UK Consults On “swifter And Simpler” Competition Redress, Regulatory Appeals And Competition Enforcement

The UK government is consulting on a package of reforms to make the opt-out collective proceedings (CPO) regime, regulatory appeals and competition enforcement swifter and simpler. This follows a call for evidence last year on the CPO regime. The key proposals include:

Opt-out collective proceedings

• Scope of claims: the consultation does not propose changes to the scope of claims that can be brought (for example restricting it to claims following on from the decision of a regulator); however, the government has separately asked the Law Commission to consider the pros and cons of introducing a consumer law class actions regime (see our blog post here).
• Threshold for certification is too low: the consultation notes that the original intent of the certification process was to provide a meaningful safeguard against novel or unmeritorious claims. The government considers that the threshold for certification is too low and it proposes to: amend the law so that the “absolute suitability of a claim” (which would lock-in a consideration of the merits of the claim) is considered as part of the threshold for certification (rather than the “relative” suitability of bringing a collective action vs individual proceedings, which is the current test following the Supreme Court’s judgment in Merricks v Mastercard); give greater weight to cost/benefit considerations – the foreseeable returns for class members compared to the costs of bringing the claim, to ensure that the claim is being brought in the best interests of the class, and will not mainly benefit the lawyers and funders; and require the CAT to consider whether there is sufficient evidence that damages can be assessed on an aggregate basis at this early stage.
• Funding of claims: the consultation includes a proposal to allow damages-based agreements in opt-out claims (which are currently prohibited by law), on the basis that it could drive competition for litigation funding. There are further proposals to increase certainty for funders by requiring the CAT to give an indication of reasonableness in relation to the funder’s return at the certification stage, based on an assumption that the damages award or settlement sum at the end of proceedings will be similar to the estimated value of the claim set out in the claim form. The government also proposes to introduce a presumption that funders will receive their return at the point that damages are awarded or settlement agreed (rather than waiting for the outcome of distribution of the damages).It is not specified how this would work in practice and whether the return would come out of the damages total prior to distribution, or whether it would be paid separately by the defendant.
• Costs: in addition to the work the CAT is already doing on costs and case management with a view to controlling the costs of CPOs, the consultation proposes changes to the CAT Rules requiring budgets from both parties following certification (currently only the proposed class representative needs to produce a budget as part of the certification process) with any notable changes being brought to the CAT’s attention and also setting out clearly that cost sanctions – such as becoming responsible for a portion of the opposing party’s costs, or losing the ability to recover costs - will apply to behaviour that unreasonably drives up costs, including tactics to drain budgets. Whilst such cost sanctions can already be applied, the usual approach is that costs of case management conferences are ‘costs in the case’, and this proposal suggests that costs orders during the proceedings may become more common.
• Settlement: the consultation includes proposals to empower the CAT to encourage or require mediation following the exchange of expert reports with the ability to take into account any unreasonable refusal to engage in mediation when assessing costs. It is also proposed that a mechanism for settlement offers with automatic cost shifting (akin to CPR Part 36 / CAT Rule 45 offers) consequences be introduced into collective proceedings. The consultation is also seeking views on how the settlement approval process could be made more efficient, noting that it can currently be a complex and lengthy process. The consultation also seeks views on how the voluntary redress scheme whereby parties offer binding undertakings to provide redress alongside an infringement decision or as part of commitments could be enhanced.
• Greater protection for Type A leniency candidates: the consultation seeks views on the possibility of full immunity from civil litigation for Type A leniency candidates to enhance public enforcement of cartels, with the CAT retaining the power to set aside such protection if damages are not recoverable from the remaining cartelists (e.g. due to insolvency).
• Distribution: the consultation seeks views on how distribution of damages could be improved (noting there has only been one settlement distributed so far, which resulted in very low sums being distributed to class members) and who should receive any undistributed damages – whether they should continue to be paid to the Access to Justice Foundation or whether this should be changed to the UK Consumers’ Association (also known as Which?), either alongside the Access to Justice Foundation or instead of them. The consultation notes that the UK Consumers’ Association (Which?) has experience as a class representative in the CAT but does not propose how any conflicts of interests could be overcome if the UK Consumers’ Association were acting as the class representative and would stand to be the recipient of the undistributed funds.

Regulatory appeals

• Currently, regulatory appeals are heard by either the CMA or the CAT depending on the sector and the type of decision made by the regulator. For example, the CMA is responsible for hearing regulatory appeals and references (such as licence condition modifications, price controls and industry code modifications) in the water and energy sector. The consultation seeks views on harmonising the regulatory appeals system, in particular whether to transfer regulatory appeals from the CMA to a specialist judicial body such as the CAT and harmonise the standard of appeals.
• The consultation states that the CMA may not be the most appropriate body to hear these regulatory appeals because (1) it is primarily an enforcement body and reviewing regulators’ decision is a quasi-judicial role; (2) it has limited resources which could instead be used to carry out its other duties; and (3) within the CMA regulatory appeals are decided by inquiry groups drawn from the CMA Panel but if proposals go ahead to change the decision-making model for mergers and markets from the current inquiry group to a CMA Board sub-committee, there would be “unnecessary complexity by retaining multiple decision-making models across the CMA functions”. The government’s view is that the CAT would be a more appropriate body to hear Regulatory Appeals on the basis that all appeals would be made to a single body and this would support more consistent appeal outcomes and improve certainty for stakeholders.
• Currently, potential grounds of appeal are set out in the relevant sector legislation and these grounds can vary across sectors. The government proposes to harmonise the appeal standard across all regulatory appeals so that the CAT would review the regulator’s decision on judicial review grounds, while also taking due account of the merits of the case – judicial review does not normally include this second limb so it is not entirely clear how this would play out in practice. Whilst the consultation considers that these “appeal parameters would maintain robust oversight over regulators’ decisions”, it does not assess the impact of lowering the level of current oversight. The consultation does not address the risk of an erosion of oversight of regulators’ undermining the confidence of investors and ultimately consumers that use these essential services.

Competition enforcement

• The consultation proposes to give the CMA more flexibility in its decision-making model and requirements to seek representations on confidentiality. It also proposes amendments to the CMA’s procedural rules to include a requirement that, as a condition of settling a Competition Act case, businesses must agree not to challenge or appeal the infringement decision.
• The consultation proposes relaxing the requirements on the CMA before sharing confidential information within a confidentiality ring with parties or third parties. It proposes that disclosure of confidential information into a ring should no longer require the CMA to obtain and consider representations on confidentiality from the parties. The consultation also proposes to relax the CMA’s procedural rules on providing access to file in the case of interim measures

This is only one step towards any changes being made. The deadline for interested parties to respond to the consultation is 25 September 2026. The government will then consider all responses before proposing draft legislation. We would not expect any concrete legislative changes until at least the second half of 2027.