
Judge Dread
Think tank: Adam Smith Institute
Author(s): Sam Bidwell
October 24, 2024
This report from UK think tank the Adam Smith Institute looks at how lawfare undermines business confidence in the UK.
A new report by the Adam Smith Institute (ASI) outlines how the expansion of class action lawsuits is undermining trust in the UK’s business and legal environment. This increase in class action access and third-party litigation funding has damaged private sector confidence and imposed enormous settlement bills on businesses.
At the same time, the greatest beneficiaries of this shift have not been individual claimants, but claimant-focused law firms and litigation funders. The number of these types of lawsuits, in which multiple claimants who have suffered the same or similar harms can seek compensation from a business, have significantly increased.
While traditionally class actions have required claimants to ‘opt in’ to proceedings, reforms introduced in 2015 have expanded access to ‘opt-out’ claims, in which claimants can apply on behalf of a speculative class of people who may have suffered harms. ‘Opt out’ claims leave businesses exposed to large-scale litigation from large groups of claimants, which are often ill-defined.