The economic consequences of the UK’s unchecked rise in mass litigation are real

I welcome Anthony Maton’s engagement with the European Centre for International Political Economy's (ECIPE's) recent study on the impact of mass litigation in the UK. Debate is healthy. But what is striking about his response is not what it says about our analysis, but what it fails to address: the real economic consequences of an unchecked rise in mass litigation.

The rise in cases has been astonishing. In the 2010s, the UK averaged seven to eight new mass litigation cases a year. Since 2020, that number has trebled, peaking at 47 in 2024. There is no “right” number of cases, but the growth is remarkable. Other European countries, facing the same consumer and regulatory landscape, have far fewer cases. Between 2020 and 2023 the UK recorded 1.3 cases per million inhabitants, compared to 0.4 in Germany and just 0.1 in France and Spain. In Denmark, Finland, Italy and Sweden there were none at all. All these countries have alternative systems of collective redress that generally offer faster and fairer redress than in litigation-heavy countries like the US and, now, the UK.

This surge is not because UK firms have suddenly become less compliant or more reckless than their European peers. It is the product of regulatory and judicial changes that have created an unusually inviting environment for mass litigation – amplified by the growth of external investors funding claims. Litigation funding is often defended as a tool to promote access to justice. It can be. But it can also distort justice when cases are driven primarily by [litigation funding], rather than the needs of claimants and the merits of individual cases. The UK has seen an increasing number of copy-cat lawsuits imported from the US, supported by a sophisticated market of litigation funders.

These concerns are not ours alone. The recently published CMS European Class Action Report 2025 shows just how dramatically the scale of litigation has grown. In the UK, the cumulative value of collective actions has surged to more than €154bn, with opt-out cases almost tripling since 2020. In UK competition class actions alone, there were 655 million class members by the end of last year. Hence, the average Brit is member to more than 10 competition class action cases. 

Still, the fastest-growing areas in collective action are natural resources (€47bn) and technology (€36bn). CMS concludes that class actions have shifted from a niche concern to a strategic risk for businesses. That evidence echoes our own findings: this is no longer a marginal issue, but a broader challenge for the UK economy.

Governments have also had second thoughts about past reforms that opened for more mass litigation. The Civil Justice Council was asked for advice by the previous Lord Chancellor on how to reform and regulate third-party litigation funding: in June the council recommended some new basic disciplines. They include reforms to avoid conflicts of interest and mass litigation lawsuits to be controlled by outside investors. The council also proposes a regulatory Consumer Duty for such investors. Importantly, the recommendations also encompass basic transparency requirements. 

Unlike today’s culture of non-transparency, the council proposes that the external investors and their sources of funding should be revealed. These are important steps forward to safeguard against mass-litigation lawsuits that are financially engineered.

Obviously, the rapid rise of mass litigation exacts a toll on companies and the broader economy. Direct costs for defendants and claimants are only part of the picture. Academic research shows that even unsuccessful claims can depress a company’s market capitalisation. And the broader economy bears the cost as entire sectors are devalued and capital is diverted from investment and innovation into legal disputes. Maton disregards these costs and seems to think that insurance can protect everyone from nasty financial consequences. 

But this is the entire point with the estimates in our paper: massive growth of mass litigation lawsuits leads to massive growth in insurance costs. In the US, where insurance data are available (it is not in Europe), collective actions are estimated to cost about 2% of GDP per year – a figure that has risen sharply in recent years. Using conservative assumptions of insurance costs in the UK representing just 10-30% of US levels, the annual cost to the UK economy already runs into the billions. Our study estimated that the cumulative impact could reach £18bn, with some of the heaviest burdens falling on innovative firms.

This is not simply my view. The reaction to our report shows that business leaders, policymakers and independent observers all recognise the risks of allowing litigation to expand unchecked. The Times, the British Chambers of Commerce and others highlighted the costs for jobs, investment and innovation. The UK needs a much better system for collective redress.

Fredrik Erixon is a director at the European Centre for International Political Economy (ECIPE).