The Government says its latest proposals will deliver a “light-touch” reform of class action litigation.

Businesses should read the small print.

The consultation follows recommendations from the Civil Justice Council to regulate litigation funding rather than fundamentally reform it. Instead of asking whether the UK’s rapidly expanding class action market has gone too far, ministers are focusing on making the system work more efficiently—through greater transparency, clearer rules around settlement offers and proportionate oversight of litigation funders.

That may sound modest.

In practice, it risks making large-scale litigation easier to finance, easier to manage and ultimately more attractive to claimant firms and commercial funders.

The wrong question

The debate should not begin with how to streamline class actions.

It should begin with whether the current system is delivering justice efficiently.

Over the past decade, collective claims have grown dramatically, particularly in the Competition Appeal Tribunal. Businesses across sectors have found themselves defending claims worth hundreds of millions—or even billions—of pounds, often years before liability is established.

Even where claims fail, the costs of disclosure, expert evidence, management time and reputational damage can be immense.

That economic burden rarely features in discussions about “access to justice”.

Litigation funding is an industry

Third-party litigation funding has transformed class actions from exceptional cases into a sophisticated commercial market.

Funders invest in claims expecting substantial financial returns. Claimant firms build portfolios of cases. Specialist claimant vehicles actively search for potential mass claims.

None of this is inherently unlawful.

But it does change the incentives.

When litigation becomes an investment product, there is an obvious commercial incentive to generate more litigation.

That is why any reform should begin by asking how speculative claims can be discouraged—not merely how funders should be regulated.

Regulation is not the same as restraint

The Government argues that a clearer regulatory framework will improve confidence in litigation funding while preserving access to justice.

Perhaps.

But history suggests that regulation often legitimises markets as much as it constrains them.

A “light-touch” regime may reassure investors, increase funding capacity and ultimately encourage more collective claims rather than fewer.

If that happens, businesses could face greater legal uncertainty despite promises of proportionality.

Growth comes at a cost

Every major class action carries consequences beyond the courtroom.

Investment decisions are delayed.

Innovation budgets shrink.

Management attention shifts from growth to legal defence.

Consumers may ultimately pay through higher prices, reduced choice or slower innovation.

These costs rarely appear in settlement announcements, but they are real nonetheless.

Access to justice must not become access to litigation

Nobody disputes that consumers deserve effective remedies when businesses break the law.

The question is whether expanding the machinery of collective litigation is always the best answer.

The UK already has powerful regulators, alternative dispute resolution mechanisms and sector-specific redress schemes. Class actions should remain a remedy of last resort—not the default commercial strategy for well-funded claimant firms.

The Government’s consultation presents its proposals as technical improvements.

Businesses should recognise them for what they could become — another step towards a more active, better-funded and increasingly commercial class action market.

Before making litigation easier, policymakers should ask a more fundamental question.

How do we resolve more disputes without creating more litigation?