Beyond the DMCC: Is the UK bracing for a consumer class action wave?

The Law Commission announced on 20 April 2026 that it will conduct a review into the merits of introducing a new consumer class actions regime, prompted by a request from the UK government.

The review will identify the risks and benefits associated with the introduction of such a regime and has asked for recommendations on its design. Stakeholders are invited to respond to an Initial Scoping Questionnaire to contribute their views on these considerations, which is live from now until 30 October 2026.

The UK’s current ‘opt-out’ collective damages regime

The UK already has a limited regime that allows ‘opt-out’ claims in the Competition Appeal Tribunal (CAT), although this is only available for damages claims arising out breaches of competition law.

This involves a representative claimant bringing a claim on behalf of a class of claimants who do not need to take any positive steps to join the claim. It differs to an ‘opt-in’ collective damages regime, which requires each individual claimant to actively join the proceedings.

The significance of the opt-out system shouldn’t be underestimated. When claims are brought on behalf of all consumers who have suffered loss as result of the competition law breach, the quantum of damages claimed can be huge.

For example, the first successful opt-out UK case brought in the CAT arising out of a breach of competition law – Dr Rachel Kent v Apple – is thought to have resulted in aggregated damages in the region of £1.5bn.

Consumer class action revisited

The current UK opt-out collective damages regime does not extend to consumers who have suffered loss as a result of consumer protection laws.

The Law Commission will now consider whether this is an appropriate limit on the class action system to avoid the UK adopting a US-style litigation culture, or whether the current regime unduly limits consumers’ private access to redress.

This is not the first time this issue has come up. While the Digital Markets, Competition and Consumers (DMCC) Bill was progressing through Parliament, the (then) backbencher Sir Robert Buckland proposed amendments to permit opt-out collective proceedings for consumer law breaches.

The amendment also received support in the House of Lords, where the resource limitations of individual consumers were flagged as prohibitive to accessing private redress, but the Buckland amendment was ultimately rejected by Parliament and not adopted in the final DMCC Act. Nevertheless, the issue hasn’t gone away. The question of consumer accessibility to redress is at the centre of the Law Commission’s review, being a core objective in its Terms of Reference.

Why now? Public policy context and existing landscape of consumer law enforcement

The Law Commission’s announcement followed an open letter from the Secretary of State for Business and Trade (DBT), the Rt Hon Peter Kyle MP on 2 April 2026, in which he highlighted the UK government’s intention to “examine and recalibrate the UK’s consumer protection system”. This forms part of DBT’s wider Consumer Action Plan.

The timing of the announcement is controversial, given that the broader collection actions landscape in the UK is also under review, with DBT having launched a Call for Evidence  on it in 2025, with results awaited.

The existing opt-out regime in the CAT has been widely criticised for allowing a wave of speculative claims to emerge that stretch the boundaries of competition law, many of which are resourced by third party litigation funders. So far, only one opt-out claim brought in the CAT on behalf of a class of consumers has been successful, although some cases have been settled out of court.  

It also comes in the midst of an intense consumer enforcement drive by the CMA using its new direct enforcement powers under the DMCC Act. One-year on from the DMCC Act coming into force, the CMA has launched an unprecedented number of new enforcement cases, with 14 launched so far and more expected. On 6 April 2026 the CMA announced a £4.2million fine issued against AA Driving School and BSM Driving School for breaching price transparency rules following a settlement, just 5 months after the case was announced.  Since April 2026 the CMA has also issued 157 advisory and warning letters and issued 46 information notices.

Adding a further layer of litigation risk on top of an aggressive regulator would up the ante further for consumer-facing brands.

Key design questions

The Law Commission’s review has called for input on the design of a prospective consumer class action regime. This will inevitably give rise to strong views on both sides.

One key issue that is likely to feature heavily in the call for views is the debate over third-party litigation funding, which as noted above has already proven controversial in relation to the existing competition opt-out regime.

The commercial reality of bringing large scale claims on behalf of consumers is that significant funding is often required beyond that which individual consumers can afford, creating a gap into which commercial investors have entered, who naturally expect financial returns. This has led to criticism that the lion’s share of any damages payout goes to litigation funders, and not the consumers on behalf of whom the claim is brought.

The review’s Terms of Reference anticipate considering any reforms that arise from the Civil Justice Council’s recent review on the accessibility, effectiveness and regulation of litigation funding, which published its final report in June 2025.

Another key question is the intersection between public and private enforcement of consumer law. The CMA’s aggressive approach to consumer enforcement using its new DMCC Act powers begs the question of whether now is really the right time to be introducing a new private class action regime. It would also increase the likelihood of conflicts between public and private enforcement.  

As part of this, the Law Commission will also need to consider the risk of 'double recovery', whereby consumer redress could be achieved via public CMA enforcement as well as via private action in the courts.  For example, in the AA / BSM case, learner drivers who paid the £3 dripped fees were refunded £760,000 by the AA as part of the terms of its settlement with the CMA. The potential for businesses to be hit by a concurrent, or follow-on, class action civil damages claims would inevitably complicate any settlement discussions with the CMA, assuming that the CMA continues to seek consumer redress as part of its enforcement process.

Finally, the Law Commission will need to grapple with the question of which specific ‘consumer law’ breaches would form part of any new class action regime. UK consumer protection laws are wide and capture broad spectrum of different practices. Even under the current ‘opt-in’ private damages regime for consumer law, consumer private rights of redress have been limited to the most serious breaches by traders, such as aggressive commercial practices and misleading actions. The government has previously rejected calls to extend private rights of redress to more complex breaches of consumer law, such as misleading omissions or breaches of the ‘professional diligence’ requirement. DBT last consulted on this question (amongst other things) back in 2023 when the DMCC Bill was going through Parliament. In its consultation response in January 2024 DBT confirmed it would not legislate at the time to extend private rights of redress beyond the current list of more serious ‘prohibited practices’. However, it did leave the door open to extend private rights of redress via its delegated powers under the DMCC Act in the future, which brings us back to the current live Law Commission review.

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Responses to the Initial Scoping Questionnaire are invited by 30 October 2026. If adopted, these proposals could significantly alter the current UK consumer litigation landscape. It’s vital that affected consumer-facing businesses make their voice heard.

TLT's competition and consumer law team advises businesses holistically on regulatory and litigation risk. Please get in touch to understand what the Law Commission’s review may mean for your business, and how to meaningful engage with the consultation process.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2026. Specific advice should be sought for specific cases. For more information see our terms & conditions.