Collective Actions and Access to Justice
As a series of opt-out collective actions’ cases being heard in the Competition Appeal Tribunal reach conclusion we are calling on all parties to seize the opportunity to ensure that the wider public benefits from undistributed settlement funds – as well as – potential damages following trial.
The Access to Justice Foundation funds the provision of free legal advice in marginalised communities. We work with charities all over the UK who serve the people in need of social welfare advice – enabling them to live safe and productive lives.
Under the Consumer Rights Act 2015, undistributed damages in opt-out collective actions in the CAT are already entrusted to be received by us at The Access to Justice Foundation.
“The AtJF (is) recommended as a suitable body to receive residue funds from collective actions by the Jackson Review of Civil Litigation Costs and the Civil Justice Council. Furthermore, the strong grass roots support received in the consultation from over forty local organisations bears strong testimony that the AtJF has an impact and is valued by those whom it exists to serve. The AtJF is used to dealing with uneven inflows of funds and, as a grant-giving organisation, does not directly fund litigation”
As the first series of cases reach conclusion it appears likely that some may be resolved by way of settlement.
While the legislation doesn’t currently mandate that settlement agreements are to include a contribution to the AtJF, we believe to do so would align with the spirit of collective actions legislation which is to provide equitable means for individuals to pursue legal claims that they might not otherwise be able to pursue independently.
Proposed Contribution
We are making the case for negotiating a clause into settlement agreements, stipulating that 10% of any undistributed settlement funds are allocated to us before the remainder returns to the defendant.
While we recognise that residual damages reverting to the defendant help to incentivise settling, we propose that 10% is the appropriate percentage to significantly aid those in need of free legal advice without discouraging settlements.
Historical data has shown that there are low take-up rates from individuals who could make a claim in similar jurisdictions. This suggests the residual funds could be substantial even after payments to litigation funders and lawyers.
We firmly believe that leaving 90% of undistributed funds to revert to the defendant would not be a disincentive to settle.
Recognising the Access to Justice Foundation as the charity and grant-maker best placed to receive and distribute such funds is beneficial to all.
Especially the communities AND consumers who are most impacted by these cases and may be unaware that they had an interest.
As a flexible and responsive funder we can direct funding to improve access to justice to these communities by designing grant programmes to focus on key areas such as debt and money management advice.
This is an opportunity to bring meaningful change and increase access to justice – let’s seize it.
