Launch of first opt out UK collective action

The UK could see its first ever opt-out class action if a claim launched by a pensioners’ association seeking compensation from a mobility scooter manufacturer that breached competition law is granted a collective proceedings order by the Competition Appeal Tribunal (CAT).

The National Pensioners Convention has confirmed its action against Pride Mobility Products and seeks damages on behalf of all the affected class.  It claims that 34,000 Pride customers may be entitled to at least a £200 refund on scooters bought between 2010 and 2012.  The claim is currently proceeding on an opt-out basis which has been made possible by the Consumer Rights Act 2015 which reformed the UK regime for private actions for infringements of competition law.  A claimant must opt out of the class to bring an individual claim.

The claim follows a decision by the OFT in 2014 that Pride infringed the Chapter I prohibition of the Competition Act 1998 by prohibiting online retailers from advertising scooters below a recommended retail price.

The claim has met a mixed reception from the competition law bar.  Some hope that it will prove that the new opt-out regime has teeth and can provide effective redress for consumers harmed by competition law breaches.  Others are more circumspect citing the additional complexities of a vertical infringement case.

The claim appears to be funded through a combination of conditional fee arrangements and after-the-event insurance.  Where the CAT makes an award of damages in an opt-out class action, any unclaimed damages must be paid to a charity or the CAT can order that the representative is paid an amount to cover its costs and expenses in connection with the proceedings (CAT Rule 97).  This provision was introduced to prevent representatives being driven by the financial incentives of unclaimed damages.  It is ultimately for the CAT “to give directions as to how each class member or represented person’s entitlement is to be calculated” by either “specifying a formula” or appointing an “independent third party to determine the claims or any disputes regarding quantification” (CAT Guide, section 6.82 and CAT Rule 92(1)).