Exclusive: UK becomes Europe’s leading jurisdiction for class-action lawsuits
The introduction of “opt-out” claims has seen the UK become the leading jurisdiction for European class action lawsuits, according to new figures from law firm CMS, which show that more than half (54 per cent) of all class action lawsuits filed in Europe over the past five years were filed in the UK.
The UK is now significantly ahead of its closest rival, the Netherlands, in acting as the home to the majority of all European class action lawsuits from 2016 to 2021, following a major uptick in the number of class actions over the past five years, the figures shared exclusively with City PM show.
The uptick comes as new opt-out laws in the UK and other European countries, such as Portugal and the Netherlands, have led to a boom in the number of class action lawsuits across the continent, which has seen the number of class actions more than double from 59 in 2017 to 110 last year.
The opt-out mechanisms let a single claimants bring forward lawsuits on behalf of potentially extremely large groups encompassing millions of people, on an “opt-out” basis, thus ensuring it is financially viable to file and pursue such lawsuits, the CMS report says.
The introduction of opt-out claims into UK law has in turn led to a dramatic increase in third party funding for class action lawsuits in UK courts, that has seen third party litigation funders pay in sums of around £1bn a year. The same shift in Europe that also saw financiers channel around €1bn into European Union class action lawsuits in 2019.
This trend is likely to continue in years to come as litigation funders see a growing opportunity to profit from class action lawsuits in the future, CMS said. However, the law firm warned that litigation funding could be subject to tighter regulation in the future, particularly inside the EU.