A new consumer redress procedure on the horizon?

The introduction of a consumer class action regime

On 20 April 2026, the Law Commission announced that it had been asked by the Government to assess whether the way consumer laws are enforced could be strengthened through the introduction of a consumer class actions regime.

The initial stage is for anyone with an interest to respond, by 30 October 2026, to an Initial Scoping Questionnaire. The project will identify the benefits and risks associated with the introduction of a consumer class actions regime. The stated objectives of any such regime include: (1) improving consumers’ access to redress, both by securing redress in court and by ensuring that damages are distributed to the affected class; and (2) promoting the efficient conduct of litigation at proportionate cost. Although the Terms of Reference state that state that the Law Commission will consider whether a new regime should ‘opt-in’ as well as ‘opt-out’ claims, the Initial Scoping Questionnaire focuses upon the introduction of an opt-out consumer class action regime.

Historically, there has been a resistance to embracing US-style class actions, but the success of the competition collective proceedings regime (at least in terms of caseload), and the measure of comfort provided by the increasingly testing certification procedure in that regime, may now become the template for broader consumer redress. There are existing High Court mechanisms through which consumer group claims can be brought, including Group Litigation Orders (GLOs) and representative actions, but these have limitations. Consumer group litigation actions have been criticised as slow and costly. Representative actions suffer from the tight requirements which exclude any individual damages compensation which is the usual remedy that consumers seek. Given these restrictions on consumer group access to justice more and more cases have been packaged as competition breaches and made their way into the CAT. This trend combined with the Law Commission’s new review suggest pressure is building toward a wider consumer collective redress regime.

The core challenge for the Law Commission is to structure a regime which strikes a fair balance between access to justice and the risk of encouraging weak claims which pressurise defendants. We consider below some of the options available.

The problems with the existing consumer collective address routes

There are currently three mechanisms for collective redress for consumers in the High Court. First, GLOs which have been a feature of litigation in England and Wales since 2000, a result of the recommendations in Lord Woolf’s Access to Justice Final Report. Since then, over 125 GLOs, for example the Lloyds/HBOS litigation, have been made out of which approximately one third could be categorised as consumer claims. Second, Claimants have also used the procedure under CPR 19.8 (representative proceedings with the “same interest” requirement): for example, see Commission Recovery Limited v Marks and Clerk LLP [2024] EWCA Civ 9. Third, claimant groups have used omnibus claim forms for claims which can be “conveniently disposed of” in the same proceedings: for example, see Abbott & Ors v. Ministry of Defence [2023] EWHC 1475 (KB); and Morris & Ors v Williams & Co Solicitors (A Firm) [2024] EWCA Civ 376.

Where claims are of high value, GLOs can be an effective way of enabling hundreds/thousands of claims to be litigated and managed together, by a single designated judge. However, the GLO procedure is an “opt-in” regime which suffers from various drawbacks:

1. Claimants must take active steps to join the group which requires a claimant law firm to incur significant costs in the book build (advertising the claim and then conducting due diligence on potential claimants).
2. For claims which individually are worth very little, this process becomes uneconomical and disproportionate as the initial costs alone may exceed the potential value of the individual claim. Thus, low value personal injury claims cannot viably be brought by a GLO.
3. Frequently, only a relatively small proportion of those eligible to join the group are likely to do so, particularly if the number of people affected is large and the value of each individual claim relatively small.

Whilst the Pan NOx litigation is taking place through the mechanism of multiple GLOs, this has been a very difficult process for the Court and for parties. There are over 1 million consumer claims in respect of so called ‘defeat devices’ and around a dozen GLOs have been issued. This has led to overlap, duplication and enormous costs to be incurred which has attracted criticism of the court. In Various Claimants v Mercedes-Benz Group AG and Others [2024] EWHC 1728 (KB), the Court was highly critical of the Claimants’ budgets stating that they were “replete with numerous examples of costs which simply cannot be justified”; “redolent of financial incontinence”; “strain[ing] all credulity”; and “wholly disproportionate” and reduced the claimants’ overall estimated costs from over £207 million to £52 million. (Please also see Adam Kramer KC’s blog on case management in those proceedings here.)

The unsuitably of a GLO for consumers with low value claims is demonstrated by the fact that there have been very few of those claims in the financial disputes arena. The RBS Rights Issue is the last time a s.90 FSMA consumer GLO was litigated and it demonstrated the serious difficulties of managing tens of thousands of consumer claims. Almost all s.90 and s.90A claims are (now) brought by sophisticated investors or institutional investors and not by consumers. Where exceptionally consumer securities claims are brought, these have failed when the representative action route has been attempted (Wirral Council v Indivior Plc [2025] EWCA Civ 40) and have proceeded by way of omnibus claim forms. The omnibus claim form has in essence the same problems as GLO because it is another opt-in method with heavy up-front costs of building the book.

In contrast to High court litigation, competition claims (essentially, claims in respect of an infringement or alleged infringement of competition law), may be brought on either an “opt-in” or “opt-out” basis in the CAT. “Opt-out” collective proceedings are proceedings brought on behalf of each class member except any member who opts out by notifying the class representative that their claim should not be included in the proceedings. Where “opt-out” collective proceedings are permitted, a person may therefore have a claim brought on their behalf without taking any affirmative step and, potentially, without even knowing of the existence of the proceedings and the fact that he or she is represented in them. The up-front costs of an opt-out regime are dramatically lower than an opt-in regime and hence most claimant firms seek permission for opt-out CAT proceedings (such as in Mastercard).

A second significant feature of the collective proceedings’ regime is that it enables liability to be established, and damages recovered without the need to prove that members of the class have individually suffered loss: it is sufficient to show that loss has been suffered by the class viewed as a whole. This is of course impermissible in any High Court proceeding for damages-based causes of action, even if a representative action is brought.

This opt-out regime introduced by the Consumer Rights Act 2015 has resulted in 69 claims so far. There are now major consumer claims before the CAT including Which? v Apple; Gutmann v Apple; Stasi v Microsoft; Gormsen v Meta; Neil v Sony; and Shotbolt v Valve.

Only three cases have resulted in judgments and only one case found for the claimant consumers (in Kent v Apple). The regime illustrates the challenges of balancing the need for access to justice and meaningful consumer redress. For example:

1. The long running Merricks v Mastercard litigation resulted in a settlement of £200 million with individuals potentially only receiving damages of between £45 and £70 each: see Merricks v Mastercard [2025] CAT 28
2. In Gutmann v First MTR , while the class representative incurred costs of over £18.7m, train passengers had claimed only £216,000 out of a settlement amount of £25 million from rail operator Stagecoach in 2024.
3. More recently, the CAT refused to grant a Collective Proceedings Order (CPO) in Waterside Class Limited v Mowi ASA & Ors [2026] CAT 32, as it was not satisfied that the relevant costs and benefits justified continuing the proceedings certify a £382m claim against salmon producers. Drawing on its recent experience in Gutmann, the Tribunal stated at [20] that “when considering the costs and benefits of the proceedings it is appropriate, at certification, to consider how damages are to be distributed. Outcomes which are predominantly for the benefit of lawyers and litigation funders, rather than class members, are not in the public interest.”

In Evans v Barclays [2025] UKSC 48, the Supreme Court confirmed that the CAT can consider merits when deciding opt-out certification, and weak claims may properly be refused opt-out treatment. As stated in (Merricks v Mastercard Inc [2020] UKSC 51; [2021] All ER 285, [98]), “A class action procedure which has these features [the potential to opt out and to recover aggregate damages] provides a potent means of achieving access to justice for consumers. But it is also capable of being misused.”

Addressing the Bar Council’s International Collective Redress Conference in London on 8 May 2026, the President of the CAT, Dame Kelyn Bacon warned that the CAT would “examine the merits of opt-out claims more intensively at the certification stage”. She noted that in refusing to certify the action in Waterside Class Limited v Mowi ASA & Ors, the tribunal expressed concern about the potential distribution of damages if the claim had succeeded. There was, said the judge, a “potential for a disconnect between the ultimate benefits to the class and the commercial benefits to the lawyers and funders”.

The issue of consumer claims with dubious merits which have been shoehorned into a competition breach package is receiving more attention from practitioners and organisations. For example, Fair Civil Justice have raised concerns about environmental and data breach claims being brought before the CAT where the claims do not raise any competition law issues.

Conclusion

There are good grounds to conclude that the current High Court and CAT routes for consumer collective address are sub-optimal for all parties. As the Law Commission has rightly identified, there is a case for a change to the status quo. Increasing access to justice for consumers with meritorious claims and doing so in a cost-effective manner which is fair to the interest of defendants is a complex challenge. It seems likely that the Law Commission may recommend a new procedure that involves an opt- out process, similar to that which has been available in Australia since 1992.  Whilst many claimant-side stakeholders such as funders and consumer redress law firms will hope for a substantial widening of the scope for claimants to bring ‘mass claims’, this remains to be seen.

Look out for an update to this blog upon the Law Commission issuing its recommendations.