Value of UK class actions up by a third to £106bn

Henderson: Relentless march of class action risk across Europe

The value of class actions in the UK rose by more than a third to over £106bn last year, while the number of people involved in them almost doubled to over 340m.

However, the number of claims filed in the UK last year hardly changed at 121, according to international law firm CMS.

Its European Class Action Report 2023 described the EU as bracing itself for a “tidal wave of consumer-driven legal movements” as a result of implementation of the Representative Actions Directive (RAD) by member states.

England and Wales no longer accounted for a majority of all European class actions last year, as it did in 2021 with 54%, but remained well ahead of other jurisdictions with almost half (48%). It was followed by Holland (12%), Germany (9%) and Portugal (7%).

Assessing the quantum of class action claims in the UK for the first time, researchers found the total value increased by more than a third from €90bn (£77bn) in 2021 to €123bn (£106bn) in 2022.

Researchers said the largest single UK claim concerned the collapse of the Mariana dam in Brazil, where the claimants are seeking around €41bn.

“That claim is being brought using an opt-in mechanism. Whilst many of the largest claims are brought using opt-out mechanisms, the Mariana dam claim illustrates that opt-in mechanisms can also develop into extremely high-value matters.”

CMS said that “largely owing” to the Mariana dam claims, “half of the value of the UK’s class actions can be found in the mining, energy and transport sector”.

If the Mariana dam case was removed, financial products would account for the largest share of claims (39%), followed by mining and energy (23%) and technology (21%).

Across Europe, financial products also made up the biggest proportion of class action claims with almost a third (31%), followed by competition with 26% and product liability/consumer law/personal injury with 24%.

Researchers said the European countries with the “steepest growth in the number of class actions” were Germany, Slovenia and Portugal.

They described litigation funding as a “fast-growing industry”, expected to “further expand in Europe in the next five to 10 years”.

Kenny Henderson, partner at CMS, commented: “Our comprehensive data demonstrates the relentless march of class action risk across Europe. 2023 emerges as a pivotal juncture, particularly as European Union member states were bound by the obligation to integrate the minimum provisions of the RAD into their national legislation by 25 June.

“Although not all member states have met this deadline, and varying degrees of consistency mark those that have, the overarching message remains unambiguous: no sector remains unaffected to the far-reaching impact of mass litigation.

“The same goes for the UK, which remains the highest-risk jurisdiction in Europe for class actions.”

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