Consumer Class Actions in England and Wales: A Potential Step-Change in Litigation Risk

Why should I read this?

On 20 April 2026, the Law Commission published its terms of reference and an initial scoping questionnaire for a new project assessing whether consumer laws could be strengthened through the introduction of a consumer class actions regime.

For consumers, this development may provide a more powerful route to redress. For any business that sells goods or services to consumers, it could increase litigation exposure and materially change the litigation risk landscape in England and Wales. This briefing provides an overview of the Law Commission’s project and why it could represent a step-change for collective actions.

Current position: how consumer collective actions are brought today

At present, businesses face consumer collective action risk in two main ways:

1. First, through traditional civil litigation mechanisms such as Group Litigation Orders (GLOs) or large scale use of omnibus claim forms (opt-in). Common examples of such claims include defective products, financial misselling and data breaches; and
2. Second, through opt out collective proceedings in the Competition Appeal Tribunal (CAT) although these claims can only be brought on the basis of a breach of competition law. Here, a single class representative can bring a claim on behalf of an entire class of consumers without their active participation. The opt-out nature significantly increases exposure and potential scale of liability.

Whichever route is used, collective actions pose heightened risks for businesses by aggregating large numbers of claims into a single action, significantly increasing potential liability. They are typically backed by third-party funders, enabling claims that would not be viable individually, and can carry substantial reputational and defence cost pressures. The resulting asymmetry of risk often creates strong incentives to settle, regardless of the merits. The reality on the ground bears this out: these cases routinely take years to resolve and along the way, they generate extensive satellite litigation – disputes about certification, the scope of the class, funding arrangements, and procedure issues that must be resolved before the underlying claim is even tried. Despite significant growth in opt-out claims and a number of high-profile certifications in the CAT, there has been limited success, and it remains an open question how much of any damages awarded or settlement sum ultimately reach the consumers they are supposed to benefit.

The Government is alive to these issues and is notably conducting a review of the existing competition opt-out regime. A call for evidence was published and is now closed, though the outcome is still awaited.

Separate but related developments are also underway in Scotland. The Scottish Civil Justice Council has recently consulted on whether to implement an opt-out procedure for group proceedings in the Court of Session (with its call for evidence closing in January 2026). While the Scottish regime is distinct, the direction of travel is similar: an increasing focus on whether opt out style collective redress should be available, potentially widening forums and strategy considerations for UK wide consumer disputes.

What is the Law Commission doing?

The Government has tasked the Law Commission with two things: 

1. To set out the benefits and risks of introducing a collective class actions regime for consumer law claims (considering other mechanisms such as public enforcement action and alternative dispute resolution); and
2. To make recommendations as to how such a regime should be designed, were one to be introduced.

The project is sponsored by the Department for Business and Trade.

The stated objectives of any such regime would be to improve consumers' access to redress - both by securing redress in court and ensuring damages are distributed to the affected class, and to promote the efficient conduct of litigation at proportionate cost.

On design, the Law Commission will consider a number of important questions, including: 

• What should constitute a "consumer law claim" for the purposes of any regime?
• Whether the regime should allow for opt-in as well as opt-out claims
• The criteria and process for commencing a class action and defining a class
• The management of class action proceedings; and
• Damages, costs, and settlement, including the funding of claims. 

On funding, the Law Commission will consider any reforms to litigation funding arising from the Civil Justice Council's review¹.

The scoping questionnaire put five focused questions to stakeholders on the potential benefits and risks of an opt-out consumer class actions regime, and the design features needed to improve redress while discouraging speculative or unmeritorious claims.

The Law Commission's terms of reference expressly require it to have regard to the Government's conclusions from its review of opt-out collective actions, including on issues such as methods of financing opt-out proceedings, whether certain sectors are disproportionately targeted by litigants, the effectiveness of damages distribution, and how vulnerable opt-out proceedings are to being exploited.

The project will not consider whether existing substantive consumer rights and rights of redress are themselves sufficient.

What could this mean in practice?

If a consumer class actions regime is introduced, it would create a tailored procedural framework specifically designed for consumer claims - sitting alongside, and potentially displacing, the existing routes discussed above. The consequences for consumer-facing businesses could be far-reaching:

• Increased litigation exposure: A tailored regime designed specifically for consumer claims is likely to make it it significantly easier for consumers to bring collective actions than the current routes allow.
• Broader scope than the existing competition regime:  The current opt-out regime is limited to competition law claims in the CAT. A consumer class actions regime could potentially extend opt-out proceedings to a much wider range of consumer law claims, covering areas such as unfair trading practices and product liability. Sectors that have so far been insulated from collective proceedings could find themselves exposed.

Looking ahead

There are a number of moving pieces here and they need to be viewed together. Several major reform strands are progressing in parallel: the Government’s conclusions from its call for evidence on the CAT opt out regime are awaited, as are the timing of litigation funding reform. While the Government had said it would legislate to reverse PACCAR, the mention of any standalone legislation was omitted from the recent King’s Speech, leaving the position and timing uncertain. Further, the regulatory landscape is also shifting, with the FCA, the SRA and other regulators reviewing the claims management market (including the practices of claims management companies and claimant law firms) (see our briefing), which may in turn lead to reform. Finally, consumer rights and enforcement have been strengthened through the Digital Markets, Competition and Consumers Act 2024.

The result is an evolving landscape. For consumer facing businesses, this increases uncertainty in the short term and calls for careful handling of disputes, complaints, and remediation. Over the medium to long term, the detail is still evolving, but the practical message is clear: evolving ways for consumers to pursue redress, more active enforcement, and potential for a higher likelihood of high volume claims.

Next Steps

The information gathering phase closes on 30 October 2026. The Law Commission will meet with stakeholders and subsequently publish a consultation paper setting out its views and proposals for reform.

This is a genuine opportunity to influence the shape of any future regime - or to make the case that one is not needed at all - before proposals harden. The views submitted at this early stage will inform the Commission's research and, ultimately, its formal recommendations. Businesses and consumer groups alike should consider engaging now, while the conversation is open.
We have extensive experience advising and representing clients across a diverse range of collective actions. Please contact a member of our team if you would like further information or assistance.

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[1] See our briefing for further information: Unpacking the CJC’s Final Report on Litigation Funding