The UK may be edging closer to a major expansion of collective litigation.

The Law Commission is considering whether England and Wales should introduce a broader consumer class action regime beyond competition law — potentially allowing mass claims across sectors including insurance, banking, telecoms and retail.

Supporters describe the move as improving “access to justice”. Critics see something else — the creation of a much larger litigation industry.

From Competition Claims to Mass Consumer Litigation

The UK already allows opt-out collective actions in competition cases through the Competition Appeal Tribunal. Since their introduction, claims against major corporates and tech firms have increased sharply.

The concern for insurers and businesses is that expanding this framework into wider consumer disputes could normalise large-scale litigation over claims handling, fees, alleged unfair practices, product disclosures and regulatory compliance.

Low-value complaints that would never individually reach court can become commercially attractive once aggregated into claims involving millions of consumers.

The Funding Factor

Modern class actions are heavily driven by litigation funding.

Third-party funders can turn mass claims into scalable financial assets, increasing pressure on businesses to settle long before legal issues are fully tested.

The Law Commission has already acknowledged concerns around speculative litigation and the risk of encouraging a wider “litigation culture”.

This is important because once collective action mechanisms exist, they rarely stay limited for long.

Why Insurers Are Watching Closely

Insurers could face direct exposure through collective claims involving policyholders or claims handling disputes, while also funding defence and settlement costs for insured corporate clients.

At a time of rising regulatory scrutiny and increasing consumer duty obligations, a broader class action regime could materially increase litigation and reserving pressures across the market.

More Than a Technical Reform

This is not simply a procedural update.

A broader consumer class action regime would represent a structural shift in UK litigation, potentially moving England and Wales closer to a US-style model of permanent, funder-backed mass claims.

For claimant firms and litigation funders, the commercial opportunity is obvious.

For corporates and insurers, the consequences may prove far more lasting.