‘Stuff consumers, growth & profit come first’ : Vested interests of the CBI oppose competition class action litigation coming to the UK

THE Confederation of British Industry (CBI) has unsurprisingly, opposed the introduction of class action litigation to the UK. Class Actions have long been difficult, in the UK, and in Scotland where the topic, raised as a matter of reform in Lord Gill’s Civil Courts Review, has become all but forgotten due to undisclosed lobbying of the SNP controlled Scottish Government by business interests (& donors – Ed) who want the idea stopped in its tracks.

The CBI issued a Press Release stating : Government’s competition law proposals risk introducing litigation culture to the UK - CBI

Government proposals to move towards “opt-out” class actions for consumers could spark a new litigation industry around competition law and deter inward investment and growth, the CBI said today.

Responding to a Department for Business consultation on private actions in competition law, the CBI warned that by grouping potential claimants together without naming individuals, opt-out class actions will magnify the total amount of potential claims and fuel a culture of litigation.

The CBI says that it is absolutely right that businesses that have caused significant loss to consumers should be required to provide compensation. However, this should be done through Alternative Dispute Resolution, which offers a quicker, cheaper form of redress and better outcomes for consumers, rather than the “big stick” approach of opt-out class actions.

Matthew Fell, CBI Director for Competitive Markets, said: “At a time when the unrelenting focus must be growth, the Government should set out a strong message that the UK is open for business, not open for litigation.The Government is in danger of importing a number of features of the US class-action system into the UK, including opt-out arrangements, awarding of aggregate damages and a distribution of surplus funds.

“Victims of competition law breaches must receive proper compensation, but this should be delivered in a cost effective way, with litigation a last resort. The best way to achieve this is through Alternative Dispute Resolution methods, which are increasingly being used by business, and often result in a better outcome for both parties.”

Download "CBI private actions response July 2012" (386kb)