Claims by business groups that measures in the Consumer Rights Bill would lead to a surge in litigation (“Change to class action rules ‘would hit consumers’, The Times, 3rd November) are unfounded and based on a fundamental misunderstanding of the Bill. Rather than ‘hit consumers’, these changes will, in fact, benefit both consumers and the vast majority of businesses that comply with competition law.
We have a totally different legal system to the US and the Bill includes a number of safeguards designed to prevent “profit-driven, American-style class-action”. For example, companies that break the law would only have to pay back what they gained, unlike in the US where damages can be three times the compensation owed to consumers.
The Competition Appeal Tribunal will also have the final say as to whether a case can progress and claims will only be able to be brought by individuals who have been directly affected or by genuinely representative associations – not by law firms or companies with a vested interest. This means that only the strongest cases will proceed and there is no financial incentive to bring speculative cases.
Many countries have implemented similar safeguards to achieve a successful opt-out system without the excesses of the US regime, including Canada, Australia, Spain, Portugal, Poland and Norway.
Good businesses have nothing to fear from these proposals which are good for consumers, good for responsible businesses and good for the wider economy.
Which? executive director