In December, the UK’s highest court made a decision that could open the floodgates to a slew of American-style class action lawsuits in Britain. Harold Kim, president of the US Chamber Institute for Legal Reform, recently wrote an op-ed for the Daily Telegraph discussing the impact this ruling could have on the UK’s legal system.
“Any collective action system needs guardrails. In a well-balanced system, a class representative should have to show that everyone for whom he claims to speak actually suffered the injury for which he is demanding money. Courts should have to determine that there is a feasible way to identify class members,” Harold wrote.
“The Competition Appeal Tribunal was supposed to serve as one such guardrail, catching excessively broad claims early. It did its job when it first rejected the Mastercard suit. Unfortunately, with regard to the aspects of the certification test considered, this Supreme Court decision has reduced the Tribunal’s ability to act as an effective gatekeeper against this type of litigation in the UK.”
The UK’s 2015 Consumer Rights Act opened the doors to US-variety class action suits, and the Mastercard case is the first major test of the new system. In the US, class action suits are often seen as being driven as much by law firms and financiers as by consumers, they tie up the judicial system, and have limited success in curbing corporate misbehaviour because cases are usually settled without assessing the underlying merits once a class is certified.
“There is still some discretion left to the Tribunal when it reconsiders certification in this case. Let’s hope the Tribunal can still find a way to prevent the dam from bursting and flooding the UK with US-style actions.”