New Collective Redress actions good for consumers says Law Society

3 April 2008

Consumers, small and medium businesses, shareholders, and company employees could benefit from new UK and EU class action procedures, says the Law Society. 

Today’s publication of the European Commission White Paper on damages actions marks an important milestone in discussions on the issue. 

With the UK Government also considering plans to make access to justice for large groups easier, the Law Society is calling for a rational debate on the issue. 

Andrew Holroyd, Law Society President, says:

“This is about consumers and businesses getting access to justice.  It is about those claimants who are not able to seek the compensation they are due under the current system. Collective actions must be seen as only one of the building blocks of an effective justice system." 

“It is not about introducing the excesses of the US litigation system. We need to stop obsessing about what happens in the US. Nobody wants that here or elsewhere in Europe. There are plenty of other, moderate models of class action system to study that are geared more towards ensuring proportionality.  So let’s keep talking about a system that meets identified needs in the UK and the EU.”

The Law Society points out that while consumers could benefit from collective redress in cases of price-fixing, product defects and so on, there could also be a demand for class action procedures amongst investors and employees of banks and other financial service companies as the fall out from the credit crunch takes hold. The recent plethora of cases in relation to bank charges would suggest that there is a need to deal with these cases more effectively.

Furthermore, there is currently no provision within the Competition Act for businesses to seek redress where they themselves have been the victims of, for example, unlawful price fixing.

http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html