Consultation launched into Collective Actions regime

The Department for Business, Innovation, Science, and Trade (DBSIT) has launched a consultation on proposals to simplify and improve the efficiency of the opt-out collective actions, following their call for evidence last year. 

The regime exists to ensure people who’ve experienced harm can enforce their rights and claim redress. This is an important opportunity to champion access to justice for consumers across the country, and to ensure the system benefits as many consumers as possible while supporting a healthy economy. 

Opt-out collective actions are legal cases brought on behalf of a group affected by anti-competitive behaviour. Claimants are automatically included unless they choose to opt out. When not all eligible claimants come forward, the leftover funds are known as undistributed damages. 

We’re the prescribed charity that receives these funds when collective action cases result in undistributed damages. We act as a backstop, ensuring these funds can still be put to good use, funding the free legal help people need to know their rights and enforce them. 

These amounts go unclaimed in the first place because consumers don’t know about, don’t trust, or can’t access the compensation they’re owed. Funding free legal advice services, trusted by their communities, helps support consumers who are least likely to be able to access redress otherwise. 

We’re also working with our funded partner network to increase consumer awareness of the regime and promote their right to compensation under the opt-out regime. 

Access All Areas, a report we recently produced with Pragmatix Advisory, identifies the different ways the free legal advice our funded partners provide supports consumers to access and enforce their rights.

In June we distributed the £3.7 million we were awarded in unclaimed settlement funds from the Gutmann v SW Trains case as grants to 16 free legal advice organisations, supporting their communities across London, the Southeast of England, Scotland and Wales. 

These areas were strategically selected, based on where class members from the case are located, as well as areas that face the most persistent gaps in access to free legal advice. 

These gaps cost consumers and the right support can be the difference in whether people get what they’re owed. New research from Thorndon Partners confirms what we see every day: lower-income households are least likely to have the evidence needed to claim, and least likely to be able to engage in the collective actions process. Our funding is most likely to reach these communities. 

Making sure undistributed damages benefit consumers is central to ensuring opt-out collective actions genuinely strengthen access to justice.

DBSIT is currently consulting on a potential change to the prescribed charity. Should this go ahead, funding that currently supports frontline agencies helping vulnerable consumers could be lost.

We’ll be working collaboratively on our consultation response, pressing the case for an approach that protects consumers’ access to redress, and supports work that is already delivering results, just as it’s beginning to show what’s possible.

In the meantime, if you’re interested in supporting funding for access to justice, we’d love to hear from you, get in touch to find out how you can help.

Deadline for submissions is Friday 25th September.