to 10.4 class actions for every person in the country. For comparison, just over 46 million people were tied to a class action in 2016.
The total cumulative quantum at the CAT was £95bn over 2024.
However, despite the rise of these types of legal cases, recent judgments from the CAT may be significant for the future of these cases. These include the Le Patourel v BT Group, which was the first class action to proceed to trial, resulting in a win for the defendants.
Third-party funding pressures
In May, after nearly nine years of litigation, the Tribunal published its ruling on the Merricks v Mastercard class action settlement, approving a £200m collective settlement proposal.
This decision resulted in controversy with the third-party litigation funder, Innsworth Capital, which unsuccessfully opposed the settlement.
“The £200m settlement represents just over one per cent of the £17bn figure sought and, with such a low recovery, arguably this claim failed entirely,” stated Kenny Henderson, partner at CMS.
The third-party funding sector is facing some pressures at the moment, as, in addition to recent decisions that have not gone in its favour, last week the Department for Business and Trade opened a call for evidence on the opt-out collective actions regime.
The UK government said, “Since 2015, the opt-out caseload has grown significantly, with tens of billions of pounds in damages claimed and hundreds of millions of pounds spent on legal fees.”
“This is far higher than estimated in the original impact assessment, which estimated the total cost to businesses to be £30.8m per annum,” they added.