OFT: We don’t want US-style class actions

The Office of Fair Trading (OFT) will today (26 November) put its recommendations to the government to encourage private competition actions.

Today’s recommendations follow more than six months of consultation with businesses, law firms and consumer groups after the OFT published a discussion paper on private actions in April (see www.thelawyer.com, 18 April).

OFT chairman Philip Collins told The Lawyer: “What we’re not doing is trying to create a US-style class action litigation system. This is about broadening the category of representative actions that already exist.”

The competition regulator is pushing for greater judicial discretion. It wants judges to have the ability to decide whether cases should be brought on an opt-out basis (where all wronged parties are represented unless they specifically say so) rather than the opt-in system that exists now.

Judges should also be able to decide on the limit of conditional fee arrangements between lawyers and their clients, said the OFT, and decide whether or not whistleblowers should be immune from private actions, among other powers.

Collins said: “We feel that the initial regime has not really worked: there hasn’t been a great deal of private actions. We think that giving judges flexibility is a better system that creating more rules.”

Consumer group Which? already has the right to bring claims on behalf of wronged customers if a competition infringement has already found to have occurred by a regulator. These are called follow-on claims. The OFT will push for stand-alone actions to be brought by Which? and other representative groups: a prior decision is not needed for these to be filed.

But the regulator does not want to provide documents to assist in such actions against a potentially anti-competitive company.

Collins said: “What we say is that all evidence is available through private discovery procedures. If it is not forthcoming from a company, then a court could order us to hand over our documents, but that should be the exception rather than the rule.”

Although the government has not provided a timetable for enacting measures, the Treasury’s 2007 pre-budget report pledged to improve the system of redress for those who have suffered from anti-competitive behaviour.