Two-thirds of people would join a class action against their own company
Class actions are the desirable route for people, as 64 per cent of people would join if they thought a company had broken the law, up four per cent on the previous year.
New data from Portland Communications shows that 63 per cent of people would also join a class action against their own employer if it broke the law in a way that affected them, up from 55 per cent reported last year.
Ajay Malhotra, partner at Herbert Smith Freehills said: “If there is funding in place, it makes it easier to opt-in. So, that has likely contributed to more of a culture to signing up to group actions rather than claimants pursuing individual claims or not bringing a claim at all.”
The report found that public knowledge of litigation funders is increasing. However, although the amount of people expressing a ‘low’ level of awareness of litigation funders dropped from 57 per cent in 2022 to 49 per cent in 2023, they are still considerably high numbers.
The option in the UK is for people to join an opt out class regime at the Competition Appeal Tribunal (CAT), which was established for competition matters in 2015. Alan Davis, partner at Pinsent Mason noted the CAT “is the only true “opt-out”mass actions regime in the UK.”
Otherwise, people have to have an opt in regime at either the CAT or in the main court, which would through a group litigation order (GLO).
According to the report, more respondents than ever have been involved in a class action as 23 per cent of those polled in 2023 claimed to have participated in a class action, up from 13 per cent in 2021.
Neil Purslow, chief investment officer at Therium explained: “There is momentum as the structure exists enable these group claims to be brought.”
The CAT has opened the floodgates, and according to Davis “more than 20 collective proceedings are currently at various stages before the CAT, and a significant number have now been certified by the CAT to proceed to trial on an opt-out basis.”
Purslow also highlighted the last decade there have been more collective GLO type proceedings for compensation for people that have settled, resolved and been successful.
He added: “That’s probably why you’re seeing people being more willing to join them. It’s becoming more common and people who are consumers are more and more familiar with the idea and because of that they are more likely to join a group litigation order”.
When it comes to reputation, 61 per cent of people believe it is likely that the risk of a class action lawsuit will diminish the price of a public company’s share.
“There can be reputational risk for a company being dragged down the class action route,” noted Malhotra.
Reputational risk can be a big factor for taking these actions. This explains why nearly 70 per cent of people believe that class actions are a good way of holding big tech companies accountable.
Several big tech companies have faced many class actions over recent years, including Google which was hit with a £920m damage claim that got green light by the CAT in July.
Back in January, data showed that the value of class-action lawsuits filed in the UK over claims around anti-competitive behaviour against big tech surged six-fold over the past year, from £4bn in 2021 to £26bn in 2022.