Consumer Rights Act 2015 introduces class action system in the UK

Following the Royal Assent to the UK Consumer Rights Act 2015 (the “Act”) on 26 March 2015, the UK's first class action regime will come into force on 1 October 2015. The Act will reform UK private competition law enforcement, in order to make it easier for parties, particularly SMEs and individuals, to bring private enforcement actions in the UK. The three main ways are:

  • widening the jurisdiction of the Competition Appeal Tribunal and setting out improvements for procedures;
  • promoting collective proceedings, in particular by introducing “opt-out” collective actions and “opt-out” collective settlements; and
  • providing the Competition and Markets Authority with the authority to approve voluntary redress schemes.

The Act will, inter alia, make it easier for groups of consumers to seek compensation from firms that have fixed prices and formed cartels. Safeguards to prevent frivolous claims include conditions to be met before a claim is approved as "opt-out", and rules governing damages and costs.