Class Actions in England and Wales: Right around the Corner?

Class actions have long been a defining feature of US litigation.

They allow claimants with small individual losses to combine their claims into a powerful collective action, making litigation viable where a standalone claim would never justify the cost.

England, by contrast, has historically been far more cautious. But with US plaintiff firms and litigation funders increasingly active in London, collective litigation is often described as the “next big thing”.

This article explains how US class actions work, how England’s Group Litigation Order (GLO) system compares, and whether a true opt‑out class action model is on the horizon.

Class Actions in the USA

US class actions have produced some of the largest settlements in global litigation. Examples include the $7.2 billion settlement for Enron shareholders and the $2.95 billion paid by Petrobras in 2018. Their power comes from the fact that one representative can sue on behalf of an entire class, dramatically reducing administrative burden.

To certify a class under US Federal Rule 23, the representative must show:

• the class is so numerous that joinder is impracticable
• there are common questions of law or fact
• the representative’s claim is typical of the class
• the representative will fairly and adequately protect the class

Class certification is the key battleground. Once certified, all members of the defined class are automatically included unless they opt out. Because the US does not follow England’s “loser pays” costs rule, there is little downside to staying in. Add the possibility of punitive damages, unavailable in England, and defendants face enormous pressure to settle.

Class actions are common in shareholder litigation and product liability claims, where large numbers of consumers suffer similar losses.

Group Litigation Orders: England’s Opt‑In Alternative

For years, England’s closest equivalent to a class action has been the Group Litigation Order under CPR 19.

A GLO allows the court to manage claims that raise common or related issues of fact or law. But unlike US class actions, GLOs are strictly opt‑in: every claimant must issue their own claim form and join the group register.

Once a GLO is made, judgments on issues entered on the group register bind all claims containing those issues. This avoids inconsistent outcomes and allows “test cases” to lead the way.

However, GLOs are far less streamlined than US class actions:

• there is no single representative claimant
• different claimants may have different interests and legal teams
• courts interpret “common or related issues” narrowly
• uptake has been low, only around 100 GLOs since 2000

There have been notable examples, such as the RBS shareholder litigation and Vedanta v Lungowe, where 1,800 Zambian villagers brought claims against a mining company. But overall, GLOs have not triggered a class action revolution.

Competition Claims: England’s First Opt‑Out Class Action Mechanism

The Consumer Rights Act 2015 introduced England’s first true opt‑out collective action regime, but only for competition damages claims.

These arise when a competition authority (such as the CMA or European Commission) finds a breach of competition law, such as a cartel. Anyone who bought the cartelised product and paid an inflated price can claim damages.

These claims are heard in the Competition Appeal Tribunal (CAT). Like the US system, they require class certification. The representative must show:

• an identifiable class
• common issues
• suitability for collective proceedings

Despite predictions of a class action boom, only a handful of claims have been issued. The most famous is the £14 billion claim brought by Walter Merricks against MasterCard, potentially covering anyone who used a MasterCard between 1992 and 2008.

The CAT initially refused certification, criticising the proposed damages methodology. The Court of Appeal overturned that decision, finding the CAT had demanded “too much” at the certification stage and conducted a “mini‑trial”. The case returned to the CAT, signalling judicial willingness to make the regime work, but the fact remains that no opt‑out class has yet been successfully certified.

Conclusion

US‑style class actions can be a powerful tool for handling mass claims, from shareholder losses to product defects.

England has not yet adopted a fully effective mechanism for such claims, but the commercial incentives are enormous; for claimants, law firms and litigation funders alike.

With competition claims opening the door to opt‑out proceedings and judicial attitudes shifting, it is likely a matter of when, not if, class actions take off in England and Wales.