Regulatory outlook for collective actions in 2026 and beyond

The body of case law related to the opt-out collective proceedings regime for competition law claims in the UK is growing steadily. Certain points of principle, however, are under the microscope for potential legislative intervention, with considerable scope for regulation in the immediate future that could significantly impact the regime and businesses.

Third-party litigation funding

In June, the Civil Justice Council (CJC) published its final report on litigation funding following a comprehensive review of the third-party litigation funding landscape in England and Wales. Reflecting on principles established earlier in the year by the European Law Institute (ELI), the CJC recommended introducing a tiered system of light-touch regulation of third-party litigation funding arrangements (LFAs) in civil cases brought in England and Wales.

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This would include a general mass actions pre-action protocol and additional requirements for the funding of consumer or mass claims, in the manner of a ‘consumer duty’, with enhanced disclosure to the court which might consider and approve funding arrangements on a without-notice-to-other-parties basis. If implemented, these measures would have implications for the funding of mass actions more widely, but particularly for competition law opt-out collective proceedings under the Competition Act 1998 which are brought before the Competition Appeal Tribunal (CAT).

The UK government has not issued a formal response to the report, but it is understood that the Ministry of Justice is already considering light-touch regulation. Which elements it seeks to introduce remains to be seen, but even light-touch regulation of funders could have an impact on the number of claims being issued as funders reflect and adapt. More may become clear next week when a commons debate is due to take place on the subject.

PACCAR

The CJC report also recommended that the effects of the PACCAR ruling by the UK Supreme Court in 2023 should be reversed by legislation, adding that this should be both retrospective and prospective in effect. The Conservative government put forward a bill in parliament to reverse the PACCAR ruling in March 2024 shortly before the UK general election. After coming to power in July 2024, the Labour government stated it was awaiting the outcome of the wide-ranging CJC report before taking any further steps in relation to PACCAR.

There has been no formal word from the government since then in relation to the PACCAR element of the CJC report. It may be that the government considers there is less urgency to take action given no case appears to have been discontinued as a result of PACCAR. However, earlier this month it was reported that claimant law firms and funders wrote to the new justice secretary, David Lammy, warning that only three claims had been brought at the CAT this year – compared to 11 in 2024 and 17 in 2022 – and there is a risk of litigation funding drying up altogether. According to data published by litigation analytics platform Solomonic last week, the number of claims in 2025 has since increased to four, but the numbers are still low compared to previous years.

Earlier this year, following conjoined appeals brought by Visa, MasterCard and Apple, the Court of Appeal endorsed the lawfulness of the wording within the respective LFAs, which was revised to express the funders’ returns as a multiple of their investments rather than as percentage of damages following the PACCAR judgment. There may be a renewed impetus for a bill to reverse PACCAR if Visa’s or Apple’s separate appeals on this point to the Supreme Court – lodged in September 2025 – prove successful.

Call for evidence

Aside from litigation funding, on 6 August the Department for Business and Trade launched a call for evidence regarding the efficacy of the opt-out collective actions regime in competition law, ten years after it came into force.

The call for evidence noted that, in the government’s view, now is the right time to take stock, given the regime has expanded substantially since its inception, with consumers having sought tens of billions of pounds in damages and hundreds of millions of pounds being spent on legal fees. It posed questions about the scope of the regime, distribution, and invited views on whether other routes to redress may be more effective, such as alternative dispute resolution (ADR) and voluntary redress schemes.

The consultation also acknowledged the potential burden on business that increased exposure to litigation can present and clarified that the government is “committed to reforming the consumer enforcement landscape in a way which delivers justice for consumers without incentivising speculative competition claims”. 

While the call for evidence only closed on 14 October – and the government’s response is now awaited – its tone has already prompted vocal expressions of concern by claimant lawyers, who are of the view that it is too soon to review the regime’s effectiveness given how slow it was to get off the ground. The collective proceedings regime was largely dormant during the first five years of its existence until the Supreme Court’s landmark Merricks judgment was handed down in 2020. There are concerns that the government, far from expanding the regime to cover other sectors or all sectors as a generic regime, may curtail the existing regime.

Future outlook

It seems unlikely that the government will scrap the opt-out collective proceedings regime altogether, given the direction of travel in other jurisdictions, including the implementation of the Representative Actions Directive across the EU. But it may well consider introducing further guardrails and nudges to ensure that only the most appropriate cases flow through the CAT, with others benefitting from more efficient ADR or redress schemes. This will depend on the responses received to the call for evidence, which are to be followed by proposals for change to the opt-out collective actions regime, which themselves will be subject to consultation in due course.

This is an approach that is likely to be supported by the CAT, as indicated by Peter Freeman CBE KC, CAT’s senior policy adviser and former chairman, during a recent conference. Freeman said he believes the regime is still bedding in and, though it is too early to make any fundamental decisions, changes to help the efficiency of the regime would be welcome.

The Competition and Markets Authority’s (CMA) response to the call for evidence does not specifically endorse this view, but it does advocate for it to have the discretionary power to issue directions for redress as “an effective tool in certain cases which could more quickly and efficiently deliver redress than collective follow-on action”. In the CMA’s opinion this could reduce the incentives for protracted and costly opt-out collective proceedings, and lead to faster outcomes, particularly if “action for redress would be precluded in respect of an infringement already covered by a CMA competition redress measure”.

The CMA has also suggested extending “full immunity from liability for damages” to successful ‘Type A’ immunity applicants in cartel cases, sparing antitrust fines and damages exposure altogether for certain business yet at the same time helping to identify otherwise undetected competition law breaches and thus creating new opportunities for consumer redress.

These various initiatives are shining a light on how the government may legislate in the short-term to ensure that the CAT opt-out regime is genuinely working for consumers, with a responsible litigation funding industry that is providing access to justice but not benefitting funders and claimant lawyers to the detriment of business and consumers. 2026 looks likely to be a busy year in terms of crystallising how we may reach such a point.

Written with the assistance of Emilie Jones, Tadeusz Gielas and Gemma Erskine of Pinsent Masons.