Seema Kennedy

The SCJC launched a call for evidence on 24 October on the introduction of the “opt-out” system, which was originally legislated for in the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018.

The prospect of such mass claims has raised significant concerns amongst consumer groups, arguing that such a scheme is unlikely to provide effective redress, with most of the agreed settlements resulting in huge payouts to the legal system and, especially, unregulated third-party litigation funders.

Trade and commercial voices have also spoken out against change, arguing that such claims being introduced in Scotland would act as a positive disincentive to inward investment in Scotland.

Currently, group procedures on an opt-out basis are only in place for competition matters across the UK, with the Department of Business and Trade unlikely to agree extension of the system into non-competition law matters in England and Wales.

Fair Civil Justice executive director, Seema Kennedy, has launched a campaign in Scotland around the introduction of the public consultation by the SCJC.

She said: “The introduction of opt-out group procedures in Scotland would be a disaster for the Scottish economy, but would also be likely to fail the very consumers who would otherwise be expected to benefit. Evidence internationally, but also in competition cases in the UK, demonstrates that proceeds payable to those due redress are a small fraction of any settlement reached.

“Crucially, these claims are very often the result of predatory behaviour by third-party litigation funders, on a completely unregulated basis. Scotland should not be enabling such predatory behaviour by them – many of which are American-based, huge funds seeking massive returns.

“We know an opt-out mass claims legal environment will result in investment decisions benefiting other areas, at the expense of the Scottish economy.”