Mobilising Competition Class Actions In The UK

Article by Edward S. Miller, Marjorie C. Holmes and Kerri Bridges

On 25 May 2016, the National Pensioners Convention (NPC) issued formal proceedings at the Competition Appeals Tribunal (CAT) in London against Pride Mobility Products (Pride) on the grounds of anticompetitive conduct. This is the first collective action of its kind brought in the UK after the law was recently updated in October 2015. It follows failed attempts by the parties to reach a costs settlement.

Current Case

Pride is a U.S. manufacturer of mobility scooters for the elderly, based in Exeter, Pennsylvania. The NPC is an organisation that represents pensioners across the UK. Dorothy Gibson, the NPC's general secretary, aims to represent the claimant class.

On 27 March 2014, the Competition and Markets Authority (CMA) came to the decision that Pride had prevented its retailers from advertising products online and in store below the recommended retail price. Consumers could stand to recover up to £200 per individual, or £7.7m (including interest) collectively across up to 34,000 claimants,1 should the action succeed at court.

Applicable law

The Competition Act 1998 (CA 1998) was amended by the Enterprise Act 2002 to incorporate section 47B, which saw the introduction of a collective action regime for competition cases in the UK. This had limited success, however, as claims could only be filed on an 'opt-in' basis (meaning that claimants had to proactively opt-in to the action), and claimants could only be represented by the specified statutory consumer representative.

This mechanism was shown to be ineffective as only one collective action was brought (Consumers Association v JJB Sports)2, and due to the opt-in process, only 130 claimants came forward in this action, out of an affected class of over 130,000.

The Consumer Rights Act 2015 came into force on 1 October 2015. Schedule 8 to this Act modifies section 47B CA 1998 to additionally incorporate an 'opt-out' system for collective actions, and widen the scope of the CAT's power to the extent that it can now hear standalone claims, not only follow-on claims for damages. The 'CAT Rules', also now in force, expand upon Schedule 8, and set out in detail how collective actions may be brought.

Now that UK class representatives can select between opt-in, opt-out or a hybrid approach, more claims may be encouraged; but to safeguard against vexatious litigation and avoid the stigma placed upon U.S.-style class actions, measures...