The Competition Appeal Tribunal’s decision ordering consumer rights lawyer Elisabetta Sciallis to pay £1.5 million in legal costs after proposed collective proceedings against leading musical instrument manufacturers collapsed is one of the most significant class action rulings of the year.

While the underlying allegations concerned resale price maintenance, the judgment ultimately turned on something far more fundamental – litigation funding.

When Sciallis’ funder withdrew and no replacement funding was secured, the Tribunal found that neither it nor the proposed defendants were informed promptly. That failure proved costly, with the CAT concluding the conduct fell well outside the standards expected in complex collective litigation.

Funding Is the Foundation of Every Collective Claim

Collective proceedings are expensive. They demand years of legal work, expert evidence and substantial financial backing before a case ever reaches trial.

Without secure funding, a proposed class action is little more than an aspiration.

The CAT’s ruling reinforces that funding is not a procedural technicality but an essential prerequisite for bringing and maintaining collective proceedings.

A Welcome Reminder That Defendants Matter Too

Public debate around class actions often focuses exclusively on consumer rights. Less attention is given to the businesses forced to defend large-scale claims.

In this case, manufacturers including Fender, Yamaha, Casio, Roland and Korg incurred substantial legal costs responding to proceedings that ultimately lacked the financial support needed to continue. The Tribunal recognised that defendants are entitled to know where a claim stands and should not bear unnecessary costs caused by procedural failures.

The Tribunal Sends a Clear Message

The judgment is likely to resonate well beyond this case.

As collective actions continue to grow in the UK, litigation funders, claimant firms and class representatives should expect closer scrutiny of funding arrangements and greater accountability where those arrangements fail.

Transparency is not optional. Neither is proper case management.

Why Businesses Should Take Note

For companies facing the increasing threat of class actions, this decision is reassuring.

It demonstrates that the CAT is prepared to hold claimant representatives to the same high standards expected of defendants. Large collective claims must be properly funded, responsibly managed and transparently conducted. Where they are not, there are consequences.

That balance is essential. Consumers deserve access to justice, but businesses also deserve protection from claims that are not ready to proceed.

The Bottom Line

The UK’s collective actions regime was designed to resolve genuine competition disputes—not to encourage underfunded or poorly managed litigation.

This £1.5 million costs order is a powerful reminder that collective proceedings carry significant responsibilities. Adequate funding, transparency and professional conduct are fundamental to the integrity of the regime, not administrative formalities.

For litigation funders, claimant firms and proposed class representatives alike, the Tribunal’s message is unequivocal – collective proceedings should only be pursued where secure funding is in place, procedural obligations are met, and the claim can be advanced responsibly.