UK Government opts in to Class Actions

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As widely expected, earlier this week the Government announced proposals for reform of the private competition damages regime in the UK, proposing to increase the Competition Appeal Tribunal’s (CAT) power and introduce an opt-out “collective action” scheme before the CAT. The proposed changes are unlikely to come into force until 2015, at the earliest. Do the proposals herald a US-style class action culture in the UK, as some commentators predict, or will the safeguards proposed by the Government lead to more moderate results?

Government proposals in brief -

The Government’s proposals are contained in its response to the consultation on options for reform of private competition actions in the UK. The proposals seek to establish the CAT as the major venue for competition actions in the UK. Most notably, they would give the CAT the power to hear “opt-out collective actions”, that is, any claim for damages for breach of applicable competition laws brought on behalf of a class of claimants on an opt-out basis. Although the Government’s response is silent on the point, it is to be presumed that claims for damages breach of the UK Competition Act and/or for breach of Article 101 or 102 TFEU could be brought before the CAT on a collective basis.

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