The Consumer Rights Act 2015 amends the Competition Act 1998, substituting a new section 47B which introduces an opt-out collective action regime for both: (i) follow-on competition law claims (i.e. claims based on the defendants’ liability as established by an infringement decision by a competition authority); and (ii) stand-alone competition law claims (i.e. claims where there is no infringement decision meaning that the claimants are required to prove that the defendants have breached competition law).
The CAT has issued new procedural rules which set out how it intends to consider and manage cases brought under the new regime.2 There remains significant uncertainty which we consider in detail below.
In summary, a claim brought under section 47B will go through the following phases:
Certification – before a claim can proceed, the claimant representative is required to apply to the CAT for a collective proceedings order. An order will only be granted if the CAT is satisfied that the representative body bringing the claim is “suitable”, that the class of claimants is adequately defined and that it is appropriate that the claim be brought on an opt-out collective basis (rather than an opt-in basis, which would require the representative to sign up all participating claimants).3
Settlement – the representative body cannot agree a settlement on behalf of the class members. A settlement is only binding when it has been approved by the CAT and even then class members have the opportunity to opt out and proceed with individual claims.
Damages – If the claim reaches trial and judgment is given in favour of the claimants, the CAT will assess damages on a compensatory basis. Exemplary or punitive damages are not available. The CAT will award damages on an aggregate basis and provide directions as to how the claim of each class member should be assessed. The CAT has the power to order that any unclaimed damages be passed to charity.