CMS’s second annual European Class Action Report 2022 looks at class action activity across Europe over a five-year period from 2017 to 2021. It is the only study to analyse data from class action proceedings across Europe and to map a true picture of class action risk.Claims across Europe reach record-high levels
A total of 110 class actions seeking damages were filed across Europe in 2021, slightly higher than 2020’s previous record-high figure.
This represents a 120% increase between 2018 and 2021. The UK continued to take the lion’s share of activity, accounting for 54% of all claims in Europe, but claims continued to flow across Europe, with the Netherlands (13%) and Portugal (2%) in particular seeing a significant rise in class actions.
Litigation funding encouraging rise in class actions
Across the EU, litigation funding is on the rise, with third-party funding predicted to grow to EUR1.6bn in revenue by 2025. A lack of regulation governing litigation funding has been identified as a cause of concern, with industry experts expecting statutory regulation to be introduced if the use of third-party funding continues to expand.
In June 2021, Axel Voss MEP published a report with draft recommendations for regulating third-party litigation funding. Included in these proposals are rules around transparency and clarity, capital adequacy and fiduciary duty.
There is also a recommendation for funders to be authorised in order to conduct business, with an office registered in a member state and activities monitored by a domestic regulator.
Consumer and competition claims intensifyCMS’s study shows that between 2020 and 2021, there was significant growth in product liability, consumer law and personal injury claims across Europe, with triple the number of claims being filed in 2021 as in 2020.
This growth was driven by a number of factors, including large numbers of Dieselgate claims, relating to the scandal involving German carmaker Volkswagen over the emissions levels of its diesel cars.The financial services sector in particular saw a greater diversity of new claims in 2021. Whereas over a five-year period, product liability, consumer law and personal injury claims and competition law claims comprised 15% of claims; in 2021, they comprised over a third. Claims relating to financial products / shareholders / securities were still the most prevalent type in 2021 however, accounting for 42% of all new claims.
Meanwhile, the technology sector saw a sharp rise in competition cases in 2021. Over the period 2017 to 2021, competition claims comprised fewer than 1 in 5 new claims. In 2021, competition claims accounted for 40% new claims in this sector. This was closely followed by data protection claims (30%), fuelled by GDPR and the potential for data protection issues.CMS’s
European Class Action Report 2022 can be found here.