Prospect of paying fees “overcomes litigation funding scepticism”

Pugh: Consumers are becoming more activist

Nearly two-thirds of consumers would prefer litigation funders to take a share of their compensation from class actions than pay legal fees, research has found.

The report, based on responses from 2,000 UK consumers, also found that seven out of 10 believed that class actions were “a good way of holding big tech companies to account”.

Researchers said the “general public’s knowledge of litigation funders is on the increase”, with those expressing a ‘low’ level of awareness of litigation down by eight percentage points to 49% in the fourth annual Class Action Report by Portland Communications.

References by UK national news outlets to litigation funding increased by 65% from 2022.

Portland said consumers continued to be sceptical about both litigation funders and law firms, most of them believing, for the third year running, that these categories were “the most likely beneficiaries from class actions”.

However, an increased majority said this year that they believed class actions “cannot be brought without someone footing the bill”.

For the first time, researchers asked consumers about their attitude to tech giants, many of whom are now facing major class actions.

Seven out of consumers (69%) believed class actions were “a good way to hold tech companies to account” with 76% saying that regulating them was “important for a fair digital market”.

Consumers showed increased appetite for certain kinds of class actions in the UK. Larger majorities than last year reported that they would consider joining a class action after being affected by unfair pricing (57%), if they were overcharged when buying a product or service (64%), or if their own employer broke the law in a way that directly affected them (63%).

Seven out of 10 consumers in the UK said someone should be held accountable when a company failed to properly manage climate risks, with 62% believing this should be individual company directors.

A similar proportion were willing to join a class action if they were impacted by environmental damage from business operations.

Generally, 64% of consumers said they would sign up to a class action given the chance, although 37% said they would be less likely to do so where the company involved issued a public apology.

Where they were directly contacted after an incident and informed of what was being done to solve the issue, that proportion rose to half.

Simon Pugh, a partner in Portland’s litigation and disputes practice, said: “This year’s report shows that consumers are becoming more activist. The UK public’s increase in willingness to take adverse actions against companies believed have broken the law should lead businesses to consider how they communicate both externally and internally in order to manage this increased risk.”

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