Consumers turning away from collective action cases

A recent study reveals a significant decline in consumer trust regarding collective action cases in Great Britain, with fears of online scams now surpassing privacy concerns as the primary deterrent for potential claimants. This growing skepticism poses a substantial challenge for law firms and the broader collective redress landscape, particularly in competition law claims where participation rates for approved settlements remain notably low. The research highlights a critical need for enhanced credibility and transparent communication from trusted sources, such as the courts and legal professionals, to rebuild public confidence and ensure effective access to justice for affected individuals. The findings underscore the urgency for a centralised accreditation system or 'trust-mark' to legitimise genuine claims amidst a proliferation of online fraud.

The landscape of collective redress in Great Britain is facing a significant challenge as consumers increasingly shy away from participating in collective action cases. Recent research indicates that a pervasive fear of online scams has become the leading reason for this reluctance, overshadowing previous concerns about privacy. This erosion of trust directly impacts the efficacy of collective actions, which are designed to provide access to justice for large groups of individuals who have suffered similar harm, often against powerful corporate entities.

This development is particularly pertinent given the increasing prevalence and value of collective actions in the UK, especially within the competition law sphere. The success of these mechanisms hinges on broad consumer engagement, yet a substantial portion of the public is now actively avoiding such claims due to perceived illegitimacy. This article will delve into the statutory and doctrinal foundations of collective actions in Great Britain, analyse the factors contributing to the decline in consumer trust, and explore the implications for legal practitioners and the future of collective redress.

The core thesis is that while the legal framework for collective actions has evolved to facilitate group claims, the practical challenge of securing consumer participation is being undermined by a broader societal distrust in unsolicited online communications. Addressing this gap requires a concerted effort from legal professionals, regulators, and potentially the government, to foster transparency and establish clear markers of legitimacy for collective redress initiatives.

Collective actions in Great Britain operate primarily through several distinct procedural mechanisms. The most flexible and widely used is the Group Litigation Order (GLO), established under Part 19.10 of the Civil Procedure Rules (CPR). GLOs are an 'opt-in' mechanism, allowing multiple claimants with common or related issues of fact or law to have their cases managed together, thereby streamlining proceedings and sharing costs. They are frequently employed in diverse areas such as product liability, financial mis-selling, and data breaches.

Another avenue is the representative action under CPR 19.8, which is an 'opt-out' mechanism where one or more persons can represent others who share the 'same interest' in a claim. Historically, this route has been less utilised due to the stringent interpretation of the 'same interest' test. While the Supreme Court's decision in *Lloyd v Google LLC* [2021] UKSC 50 encouraged greater use, subsequent cases like *Wirral Council (as administering authority of Merseyside Pension Fund) v Indivior plc* [2025] EWCA Civ 40 and *Getty Images (US) Inc and others v Stability AI Ltd* [2025] EWHC 38 (Ch) have highlighted ongoing challenges, particularly concerning the assessment of individual damages and the appropriateness of bifurcated proceedings.

The most significant development in collective redress, particularly for consumer protection, came with the introduction of the opt-out collective proceedings regime in the Competition Appeal Tribunal (CAT) under the Competition Act 1998, as amended by the Consumer Rights Act 2015. This regime, governed by Section 47B of the Competition Act 1998, allows a class representative to bring a claim on behalf of an entire class of affected individuals for breaches of competition law, with class members automatically included unless they actively opt out. This is currently the only genuine opt-out collective action mechanism in the UK.

The observed decline in consumer engagement with collective actions, particularly those related to competition law, stems largely from a pervasive distrust fueled by the rise of online scams. A recent survey indicated that 36% of consumers would "actively avoid" making a collective action claim due to fears it might be a scam, a concern that now outweighs worries about privacy. This skepticism is exacerbated by the nature of online communication, where consumers are increasingly wary of unsolicited offers and unfamiliar websites, making it difficult to distinguish legitimate redress opportunities from fraudulent schemes.

The impact of this distrust is evident in the low uptake of compensation even in approved settlements. For instance, in the *Justin Gutmann v Stagecoach South West Trains* case, where a settlement of up to £25 million was approved, only £216,500 was claimed by class members, leading to a significant reduction in the final settlement amount. This highlights a critical disconnect between the availability of redress and consumers' willingness to engage. Furthermore, the research indicates a "significant engagement gap among lower-income households," who are often most impacted by corporate misconduct but are less likely to come forward, regardless of the potential compensation.

To counter this, the study identified key sources of trust. Courts were considered a trusted source by 28% of consumers, while lawyers representing claimants were trusted by 23%. Notably, consumer experts like Martin Lewis garnered the highest trust, at 46%, far surpassing the trust placed in class representatives (10%). This suggests that effective communication and endorsement from recognised, independent figures or institutions are crucial for legitimising collective actions in the public eye. The Legal Services Board (LSB) and the Financial Conduct Authority (FCA) both have mandates related to consumer protection and trust in legal and financial services, with the FCA possessing powers under the Financial Services and Markets Act 2000 (FSMA) to mandate collective redress schemes.

The procedural complexities of collective actions in the UK also contribute to public confusion. While the CAT's opt-out regime for competition claims is intended to simplify access to justice, the nuances of GLOs and representative actions, particularly the 'same interest' test, can be difficult for laypersons to understand. The ongoing Law Commission project to assess the introduction of a broader consumer class actions regime beyond competition law signals a recognition of the need for more effective collective redress mechanisms. However, any such expansion must concurrently address the fundamental issue of consumer trust to be truly effective.

One proposed solution is the implementation of a centralised accreditation system or 'trust-mark' by the government. Such a system could provide a clear, verifiable signal of legitimacy for collective action claims, helping consumers distinguish genuine opportunities from scams. This would align with the broader efforts of regulators like the LSB to strengthen legal sector oversight and safeguard public trust.

The increasing reluctance of consumers to participate in collective action cases, driven by fears of online scams, presents a significant hurdle to access to justice in Great Britain. This trend not only undermines the intended benefits of collective redress mechanisms but also poses a reputational and operational challenge for law firms engaged in this area. The low uptake of compensation in even successful collective settlements underscores the urgent need for a strategic shift in how these claims are communicated and validated to the public.

For practitioners, the implications are clear: a greater emphasis must be placed on transparent, credible communication strategies. Leveraging trusted intermediaries, such as consumer experts, and advocating for official endorsement mechanisms like a government-backed 'trust-mark' could be vital. Furthermore, law firms should proactively address consumer skepticism by providing clear, accessible information about the legitimacy and process of collective actions, perhaps through collaborations with regulatory bodies like the LSB or FCA. As the Law Commission explores expanding consumer class actions, addressing the foundational issue of public trust will be paramount to ensuring that these mechanisms effectively serve their purpose of providing widespread redress.