The latest European Class Action Report from law firm CMS includes some surprising revelations.
The United Kingdom continues to find itself at the epicentre of class action risk in Europe, with the total value of claims exceeding an eye-watering GBP 120 billion between 2018 and 2023. The CMS 2024 European Class Action Report reveals that, in the calendar year 2023, competition class actions in the UK included 540 million claimants – an uplift of 200 million from the previous year, while also highlighting a surge in class action claims in the European Union, with a record-breaking 133 claims filed in 2023. For the first time, opt-out class actions outnumbered opt-in actions across the continent.
On the European mainland, the value of collective claims in Portugal totalled almost EUR 46 billion – a third more than those in the Netherlands, which had a value of just over EUR 35 billion. CMS noted a six-fold increase in Portugal-based class actions compared with 2022.
In the UK, competition class actions dominate the collective-proceedings landscape, accounting for more than half of the total value claimed (EUR 78.68 billion) and, in December 2023, the Competition Appeal Tribunal (CAT) approved the first competition class action settlement of GBP 1.5 million in the McLaren car delivery case, setting a precedent for future settlements of this kind.
CMS partner Kenny Henderson appeared astonished at the UK figures, remarking: “It is extraordinary that competition class actions encompassing more than 540 million class members have been brought in the UK, with most of the growth in just the last three years. This translates to more than 8.1 actions for each person in the UK. The numbers are so other-worldly because these people are brought into these opt-out US class actions without being asked and usually without their knowledge. Equally astronomical are the sums involved. In the period 2018 – 2023, GBP 120 billion of damages were sought – a level of damages that continues to increase year on year.”
Seema Kennedy OBE, executive director of Fair Civil Justice and a former Conservative Member of Parliament warned: “This report should act as a wake-up call for policymakers and consumers across the country. The UK is sleepwalking into a US-style litigation environment, where lawyers and funders benefit at the expense of claimants and true access to justice. The evidence is clear: the rapid growth in class actions in the UK is not good for consumers, business or for our society.”
Alex Neill, co-founder of consumer rights group Consumer Voice, disagrees with Kennedy. Speaking exclusively to ICLG News, she said: “The explosion in claims demonstrates the appetite to level the playing field by holding companies accountable for their actions and helping people get back what they’re owed.”
“Rule-breaking businesses owe an eye-watering amount of money to consumers. We want to ensure people who have been ripped off are confident and ready to step forward to claim when cases are won.”
While England and Wales remained the most prominent European jurisdiction, accounting for 29% of all claims, Portugal (23%) and the Netherlands (18%) did not lag far behind. Germany (8%), Poland (6%) and Italy (4%) also saw increases, contrasting starkly with 2020 when 63% of claims were filed in England and Wales. The introduction of the EU Representative Action Directive (RAD) in 2023, designed to facilitate collective redress for mass consumer claims, has been a gamechanger, taking effect in Portugal, the Netherlands and most EU member states.
Dr. Zsolt Okányi, CMS’s global head of dispute resolution, commented: “While the UK continues to lead in terms of risk, the rapid rise in claims in Portugal and the Netherlands signals a broader trend. The increased availability of litigation funding and advancements in technology have facilitated the pursuit of mass claims and made it easier for claimants to organise and file actions. The implementation of RAD is also proving significant, providing a mechanism for collective redress and empowering consumers and public bodies across Europe to take action against more corporations.”
CMS also reported that opt-out claims represented 54% of all claims in Europe in 2023, while the total claimed value of opt-out claims in the UK, the Netherlands and Portugal has increased eight-fold between 2020 and 2023. In England and Wales, opt-out claims, while still strong, slowed in 2023, likely affected by the UK Supreme Court’s decision in PACCAR.
While product liability, consumer law and personal injury accounted for the majority (32%) of claims across Europe, Covid-19 related litigation, particularly business interruption and insurance claims in England, is on the rise. These claims are likely to become a permanent feature of the European group litigation landscape for many years to come.
Last year saw the largest number of claims yet against tech companies and other consumer-facing sectors, as well as claims against governments and governmental bodies. While the number of claims in the financial products and professional services sectors has fallen compared with 2022, it was still the second-highest ever recorded.
With a 400% increase in the number of non-governmental organisations (NGOs) operating at an international scale, businesses are facing NGO-initiated lawsuits increasingly frequently, primary centred on environmental claims. This, coupled with the provisions enshrined in the new EU Product Liability Directive, is emerging as a new risk that could materially increase litigation and class action claims. The widespread availability of third-party funding is also empowering claimants to issue proceedings.
“As our report shows, no sector is immune from activity,” concluded Henderson. “As these actions become more international, companies across all sectors must be prepared for heightened risk. This dynamic environment requires proactive legal strategies and robust risk management to navigate the increasing complexities that group litigation brings.”
