European class action claims hit new record in 2021, according to CMS study
UK accounts for 54% of total class action activity in Europe, fuelled by surge in litigation funding
European class action claims hit a fresh record last year, driven by activity in the UK, according to a new CMS study.
A total of 110 class action suits were filed in Europe last year, one more than in 2020 and a 120% increase since 2018, according to CMS’s annual European Class Action Report. UK activity accounted for 54% of European claims, with the number of people involved in UK competition class actions almost tripling to 171m from 69.4m in 2020, CMS data show.
Kenny Henderson, a litigation and arbitration partner at CMS, said: “Class action risk continues to increase across Europe, and it is high on the risk register for multinationals.”
The increase in activity is partly due to the growth in litigation funding, particularly in the UK where funders have amassed a war chest of £2.2bn, according to RPC. In the EU, third-party funding is predicted to grow to €1.6bn by 2025, CMS said.
Henderson said: “Claimant law firms and litigation funders are more active than ever before, looking for new claims to bring – which they see as profitable opportunities. Class actions can be expensive to fund, and litigation funders will of course do their diligence carefully. But many funders are focusing on this area given the potential for very high rewards.”
Last year also saw a record number of collective proceeding order applications filed in the UK’s Competition Appeal Tribunal. Some 85% of those applications were stand-alone claims, where the alleged breach of competition law has not yet been established by the competition authority and must be proven by the claimant. That is in sharp contrast to the previous three years where follow-on claims made up the majority of applications.
Henderson said: “A ‘rush to the courthouse’ dynamic is developing, where many people will be involved in multiple class actions without their knowledge. Claimant law firms and litigation funders are not waiting for regulators; they are increasingly bringing stand-alone claims where they will seek to prove liability.”
The data also showed a significant increase in product liability, consumer law and personal injury claims in Europe, driven in part by the large numbers of ‘Dieselgate’ claims involving German carmaker Volkswagen, which had rigged tests to understate the emissions of its diesel cars.
In February UK law firm Fieldfisher set up an outpost in Berlin to serve as a base for its specialist group litigation unit, Fieldfisher X, in a bid to leverage legaltech solutions to assist clients in navigating the growing German mass litigation market.