London – The US Chamber Institute for Legal Reform (ILR) has warned the UK Government that its proposals to introduce opt-out collective actions would trigger litigation abuse and harm businesses operating in the UK.
Responding to a Government consultation on extending class actions in competition cases, the ILR today urged the UK Government not to adopt a US-style litigation culture, which would pile legal expense on businesses of all sizes and increase costs to consumers. The organisation also warned that the policy change would encourage ‘forum shopping’, making the UK a destination for litigants from across Europe and placing even greater burden on the court systems and businesses.
The ILR has recommended that the Government consider voluntary alternative dispute resolution (ADR) schemes, which would offer a suitable means of enforcing competition law in the UK. ADRs would provide for fair and effective resolution of disputes, and would avoid litigation, which the ILR believes should be a last resort.
The submission to the Government from the ILR echoes comments made by the CBI in their own submission to the Government.
Commenting on the ILR response to the BIS consultation, Scevole de Cazotte, Vice President of the ILR, said:
“The British justice system is rightly respected around the world, and not least in the US where we have severe problems with litigation abuse.
“The ILR urges the Government to avoid importing some of the worst aspects of the US Justice System. Opt-out class actions rarely benefit consumers, and merely create a new and lucrative source of profit for legal firms.
“Litigation should always be viewed as a last resort, and the ILR proposes various ways of ensuring that competition cases can be resolved in an efficient and fair manner through the use of practices such as alternative dispute resolution schemes.”
The Department for Business, Innovation & Skills released the consultation Private Actions in Competition Law: A Consultation on Options for Reform on 24th April 2012. The consultation closed 24th July 2012 and can be found here.