England & Wales - Market Insights

Introduction: a maturing market

Class actions in England and Wales (technically referred to as group litigation or collective redress proceedings) have entered a more mature and self-aware phase in their development. Following a period of fairly rapid growth over the last decade, largely driven by increasingly available litigation funding and procedural innovations, the sector is now confronting more difficult questions about control and proportionality in the type of claims that are pursued.

Three trends dominate the outlook for 2026 and beyond:

• First, the aftershocks from the Supreme Court’s decision in PACCAR Inc v. Competition Appeal Tribunal [2023] UKSC 28 have altered traditional class action funding models.
• Second, the collective proceedings regime has developed beyond the growing pains of its formative years, particularly as the Competition Appeal Tribunal (CAT) has shown a greater willingness to scrutinise both certification and methodologies relating to quantum.
• Third, the English court is increasingly comfortable adjudicating collective redress disputes with extra-jurisdictional elements, perhaps most notably in environmental, social and governance (ESG) cases, which will have significant implications for multinational businesses that have elements of their corporate structure located in England and Wales.

Litigation funding after PACCAR

Few decisions have had as immediate and destabilising an effect on the collective redress sector in England and Wales as the Supreme Court’s decision in PACCAR. By characterising certain funding agreements as damages-based agreements, the Supreme Court’s decision gave rise to uncertainty regarding the enforceability of funding arrangements that had been commonly used in collective redress cases funded by third parties.

While subsequent statements from successive UK governments have gone some way towards tempering the immediate effects of the decision in PACCAR, its longer-term impact has been as much behavioural as legal. Litigation funders have responded by becoming both more selective in the cases in which they invest and more innovative in the funding structures that are deployed to progress those cases. This has resulted most noticeably in a greater reliance on portfolio and hybrid funding arrangements. It has also led to a willingness on the part of some funders to take equity stakes in, or provide loan financing to, claimant law firms as a means of managing risk while maintaining exposure to the sector.

These developments raise some important questions. Litigation funding has long been seen as a mechanism for improving access to justice, but as financial structures become more complex, the risk of misalignment between claimant interests and those providing the economic resources becomes greater. This point has not been lost on the Solicitors Regulation Authority (SRA), which in August 2025 published the findings of a thematic review of high-volume funded claims, expressing concern about poor practice and issues of consumer protection in certain cases that they had investigated.

Looking ahead, the Ministry of Justice confirmed (in December 2025) that it intends to bring forward legislation to clarify that litigation funding agreements are not damages-based agreements, with the stated aim of restoring access to third-party funding and bringing greater stability to the sector following the decision in PACCAR. The Ministry of Justice has also indicated that it intends to introduce proportionate regulation of litigation funding agreements, drawing on the recommendations of a review by the Civil Justice Council.

However, the detail and timing of any such reforms remain to be seen and until any such legislation is enacted, PACCAR remains good law. As it stands, the direction of travel is clear: funders are likely to remain cautious but will continue to deploy innovative financing arrangements, and claimant lawyers advising on collective redress and group actions will need to exercise care when advising clients on the range of available funding structures.

The CAT’s coming of age

Introduced by the Consumer Rights Act 2015, the collective proceedings regime is now just over a decade old. Following an initial phase that was often marked by expansive pleadings and ambitious economic theories of loss and damage, the CAT is increasingly signalling in its decisions that rigour will be the watchword of the next decade.

The CAT is tasked with certifying that claims are suitable to be brought as collective proceedings, including that the proposed class is appropriately defined and that the proposed class representative is suitable. The collective proceedings regime also requires that a credible and workable methodology for establishing loss on a collective basis is advanced. Recent refusals of certification by the CAT, including in Christine Riefa Class Representative Limited v. Apple Inc & Others (1602/7/7/23) and Mr David Alexander de Horne Rowntree v. (1) The Performing Right Society Limited and (2) PRS for Music Limited (1634/7/7/24), illustrate the CAT taking a more stringent approach to these requirements.

This rigorous approach has been reinforced by the Supreme Court’s decision in Evans v. J.P. Morgan Europe Ltd & Others [2025] UKSC 48, which confirmed (in a case that was appealed from the CAT) that the choice between opt-in and opt-out proceedings is not a procedural formality but a substantive gateway for certification, and central to the viability of the claim itself. The Supreme Court made it clear that opt-out proceedings are not the default option in collective proceedings and must be justified by reference to the nature of the claims and the interests of class members.

Taken together, these developments show that the CAT is increasingly focused on ensuring that the collective proceedings regime delivers tangible benefits to class members, that the opt-out mechanism is not deployed indiscriminately, but only where appropriate, and that the significant procedural and economic burdens imposed by collective proceedings are justified by their likely outcomes.

ESG and overseas harm

Perhaps one of the most significant recent developments in group litigation and collective redress in England and Wales is the court’s willingness to adjudicate claims arising from damage and harm caused overseas (particularly environmental and human rights harm), where an element of the defendant’s corporate structure is located in England and Wales.

In recent years, cases against multinational companies including BHP (Município de Mariana v. BHP Group UK Ltd and BHP Group Ltd [2022] EWCA Civ 951), Shell (Okpabi & Others v. Royal Dutch Shell Plc [2021] UKSC 3) and Dyson (Limbu & Others v. Dyson Technology Ltd & Others [2024] EWCA Civ 1564) underscore a message from the judiciary: forum non conveniens arguments raised by multinationals will face a steep uphill struggle where governance, control or strategic decision-making occurs in England and Wales. In many respects, these cases represent a reverse form of globalisation, in which companies increasingly face litigation consequences in England and Wales in respect of harm alleged to have occurred overseas.

The above-referenced proceedings against BHP provide a clear illustration of both the scale of potential liability and the procedural complexity confronting multinational corporations. The proceedings, at which the claimants have recently established liability at first instance, involve hundreds of thousands of claimants and encompass a wide range of environmental and economic harms advanced under Brazilian law. Nevertheless, the English court has demonstrated a clear willingness to assume jurisdiction, manage perceived complexity, and permit such claims to proceed to trial where there is a plausible case that strategic oversight and governance were exercised at parent-company level in England and Wales.

For multinational corporations, the implications of these developments are significant. Global operations can generate litigation risk in England and Wales, potentially on behalf of many thousands of individuals, even where the alleged harm occurs thousands of miles away. Traditional notions of corporate separateness offer reduced protection where the court perceives a substantive link between parent-level decision-making and the wider or more remote corporate structure.

Summary

In summary, the expected direction of travel for collective redress and group actions in England and Wales seems clear: collective redress will continue to grow but will be subject to enhanced scrutiny and further consolidation as the sector continues to mature. Funding arrangements will continue to be tested, and the court, regulators and the government will increasingly focus on questions of control and legitimacy in the sector. Defendants can also expect a more disciplined forum in which to defend claims. The challenge will lie in maintaining access to justice while preserving the integrity of the regime, ensuring that collective redress, group actions and the CAT continue to serve claimants and deliver tangible outcomes.

This will result in a more exacting environment for all participants in the sector, but this should be welcomed.