Toby Gee considers how the Law Commission’s consumer class actions project will alter the litigation landscape for product liability
23rd Apr 2026
Large scale consumer actions are infamously complex, slow, risky and astronomically expensive[1]. Both consumers and potential defendants argue that the current system[2] fails to provide justice. Does this simply reflect the nature of the beast, or can access to justice in the UK be improved by introducing a new system for class consumer actions, in a way that is both fair and cost-efficient for claimants and defendants alike?
Law Commission consultation on a new system for consumer class actions
On 20 April 2026 the Law Commission announced a new project that will consider the potential introduction of a consumer class actions regime[3].
The initial stage is for anyone with an interest to respond, by 30 October 2026, to an Initial Scoping Questionnaire.
Although the Law Commission’s consultation relates to consumer class actions generally, this article focusses on claims for defective products.
Is the current system broken?
The challenges of class actions are many and varied.
A defective product may be supplied to thousands or millions of people, through a variety of delivery routes. Whether a product is substandard is often a complex question. The expected standard may be poorly defined. Detailed statistical or other expert analysis may be required to establish degrees of risk and whether there is a genuine ‘problem’.
A key challenge is the balance between the relatively small value of any claim but the correspondingly high number of potential consumers affected. The level of damage or loss for a given individual may seem negligible or modest by reference to the cost of potential litigation or other redress scheme, but multiplied millions of times by the number of users. Products also affect consumers in different ways and to different extents. It is a huge challenge for both claimant teams and defendant teams to implement an effective and efficient system for identifying those individuals who have a legitimate claim, while avoiding flooding class actions with speculative claims with little merit.
Once a critical mass of claimants has been obtained, identifying common issues to cut the Gordian knot of an almost infinite number of issues is often a fraught process informed by strategic and funding issues.
There may be also be a substantial number of defendants, potentially based in different countries and with different, albeit arguably related, product/service issues.
Perhaps the biggest challenge of all is the immense cost of assembling, analysing and presenting claims. Class actions can soak up huge amounts of court time, legal and experts’ fees, for claims that defendants may argue are numerous but involve little or no genuine loss. Conversely, claimants with levels of injury or damage that have a serious impact on them may struggle to obtain recompense.
Litigation funders suffered a set-back by virtue of the PACCAR decision of the Supreme Court in 2023. In PACCAR, the Supreme Court held that litigation funding agreements (LFAs) which entitled the funder to a percentage of any damages recovered were unenforceable ‘damages-based agreements’. The Civil Justice Council has recommended legislating to reverse PACCAR[4], but this has not (yet) happened.
The problems referred to above largely relate to the Group Litigation Order system in England and Wales. The ‘representative action’ process throws up both similar and other challenges.
So it is probably uncontroversial to state that these claims present real difficulties. They are too expensive. Too complex. Too slow. In short, too inefficient. Access to justice for affected claimants is also questionable, particularly where the viability of a claim depends on a litigation funder’s decision whether to support it, which in turn depends on a financial risk/benefit analysis for the funder.
The big question is therefore not so much whether there are problems in this kind of litigation but whether an alternative system would deliver the key aims of (1) improved access to justice; (2) efficient conduct of litigation at proportionate cost[5].
Is the scope of consultation wide enough?
Opt-in or opt-out?
A crucial aspect of the Law Commission’s consultation is whether a consumer class action regime should be ‘opt-in’ or ‘opt-out’.
‘Opt-in’ regimes require an active decision from a claimant to join the action. Claimant legal teams need to do a lot of work to publicise, communicate, explain and ‘recruit’ claimants. A substantial amount of work may be required simply to put a cogent case to a litigation funder to fund the action. ‘Opt-in’ schemes have been argued to restrict access to justice[6].
By contrast, an ‘opt-out’ regime means qualifying users are automatically included without requiring any positive action on their part. An ‘opt-out’ regime may therefore immediately gather a very large number of claimants. This is not only more efficient in bringing affected claimants into an action, but also more readily creates a higher maximum outcome for a litigation funder concerned about cost-effectiveness. So it can improve claimants’ access to justice. But ‘opt-out’ regimes also run the risk of including vast numbers of claimants with meritless claims, or who have no interest in whether their claim is included; or of creating low-merit claims which can be extremely expensive for defendants but are ultimately of little benefit to claimants. The burden of such claims on defendants is very high but also imposes a cost which is likely to be ultimately passed on to consumers by way of increased product cost.
There is no ‘opt-out’ regime for product liability claims, but there already is for competition law class actions[7]. After a decade, how well it has worked is a matter of debate[8].
Problem definition and scope
Unsurprisingly, the Law Commission’s consultation therefore focusses heavily on whether to introduce an ‘opt-out’ scheme, and, if so, what it should look like. What is surprising is that the Terms of Reference state that the Law Commission will consider whether a new regime should ‘opt-in’ as well as ‘opt-out’ claims; but the Initial Scoping Questionnaire asks only about ‘opt-out’ regimes.
It might have been expected that the Initial Scoping Questionnaire would ask respondents what works well and what badly about the current system, given that the Terms of Reference expressly require the Law Commission to take into account other available mechanisms for consumer redress, and to consider how such a regime would improve consumers’ access to redress compared with what is currently available.
For example, rather than introducing a whole new system for dealing with such claims, could adjustments be made to specific aspects of the current system which would help to accomplish the twin aims of access to justice and cost-effectiveness? For example, shifting the burden of proof on causation; adopting a ‘paper-based’ approach to some issues; limiting recoverable costs; instituting a specialist tribunal to determine specific (or all) issues.
On the consultation as currently framed, there appears to be a risk of focussing too heavily on whether a new ‘opt-out’ scheme would accomplish the stated aims of improving access to justice and having a more cost-efficient system. I suggest that identifying the problems with the current system would assist in clarifying whether a new system would be fundamentally more effective, or would simply replace one set of problems by another.
Big data
Given that one of the major challenges of class actions is managing and analysing the vast volume of information, I would hope that the use and limits of computer analytical tools (including AI tools) will be actively considered in ensuring that any proposed regime is both efficient and capable of delivering just outcomes.
Contribute and watch this space
The current system for dealing with group litigation consumer claims is extraordinarily expensive and cumbersome for both parties and the courts. The aims of achieving an efficient and fair system for redress in appropriate cases, at proportionate cost, are laudable. The Law Commission’s consultation should be welcomed. Interested parties should contribute. That includes claimant groups, defendants and industry groups affected by such claims, insurers and litigation funders. The better informed the Law Commission is, the better the Law Commission’s report and any proposals are likely to be.
It will undoubtedly take time. It’s too early to tell how the Law Commission’s project will alter the consumer litigation landscape. Meanwhile, litigants will need to continue to grapple with the current system.
Article written by Toby Gee.
Footnotes:
[1] For example, in the current diesel emissions litigation, the claimants’ legal costs budget presented to the High Court for approval came to over £340 million, for the first two stages of the action. The Court estimated that by that point the case was likely to be around 33% progressed: Re Pan NOx Emissions Litigations [2024] EWHC 1728 (KB).
[2] This article relates to the UK.
[3] https://lawcom.gov.uk/news/law-commission-to-consider-the-potential-introduction-of-a-consumer-class-actions-regime/
[4] Review of Litigation Funding – Final Report, Civil Justice Council
[5] https://cdn.websitebuilder.service.justice.gov.uk/uploads/sites/54/2026/04/Consumer-Class-Actions-Project-Terms-of-Reference.pdf
[6] See eg Repackaging class actions, Sahil Thapa, (2025) 44(4) Civil Justice Quarterly 246-267
[7] The Competition Appeal Tribunal
[8] In August 2025 the Department for Business and Trade called for evidence as to the operation and impact of this scheme: Opt-out collective actions regime review: call for evidence – GOV.UK. The outcome of that project has yet to be made public. The Law Commission’s Terms of Reference for considering the introduction of a collective class actions regime include considering the Government’s conclusions as to the effectiveness of the competition claims scheme.
