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A new wave of Class Actions

23 January 2023

An increasingly challenging economic climate, better access to funding and an increase in opt-out mechanisms across Europe are changing the litigation landscape and leading to an increase in Class Actions.

Class Actions, historically, have been a slow burner within the UK and EU. However, that is rapidly changing and businesses are seeing a rise in Class Actions being pursued for several reasons.

In a recent Class Action survey conducted by Portland Communications' Litigation & Disputes practice, which polled a sample of US and UK citizens, it determined that over 60 percent of people would be willing to participate in a group litigation against a business whose activities have directly affected them.

More specifically, 67% of UK respondents would be willing to litigate against a business for damaging the environment, and 55% were willing to sue their employer.

Within financial services, a number of major UK banks are also increasingly being targeted with class action litigation, which are often subsidised by class action funders. The growth and subsequent increase in this type of litigation funding poses a real threat to many UK businesses and banks.

In addition to the survey findings, a new Representative Actions Directive (EU Directive 2020/1828) entered into force in December 2020 and EU member states were given 24 months to transfer the Directive into domestic law. The Directive is designed to protect the collective interests of consumers by establishing effective procedures for EU Member States to ensure that qualified entities can bring collective actions on behalf of consumers.

This, coupled with the fact that over 60% of people would be willing to participate in a group litigation highlights the need for businesses across all sectors to develop a mitigation action plan to test and prepare their Class Action preparedness.

Businesses' should consider:

  • Having in place a crisis/incident response plan;
  • Risk assessing the company's readiness to respond to group litigation;
  • Ensuring that there is a cyber-incident response strategy, and;
  • Tracking complaints received from customers, and monitoring any arising trends.

Dan Williams, Partner in DWF's Dispute Resolution group said, "Businesses across Europe need to be alive to the change in mood and direction of class actions and consider the impact that not only better prepared claimant law firms with access to funding will have, but also the implementation of the new EU Directive on Representative Actions, both of which will make class action claims more accessible than ever before."

"There are a number of things businesses should do to prepare for a general increase in group actions, and companies of all sizes should ensure they are ready and suitably prepared.  Consideration should be given to their risk to exposure of group actions as well as their wider industry."

If you or your business wants advice on preparing or responding to a group action, get in touch with one of our Class Action experts in your jurisdiction today.  

DWF has advised on some of the biggest class action cases, in multiple jurisdictions and across multiple sectors. To find out more about our Class Actions experience visit our Class Actions webpage.

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