Digital Markets, Competition and Consumers Bill

Lord Wolfson of Tredegar Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Etherton (CB)]

My Lords, I thank the Minister for his comments on Amendment 70 in my name. As he indicated, it would enable consumers to bring collective proceedings where there has been breach of requirements specified in Clause 101. The amendment would also require the Secretary of State to conduct a review to ascertain whether there are any other types of claim appropriate for collective proceedings.

Under current procedural rules of the court in England and Wales, there are very limited circumstances in which more than one person can bring proceedings, even though they may have suffered harm or loss from the same defective product or conduct. A single set of proceedings with multiple claimants could not be brought, for example, where the harm or loss was suffered on different occasions and in different circumstances. Representative proceedings—or class actions, as they are usually called—would overcome these limitations.

Chapter 7 of Part 1 of the Bill, dealing with enforcement and appeals, makes provision for individual claims in the Competition Appeal Tribunal or to a court for breaches of requirements, such as conduct requirements and pro-competition orders following pro-competition interventions. There is no provision in the Bill or elsewhere enabling consumers and businesses to make collective redress where multiple parties have been harmed by the same breach. In many cases, individual consumers and small businesses will be unable to finance proceedings. Furthermore, the knowledge of the likelihood of such a difficulty will be a disincentive to those who are subject to conduct requirements and pro-competition interventions to comply with their obligations.

Provision for collective proceedings, or class actions, is made in the Competition Act 1998, as amended by the Consumer Rights Act 2015. However, that provision applies only to breaches of competition law. The Bill provides an excellent opportunity to extend the availability of such proceedings to cases where numerous consumers have suffered from the same defective goods or conduct. The Competition Appeal Tribunal is now well used to representative proceedings in competition cases and is well aware of how best to handle them. This is an important opportunity for the Government to increase accessibility to justice to those who would otherwise not have the financial ability to bring proceedings, especially against large and well-funded entities. The Government should grasp it.

[Lord Wolfson of Tredegar (Con)]

My Lords, it is a pleasure to support the noble and learned Lord, Lord Etherton, in this amendment, which he has proposed extremely clearly; I can therefore be relatively brief. However, I probably have the most difficult feat of advocacy ahead of me. Normally in these circumstances one is trying to persuade the Minister to depart from the written brief in front of him, but now I have to persuade him to depart from the written brief which he has already read out, so I feel as though we know the answer to the question I am about to pose. None the less, I will proceed. I refer to my interests in the register as a practising barrister, including, as I will mention in a moment, practising in the Competition Appeal Tribunal, popularly known as the CAT.

It is a fundamental principle of the rule of law that there ought to be an effective means for legal rights to be vindicated. Having a legal right without the ability to vindicate it is not of much use. There are areas of law where a breach of legal duty may affect many consumers, but it is likely to affect each of them minimally. Although such affected consumers can in theory bring a claim for damages, it is rarely worth their while because of the small amount of each individual claim. The irrecoverable legal costs—I again declare my interest—will swamp any damages recovered, even if the claim is successful. There is also the risk of an adverse costs order if the claim fails. The real-world effect is that these claims are brought only by large claimants who have suffered large losses. That means that legal rights are not in practice vindicated. That is, in effect, a gap in our justice system.

In order to make access to justice possible for consumers in these cases, and to create a means of effectively enforcing competition law, a class action regime was introduced into the Competition Act 1998, in Section 47B. That section does not create any new rights; it creates a new process for the more effective enforcement of existing rights. It does this by enabling individual claimants to pool their claims and have them brought by a class representative. The class representative does the running in terms of preparing, funding, and bringing the action. The individual class members tend to have very little to do, other than to receive their damages when they are awarded. Importantly, there is no exposure to adverse costs orders.

This regime has been very successful. There is a high degree of expertise, both procedural and economic, in bringing such claims, and for that reason, the Competition Appeal Tribunal is the only forum in which such claims can be brought. I am instructed in such cases in the CAT, both for potential claimants, through the class representative, and also for defendants. While there are a few rough points which need to be smoothed out, as in any new jurisdiction, there is no doubt that the jurisdiction is bedding down extremely well. There are specialist judges sitting in the CAT, and there is now a range of specialist practitioners, in London and elsewhere, who appear in it.

Clause 101 creates a new data right, which is unlikely to see much use, I suggest, unless it is collectivised—in other words, brought subject to the same regime so that right can be vindicated in the same way. The main thrust of the amendment to which I have added my name is that the class action regime in Section 47B be expanded to include such claims, which would benefit from better access to justice, and, really importantly, would avoid leaving claimants with a right but with no effective remedy.

[Baroness Stowell of Beeston (Con)]

I wanted to intervene briefly. I do not have an amendment in the group, I have not signed my name to any, but I wanted to piggyback on the introduction of the issue of private litigation to ask a question that has been put to me by one of the big tech firms. I thought it was a reasonable question, even though it was not one I felt moved to table an amendment on. I suggest to my noble friend the Minister that he might find it easier to reply by means of a letter to me that he can put in the Library of the House, rather than taking up time.

The question is why, in this Bill, if somebody wants to bring a private litigation, there is no provision for the CMA to be required to give consent before an action can be taken by way of private litigation. In contrast, in the Communications Act 2003, Ofcom’s consent is required before private litigation is taken on a matter that refers to conditions imposed on the various companies that come under its auspices. The relevant part of the Communications Act is Section 104, where claimants must obtain permission from Ofcom to bring private enforcement claims alleging a breach of the conditions that have been set by Ofcom: they cannot simply file a claim whenever they wish. The Act says:

“The consent of OFCOM is required for the bringing of proceedings by virtue of subsection (1)(a)”.


The purpose of this is to give Ofcom a sort of gatekeeping role and prevent overlapping, or private litigation happening while something is being carried out by the regulator.

I thought it was a worthwhile question and I am happy to ask it. The other issue that has been raised with me is that in these private litigations, the contentious countervailing exemption that we discussed in an earlier group is not available to the big tech firms in the same way that it is available to them in the procedure that is set out in the Bill.

I have given the Bill team notice of these questions. I know that they have some very good answers, and I suggest to my noble friend that he asks his officials to convert that into a letter that he can put into the public domain.