UK rail commuters are in the headlines at the moment complaining about overcrowding, poor service and seem to be having a bad time generally. This group of consumers cite majorly underperforming services on privatised contracts, which is often leaving some commuters bereft of ideas on simply getting to work.
There are also (unverified) reports that certain consumer groups are looking to launch legal action against various mobile phone companies who they say colluded like a cartel in the downfall of a leading phone retailer. The ensuing insolvency disaster after its collapse caught the national conscience not least for its employees and creditors.
Class-action law suits have long since been in vogue in the United States where for many years aggrieved groups, be it consumers or business customers etc. club together and commence litigation against a single or industry group of defendants which aggregates their financial firepower and can show a significant saving on legal costs which enables the claim to be brought in the first place.
Despite greater focus on consumers legal rights and greater examples of consumer activism within the UK in the last few years, there simply has not been the mechanism or the appetite for class-action style claims. However, as of October 2015 that could now change.
Enter the Consumer Rights Act 2015
One of the more interesting, though lesser explored, sections of the Consumer Rights Act 2015 (“CRA”) which came into force on 1 October 2015 are the new collective proceedings in competition damages claims.
Sections within the CRA now allow for both opt in and opt out collective actions.
– Opt in procedures (which were technically available before the CRA) are where the members of a class who wish to partake in an action need to actively opt in and join such proceedings.
– Opt out proceedings are the opposite, where members of a class for proceedings will automatically be “opted-in” and will need to opt out of proceedings if they wish not to take part. This is still subject to the UK competition courts granting a collective proceedings order, but shows very well where the intention of the legislation is. This is a new type of action that UK solicitors may be keen to explore where consumer activist groups are concerned, with the opportunity for a great many collective proceedings to be initiated on current market issues.
Additional to these new types of claim are collective settlement and collective voluntary redress schemes within the CRA, which will afford a company or group of companies finding themselves as defendants, to settle such claims with the claimant class affected without the need to proceed with costly litigation.
Are Class Actions a Reality?
In terms of class actions of any sort becoming enshrined in UK legislation, this country has now crossed the Rubicon. This is very much a first for the UK and shows where the thinking for consumer legislation has progressed to within this legal sector.
it is important to bear in mind that despite its captivating title and promising sound, the CRA class action rights (beyond the more usual claims) are currently limited to competition law claims. These rights will enable classes to bring either “opt in” or “opt out” class actions for anti-competitive behaviour against particular companies or industry groups.
However, this by no means dampens the impact these rights and claims can have within the UK. Whilst competition law is largely based on EU legislation and there is some uncertainty following Brexit, the UK will likely retain competition legislation in one form or another either as part of the single market or as a mirror to the existing legislation it currently has in place under the EU directives.
Companies dealing with classes of consumer will need to become wise to the reality of these new rights and the way this can shape or even directly affect their business practices now consumers potentially have renewed and enlarged legal firepower.
Consumer groups can band together to tackle nascent consumer issues such as retail banking charges, unilateral phone contract tariff changes and perceived instances of cartel behaviour or price fixing.
Whilst rail misery is not directly actionable by commuter groups under this legislation, if government tender processes awarding rail and other public transport contracts or the private companies themselves are found to be falling foul of competition law in some way, the road will now be open for those aggrieved to group together and take a stand.
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