Dust settles on new UK antitrust litigation regime

With the Consumer Rights Act 2015 competition law provisions coming into effect on 1 October it is time to reflect on what the reforms, including the new opt-out collective actions regime and enhanced role for the Competition Appeal Tribunal (CAT), will mean in practice.

As observers of the reforms will be aware, the CAT will now provide a forum for bringing both standalone as well as follow-on claims.  Claimants will also be able to bring a collective action where their claims raise similar or identical issues of fact or law.

A key test of the new regime will be the readiness of the CAT to certify persons to act as class representatives, where it is satisfied that it is ‘just and reasonable’ for them to do so.  The CAT must also certify that the classes are properly defined, and that the various interests of claimants are linked.  If the case passes the certification threshold, the action must be advertised so as to allow potential members to opt out.  Non-UK claimants will have to expressly opt-in.

The CAT has also updated its procedural rules originally adopted in 2003 and revised its Guide to Proceedings.

The reforms have been heralded as an antidote to the challenges presented by the old opt-in regime, but there are likely to be some early issues to work through before the new rules bed down.  The framework is in place but it is untested.  It is probable that there will be litigation around satellite issues such as class certification given the discretion accorded to the CAT to decide the suitability of class representatives.  It is also conceivable that defendants will seek to challenge whether a class should have been certified.  Conversely, claimants may appeal against the rejection of a claim as suitable for collective proceedings.

Another change is the ability of the CAT to hear both standalone as well as follow-on claims.  Standalone or hybrid claims were formerly the preserve of the High Court in England and Wales.  Although the High Court would usually stay the proceedings pending the determination of any administrative case before a competition authority, this did allow for limited disclosure which was attractive to claimants.

Another innovation is the settlement regime which will allow the CAT to approve settlements that bind the entire class where this is ‘just and reasonable’. 

Defendants may also enter into voluntary redress schemes to compensate consumers in return for a reduction of up to 20 per cent on the administrative fines.  The Competition and Markets Authority will be able to certify such voluntary redress schemes, which will be supervised by independent third party boards.  The rules on settlement and compensation provide an incentive for defendants to mitigate some of the effects of the more aggressive enforcement machinery and allow them to draw a line under the litigation.  However, it remains to be seen how much of an incentive the new voluntary redress mechanism will prove to be in practice.