New law reform project could trigger opt-out consumer class actions in the UK

The Law Commission of England and Wales has announced a significant new project examining whether England and Wales should introduce a new consumer class actions regime.

The project, announced on 20 April, follows the government requesting the Law Commission to assess whether the way consumer laws are enforced in England and Wales could be strengthened through the introduction of a consumer class actions regime.

The UK Competition Appeal Tribunal (CAT) regime allows true ‘opt-out’ claims – in other words where a representative claimant pursues a claim on behalf of a class of others who do not need to take any positive steps to join the claim – but this procedural regime is only currently available in cases involving competition law breaches.

For other types of claims, currently the representative action procedure in the Civil Procedure Rules (CPR) r.19.8 allows a single claimant to bring proceedings as representative of others who have the “same interest” in the claim, without those others being party to the proceedings. However, this “same interest” requirement has made it difficult for some claimants to bring a representative action in practice.

The Law Commission’s project, which is expected to commence in Autumn 2026, will identify the benefits and risks associated with introducing a more general consumer class actions regime. It will also make recommendations on how such a regime could be designed both to improve consumers’ access to redress and recovery of potential damages, while promoting “the efficient conduct of litigation at proportionate cost”.

Due to the automatic inclusion of large numbers of class members, opt-out claims can lead to significantly higher aggregate damages and costs for defendant businesses. Ahead of the project’s implementation, the Law Commission has published terms of reference and is inviting businesses to respond to an initial scoping questionnaire.

Commenting on the new project, Emily Cox, a class action litigation specialist at Pinsent Masons, said: 

“This is the clearest sign yet that the government is at least philosophically drawn to expand the opt-out regime beyond competition law. Given some of the significant cost-benefit questions posed by the CAT regime, this project is a real opportunity for businesses to make a considered case regarding structural and design issues, and how consumers and businesses might best be served, for example with alternative dispute resolution.”

Previous proposals to introduce a more general consumer class actions regime similar to the CAT regime have not progressed in England and Wales, although Scotland is currently considering introducing a general opt-out group proceedings regime.

Last year the Department for Business and Trade ran a call for evidence regarding the efficacy of the class actions regime already in place in the CAT – the outcome of which is still awaited. 

The Law Commission also says it will consider the funding of claims, taking into account any reforms to third-party litigation funding (TPLF) that might be introduced as a result of the Civil Justice Council’s (CJC’s) recent review of such funding.

TPLF is a critical factor in bringing most class actions but has received criticism that it is inadequately regulated and can drive up the costs of actions without appropriate concomitant benefit to consumers.

The CJC published a final report (150-page / 1MB PDF) following its review of litigation funding last summer. The government has indicated that it will adopt at least some of the CJC’s proposals, meaning that some additional regulation of the TPLF industry may be introduced in the foreseeable future.

Encouragingly for businesses, the terms of reference for this latest project suggest that the Law Commission is expected to take a balanced, holistic approach to introducing a new consumer class actions regime. In particular, the project will consider the relative effectiveness of distribution of damages as well as whether certain sectors are disproportionately targeted by litigants, and the relative vulnerability of opt-out collective proceedings being exploited and creating a ‘litigation culture’.

Angelique Bret, a competition and consumer law expert at Pinsent Masons, said the introduction of a collective actions regime for consumer law breaches has been anticipated since the enhanced civil enforcement regime for consumer law breaches was introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA).

The DMCCA, which came into effect in April 2025, empowered the Competition and Markets Authority (CMA), the UK’s consumer and competition law watchdog, to decide whether a company has breached consumer law, without having to go to court, along with the ability to impose fines and make directions for consumers to be compensated.

As Bret noted, the CMA recently used these powers for the first time in relation to ‘drip pricing” breaches of consumer law by two driving schools. The companies involved were fined over £4 million and ordered to compensate affected consumers over £760,000 in refunds.

Bret cautioned that a broad consumer class actions regime should be clearly defined in relation to obligations for business and its scope more generally. She said “Given that there is already a mechanism for consumers to be compensated following a CMA consumer protection investigation, any collective action regime for consumer law breaches would need to take this into account, as consumers should not be compensated twice over. This differs from the competition law enforcement regime, which does not include a mechanism for the CMA to order compensation following the finding of a competition law breach.”

Defining the scope will be particularly important given the gradual broadening of the types of claims being raised in opt-out collective proceedings before CAT in recent years. As illustrated in one recent data-related claim that will proceed to trial next year, claimants bringing standalone opt-out collective proceedings before the CAT are increasingly seeking to characterise data privacy, consumer protection, environmental pollution, or other behaviours as examples of abuse of dominance.

The Law Commission is inviting stakeholder input on the project until 30 October 2026 and plans to publish a formal consultation paper containing its views and any proposals for reform later this year.

Cox added: “This may be an invaluable opportunity for businesses with real-world experience of the impact of mass claims and the way they are run to help inform the direction of travel.”