Collective litigation boom may deter investment and harm growth sectors, warns ECIPE study
The surge in mass litigation could cost the UK economy up to £18 billion by undermining innovation and deterring vital investment, a new economic study has warned.
Published today, The Impact of Increased Mass Litigation in the UK was carried out by Brussels-based free-market thinktank, the European Centre for International Political Economy (ECIPE), and funded by industry lobby group Fair Civil Justice.
The report highlights the rapid rise of collective litigation across Britain, with 47 collective actions launched last year alone—compared to just six in 2014. The UK now hosts more collective actions than any other country in Europe. Most of these cases are pursued under collective proceedings orders in the Competition Appeal Tribunal, often backed by third-party litigation funders.
The study warns that this litigation boom could inflict serious economic damage. Many of the companies targeted operate in industries identified by the government as critical to Britain’s growth, including life sciences, advanced manufacturing, and digital services. According to the report, the looming threat of collective litigation is likely to deter investment in these strategic sectors.
Embed from Getty ImagesBeyond scaring off investors, businesses also face significant direct financial losses. These include the sheer costs of litigation, private enforcement, and a reduction in company valuations. The report’s £18 billion estimate—though lacking a defined timescale—is based on the assumption that UK costs will eventually reach 30% of the level seen in the United States.
The authors stress they are not calling for a ban on collective actions but urge policymakers to weigh the benefits of group litigation against the broader economic consequences.
In a foreword to the report, Baroness Bowles of Berkhamsted, a Liberal Democrat peer and former MEP Sharon Bowles, writes: “Legal frameworks designed to support justice and accountability are now being repurposed to create a parallel economy where litigation becomes a commercial enterprise. We must ensure our legal system is a support, not a drag, on the UK’s economic ambition.”
The report’s release comes just days after the Civil Justice Council (CJC) published its own review of litigation funding. While the CJC recommended only soft-touch regulation, Fair Civil Justice argues that the current situation demands stronger intervention. The lobby group, supported by the British Chambers of Commerce, the UK Finance & Leasing Association, and a broad coalition of British businesses and consumer groups, intends to use the report to press for urgent reforms.
Fair Civil Justice is calling for a rebalancing of the legal landscape. Its campaign focuses on promoting more accessible dispute resolution, introducing sensible safeguards, and demanding greater transparency in cases financed by third-party funders.
Seema Kennedy OBE, chair of Fair Civil Justice and a former MP, warned that the issue has now grown far beyond the legal sphere. “This is no longer just a legal issue; it’s a matter of economic resilience,” she said. “If policymakers fail to act, the UK risks becoming a hostile environment for innovation, long-term investment, and fair access to justice. We urgently need to recalibrate our system.”
Mass litigation has been growing in prominence, particularly as law firms and funders seize opportunities presented by consumer and competition law breaches. While supporters argue that collective actions provide a vital route to justice for claimants with limited individual means, critics increasingly warn of an emerging industry driven by commercial litigation funders profiting from large-scale legal actions.
As the debate intensifies, today’s report adds fresh momentum to calls for policymakers to strike a careful balance between access to justice and protecting Britain’s economic future.
