Global business groups oppose British class-action proposal
By Andrew Longstreth, ReutersNEW YORK--A groundbreaking proposal in Britain making it easier to bring antitrust class actions has business groups worldwide fearful that London will become a center for litigation abuses.
February 6, 2013, 12:03 am TWN
Last week, Britain's government proposed a system of “collective actions” that would allow individuals and businesses be part of a class of plaintiffs even if they do not participate in the lawsuit. The proposal, which has yet to be drafted into legislation, would make it easier for individuals and small businesses to recoup damages from price-fixing cases.
The proposal would move Britain closer to the American class-action system, which Europeans have long resisted and derided for what they call its excesses. Under the current system in Britain, all members of a collective action must actively opt into a case and participate.
The government said changes are needed because it has become too costly to bring private lawsuits alleging anti-competitive behavior.
“What is needed from government is to create the legal framework that will empower individual consumers and businesses to represent their own interests,” wrote Britain's business minister Vince Cable in a paper outlining the government's proposal.
Cable, a Liberal Democrat in Conservative Party Prime Minister David Cameron's coalition government, is seen as a champion of the average citizen and a critic of the financial sector. Cameron has not publicly commented on the proposal.
Business groups in Britain and abroad have already lambasted the proposal. Confederation of British Industry Chief Policy Director Katja Hall said in a statement the government's proposal had “let the litigation genie out of the bottle by adopting U.S.-style collective actions.”