Class actions pose increasing threat to UK firms, new research shows

Class action lawsuits pose an increasing threat to UK companies, according to new research showing the majority of British people would now willingly take part in collective claims.

Most British people (60 per cent) would now be willing to take part in a claim against a company whose actions have impacted them, while 55 per cent would be willing to sign up to a claim against their own employer, a poll of 2,127 UK participants found.

The poll showed there is also a growing appetite for collective competition claims, as it found 52 per cent of British people would join a class action if they were overcharged because of a company’s dominant market position.

The survey showed half (50 per cent) of those surveyed would also be willing to sign up to a collective action lawsuit if they had been overcharged because of a lack of information.  

The findings come as the UK is increasingly becoming a hub for collective action lawsuits, following the introduction of new rules allowing for opt-out claims.

The introduction of new rules saw the total number of UK class actions triple over a two year period, from 16 in 2018 to 75 in 2020.

The survey, in Portland’s third annual Class Action Report, showed a higher awareness of and appetite for class action lawsuits in the US than in the UK.

It showed 44 per cent of British, compared to 62 of Americans, believe class actions often secure compensation for those affected, while 43 per cent of UK participants, compared to 62 per cent of US participants, believe collective actions help hold companies to account.  

However, the polling found the number of people reporting “high awareness” of class actions has increased in Britain over the previous year, from 18 per cent in 2021 to 20 per cent in 2022.

British people are however significantly more sceptical of advertising than their US counterparts, according to Portland’s survey, which showed just 14 per cent of Brits, compared to 27 per cent of Americans, would trust adverts about class actions on TV.