- within Litigation and Mediation & Arbitration topic(s)
- within Litigation, Mediation & Arbitration, Environment and Energy and Natural Resources topic(s)
The consultation on an opt-out class action procedure for Scotland has arrived.
We have been discussing a potentially seismic change to litigation exposure for businesses operating in Scotland – and today marks a significant step towards this becoming a reality.
The mention of 'class actions' tends to conjure images of a US-style system. Scotland's current group proceedings regime is a more modest version, but a 'Call for Evidence' (consultation) published today by the Scottish Civil Justice Council envisages a procedure that would bring us much closer to that model, and could have serious implications for businesses selling to or operating within Scotland – regardless of whether those businesses have any physical Scottish presence.
At the moment, individuals must actively 'opt in' to be part of a group claim, and claimant firms require to take time advertising and recruiting claims before proceedings can be raised. Litigation funders underwriting the claim might also consider the number of claimants signed up to an action before assessing whether it is economically viable to proceed. The proposed shift to an 'opt-out' regime would flip the process: proceedings could be brought on behalf of large classes of consumers without identifying specific individuals in advance, and claimants would have to opt out if they didn't want to be involved. That could pave the way for vast claims, with enormous numbers of claimants and, in turn, significant sums being sued for – all of which would make it far easier for these claims to get off the ground in Scotland. This would be a game-changer in terms of litigation risk, making Scotland a more attractive forum for large-scale consumer or other group claims. Given the potential for data breach, product liability, consumer protection or climate related claims, there is significant potential exposure for businesses engaging with consumers, with large numbers of employees or manufacturing products that are ultimately sold into Scotland, regardless of sector.
Of course, there exists the UK-wide Competition Appeal Tribunal ("CAT"), which has its own opt-out process for competition law issues, and a number of consumer claims have been litigated there on the basis they have a nexus with a competition law claim. A Call for Evidence on that procedure recently closed, and there will be elements of those consultation responses that will no doubt inform the Scottish process. It is worth noting that (unlike the CAT procedure) the new Scottish procedure is open to covering all areas of law, and could result in simultaneous or overlapping claims in multiple jurisdictions, increasing strategic and legal complexity for UK-wide and global businesses.
Primary legislation is already in place for this, so the consultation process is taking place through the Scottish Civil Justice Council. The Call for Evidence is open for responses until 26 January 2026. The topics at issue are significant and worthy of response – including: (i) the types of claims to which this should apply; (ii) funding; (iii) process and requirements for settlement; and (iv) costs, in addition to a range of procedural matters, and the introduction of the procedure as a concept entirely.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
