You would have had to have been hiding away not to have come across the term collective action in recent years. These involve individuals being brought together to make claims against companies that are accused of wrongdoing. The best known of these were the actions taken against companies for mis-selling payment protection insurance.
Around 65m PPI policies were issued between 1990 and 2011, and many were mis-sold. As a result banks paid out compensation of more than £38bn.
What You Need to Know About Collective Actions and Funding
Collective actions are brought against defendants who are alleged to have to have practised wrongdoing resulting in a loss to the claimants in a similar way. The loss to one claimant may not be worth trying to recover due to the litigation costs involved, but pursuing the case as part of a collective action may make it more viable due to economies of scale.
Even so, groups of plaintiffs may have to look at their funding options unless they go down the no-win, no-fee route. However, since the increase in the number of these actions over recent years due to a focus on access to reparation and justice, there has been a similar growth on the number of companies offering third-party litigation funding. By searching online you will find sources of funding for these actions from companies such as Novo Modo.
The Difference Between ‘Opt-in’ and ‘Opt-out’
These refer to two different kinds of collective actions which can take place in the UK. Most of these actions are of the opt-in variety, which means that a claimant has to take steps to participate in the action by either appointing someone to act on their behalf in bringing the claim or join proceedings themselves.
Alternatively, it may be an opt-out process brought on the part of a whole group without a mandate from everyone. If the claim proceeds, individuals must actively opt out of the process, although the result will be available to all unless they have taken those steps.
