OFT report calls for more private enforcement

The Office of Fair Trading (OFT) has urged the Government to re-think legislation regarding class actions in the UK, calling for a greater degree of private enforcement in a report published today (26 November).

In the report - which was unveiled after a six-month consultation with businesses, consumer groups and law firms - the OFT recommended "strengthening the private actions regime".

Proposed changes include allowing representative bodies to bring actions on behalf of businesses and consumers regardless of whether or not a competition authority has previously taken action, as well as modifying restrictions that limit the funding of actions.

Consumer group Which? is one of the few designated bodies currently able to bring such an action, although recent developments could open up the possibility of private sector bodies assuming responsibility for some cases.

OFT chairman Philip Collins commented: "This will have a profound effect on consumers, as individuals will be able to recover losses. It will give businesses a real incentive to comply with the law."

However, Collins said that the while the proposals would give businesses an incentive to comply with competition legislation, the OFT remained keen not to encourage a US-style litigation culture.

Collins said: "I do not think we will end up with an overly litigious culture as firms will not be able to bring cases on a contingency fee basis and the collective mechanism will be subject to strong judicial control."