Guest post by Chris Haan
Chris Haan is a solicitor at the firm Leigh Day specialising in group actions related to defective products and services and breaches of consumer and competition law. Last month I was speaking at a conference where Chris was talking about the first ever class action currently underway. Brilliant I thought and must be shared! So I asked him to write a guest post and am delighted to bring it to you here! More power to consumers!
The UK’s first application to bring a class action will be heard on 12-13 December 2016 before the Competition Appeal Tribunal. My client, Dot Gibson, the General Secretary of the National Pensioners Convention (NPC), launched the case in May 2016 against Pride Mobility Products Limited, the largest supplier of mobility scooters in the UK. The class action procedure was brought in by the Consumer Rights Act 2015 in October 2015.
Ms Gibson is seeking compensation for around 30,000 people who were allegedly overcharged for their Pride brand scooter between February 2010 and February 2012 because of Pride’s breaches of competition law that the Office of Fair Trading found in a 2014 decision. If the claim succeeds, class members could be entitled to compensation of between around £50 – £250 each depending on the type of Pride scooter they bought.
What is a class action?
A class action is a legal procedure that was introduced to the UK on 1 October 2015 by the Consumer Rights Act 2015. It’s a system that has been around for years in other countries, such as Australia and the US.
What’s special about a class action is that it enables one person or organisation to bring a court claim on behalf of a large group of people affected by a company’s wrongdoing.
Normally, to bring a court claim each person who wants to claim has to engage a lawyer and issue a court claim in their own name, along with any others who have signed up. The cost and effort involved in doing that is often just not worth it unless a claim is worth a lot of money. What that often means in practice is that affected people end up getting no compensation at all.
A class action system makes it much easier for groups of consumers to bring claims for compensation, especially for small amounts. Only one appropriate person or organisation has to engage a lawyer and bring the claim on behalf of affected people. Everyone else – the “class members” – get to just sit back and enjoy the proceeds if the case is won. Class members don’t need to bring their own case or pay anything, win or lose.
In the UK, class actions may only be brought about breaches of competition law and with the permission of the Competition Appeal Tribunal. Permission is required in order to ensure that a proposed class action is an appropriate way of handling the claims and that the representative claimant will fairly and adequately represent the interests of class members.
Background to the scooters class action
The proposed scooter class action would follow on from a 2014 decision of the Office of Fair Trading that Pride had breached competition law by banning retailers from advertising prices online below Pride’s recommended retail price (RRP) between 2010 and 2012. Pride monitored retailers to try to ensure they were complying with the ban and, according to the OFT, called those who didn’t comply “internet rogues”.
Ms Gibson claims that the ban made it harder for potentially vulnerable consumers to shop around for the best price and led to them paying too much for their scooter. Further, it is claimed that the ban reduced competition between retailers and caused the prices of Pride scooters to be higher than they would otherwise have been.
Pride disputes that its conduct had any impact on the prices paid by consumers. If the class action proceeds, then that issue will be decided by the Tribunal.
Who is covered by the claim?
The claim applies to all of the estimated 30,000 people who bought a new Pride scooter, other than in the course of business, in the UK between 1 February 2010 and 29 February 2012. The claim includes scooters bought online and from bricks and mortar shops.
What happens next?
On 15 July 2016, the Competition Appeal Tribunal set directions and a hearing date of 12-13 December 2016 for determining whether to make a collective proceedings order allowing the class action to proceed.
If Ms Gibson is successful in her application for permission, she will represent all class members in the Tribunal proceedings, except for anyone who takes steps to opt-out or anyone living outside the UK (unless they opt in). The case will then proceed towards trial in a similar way to any other court case.
If Ms Gibson goes on to win whether by a settlement or judgement, then a pot of money will be made available for class members to claim their entitlement from via a simple claims process.
Class members don’t have to do anything for the moment, but they should sign up for updates (see below for details).
Class actions like Ms Gibson’s should finally make it practical for consumers to get redress for higher prices caused by breaches of competition law.
The class action procedure currently only applies to claims based on breaches of competition law, but in my view it should be extended to apply to other areas of law. At the moment if, for example, a company misrepresents a product they are selling, then each affected consumer needs to bring legal proceedings. That is often impractical.
Time and again, I see people with strong cases but there is no practical way to take it to court because of the difficulty of putting together a big enough group of affected people. With a class action system, that problem is avoided, so businesses who break the law can be held to account and affected consumers properly compensated.
How can you find out more information?
The National Pensioners Convention has set up a website for anyone wishing to learn more about the case, including potential class members: www.scooterclassaction.co.uk. You can sign up for updates about the case via that website. Alternatively, you can contact Leigh Day by email: firstname.lastname@example.org or telephone: 020 3780 0478.