CBI warns against class action proposals

The CBI has argued that proposals to enable group actions against companies will damage business in the UK.

Responding to the launch of a Department for Business, Innovation and Skills consultation on private actions in competition law., Matthew Fell, CBI Director for Competitive Markets, said:

“It’s absolutely right that the victims of competition law breaches receive proper compensation. We are pleased that the Government shares our view that redress should be delivered in a cost effective way, with litigation a last resort. This means promoting Alternative Dispute Resolution methods which are increasingly being used by business, and often result in a better outcome for both parties.

Fell: “extremely concerned by the Government’s preference towards ‘opt-out’ class actions”

“We are extremely concerned by the Government’s preference towards ‘opt-out’ class actions, which group potential claimants together without naming individuals. This will magnify the total amount of potential claims and fuel litigation.

“The introduction of ‘opt-out’ actions risks sowing the seeds of a class action beanstalk. In the US, they grew out of all proportion to the damage they were seeking to redress and had to be reined in by Congress.

“‘Opt-out’ actions will be inextricably linked with third-party investors and as a result are likely to create a new business in collective litigation, which is not the sort of industry we want to encourage in the UK.”

About Ralph Savage (104 Articles)
Insurance and legal journalist Ralph Savage has written extensively for the financial and professional services sectors, most notably as News Editor of Post Magazine. He ghost writes regularly on behalf of FTSE 250 CEOs, leading counsel and senior professionals including solicitors, insurers, accountants and brokers.

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