Three years after the Supreme Court's landmark decision in PACCAR, collective redress remains one of the most closely watched areas of litigation reform in England and Wales. What began as a dispute about litigation funding has evolved into a much broader debate about access to justice, the role of third-party funders, the effectiveness of opt-out collective proceedings and whether the UK should expand consumer class actions beyond competition law.
Against that backdrop, the last nine months have seen significant developments in both the Competition Appeal Tribunal (CAT) and government policy, suggesting that the collective proceedings regime is entering a new phase of maturity.
PACCAR: reform promised, but not yet delivered
The aftershocks of PACCAR continue to be felt. In 2023, the Supreme Court held that many litigation funding agreements (LFAs) providing a return calculated as a percentage of damages constituted damages-based agreements (DBAs). Because DBAs are prohibited in opt-out collective proceedings before the CAT, the judgment threatened the viability of numerous claims and funding arrangements.
The government subsequently confirmed its intention to legislate to reverse the effects of PACCAR and clarify that LFAs are not DBAs. The proposal followed recommendations made by the Civil Justice Council (CJC), which described litigation funding as an increasingly important component of access to justice, and recommended legislative intervention together with "light-touch" regulation of the funding market. However, despite repeated promises, reform has not yet materialised. The omission of any reform bill in the 2026 King's Speech has fuelled frustration amongst funders and claimant representatives who argue that uncertainty continues to inhibit investment and case development.
In practice, the litigation funding market has adapted. Most funders have restructured agreements away from percentage-based returns towards multiples of invested capital, allowing claims to continue notwithstanding the Supreme Court's decision. Fears of a funding crisis have therefore eased, but the broader question of legislative reform remains unresolved.
A more interventionist CAT
A notable trend emerging is the CAT's greater willingness to take an interventionist approach and scrutinise collective proceedings at an early stage.
Following several years in which claimants enjoyed considerable success at the certification stage after Merricks, and businesses faced an accelerating trend towards more ambitious mass claims, recent decisions indicate a more robust approach and a reverse of this trend. The CAT is scrutinising funding arrangements, damages distribution methods and mechanisms, the adequacy of proposed class representatives and overall cost-benefit analysis.
For businesses, this is an important development. Early concerns that certification would be a relatively low procedural hurdle have not been borne out. Instead, the CAT appears to be placing increased emphasis on practical questions that go beyond the underlying merits of the competition claim. How will damages be distributed? Is the funding structure robust? Does the claim genuinely deliver benefits that justify collective treatment? These questions are receiving more attention at the certification stage.
Reassessing the opt-out regime
Concerns have emerged from both businesses and policymakers about the costs generated by collective proceedings, the burden placed on defendants and the extent to which consumers are ultimately benefiting from settlements and damages awards.
Recent developments have prompted questions about whether collective proceedings are delivering meaningful consumer redress. In the Boundary Fares rail litigation, a settlement of £25 million for class members was made available, yet less than 1% (around £200,000) was claimed by rail passengers. The outcome has become a focal point in wider debates about the effectiveness of opt-out collective proceedings, the distribution of settlement funds and whether collective actions are achieving their access to justice objectives. Such concerns are likely to feature prominently in ongoing reviews of both the CAT regime and the future design of consumer class actions
Consumer class actions are on the agenda
Perhaps the most significant long-term development is the launch of the Law Commission's project into whether England and Wales should introduce a broader consumer class action regime. The project, announced in April 2026, will consider the benefits and risks of extending collective redress.
This would be a major expansion if introduced. Currently, opt-out collective proceedings are largely confined to competition claims before the CAT. Although mechanisms such as Group Litigation Orders and representative actions are available in the High Court, they remain opt-in procedures and have inherent practical limitations for low-value consumer claims.
While recommendations have yet to emerge, the very existence of the project demonstrates growing governmental interest in collective consumer enforcement.
Group litigation in the High Court remains active
Alongside developments in the CAT, the High Court continues to see significant growth in group litigation. Product liability claims, data breach actions, environmental disputes, financial services litigation and large consumer claims continue to generate substantial claimant activity, often supported by sophisticated third-party funding arrangements.
The recently concluded Dieselgate liability trial illustrates how large-scale group claims can remain active for many years, generating substantial litigation costs, regulatory scrutiny and reputational exposure long after the underlying events occurred. Similar trends can be observed across financial services, product safety and technology-related disputes.
Looking ahead
Taken together, these developments suggest that collective redress is not contracting, but evolving. The headline growth phase that followed Merricks appears to be softening to a more mature regime characterised by greater judicial scrutiny, closer attention to funding structures and a renewed focus on whether proceedings genuinely deliver benefits to consumers. At the same time, policymakers continue to consider whether opt-out collective redress should expand beyond its competition law roots.
The combination of pending PACCAR reform, the review of the CAT regime and the Law Commission's work on consumer class actions means the next few years are likely to prove decisive in shaping the future of mass litigation in England and Wales.
For businesses, the key message remains unchanged: collective actions continue to represent a significant source of legal, financial and reputational risk, and the mechanisms available to pursue large-scale consumer claims are likely to remain available and high on the reform agenda for the foreseeable future.
