Legal changes bring UK/US class action regimes closer

Significance

With the new rules, the United Kingdom is making it easier for consumers to bring collective legal actions for alleged violations of competition law, although it has largely rejected adopting US procedures that incentivise lawyers to bring class actions. Further reforms under the 2014 EU Directive on Antitrust Damages Actions will apply throughout the EU from December 2016. In the United States, the class action regime has been tightened in recent years, and a recent decision by an influential federal appellate judge is increasing court scrutiny of class action settlements.

Impacts

• Safeguards will prevent the UK system from evolving along the lines of the more litigation-friendly US class action model.
• The UK system is unlikely to be broadened to make it easier for plaintiffs to bring collective actions in areas other than competition law.
• Legal decisions and statute changes that have discouraged US class actions are unlikely to be reversed.
• This applies especially in securities actions.