Costs Update #29

On 17 July 2026, the Department for Business and Trade launched its consultation, Swifter and Simpler Competition Redress, Regulatory Appeals and Competition Enforcement, marking just over a decade since the introduction of the collective proceedings regime before the Competition Appeal Tribunal (CAT). Responses to the consultation are due by 25 September 2026.

The consultation covers a broad range of issues relating to competition redress, regulatory appeals and enforcement. For those involved in collective proceedings, however, several proposals are likely to be of particular interest. Of particular note are the measures directed at the scrutiny of legal costs and funding arrangements, the role of independent costs specialists, and the mechanisms available to the CAT to oversee litigation expenditure incurred on behalf of a class.

Although many of the proposals build upon practices that have already emerged in recent collective proceedings, the consultation presents an opportunity to consider whether those practices should be formalised within the regime. If adopted, a number of the proposals could have significant implications for Proposed Class Representatives, solicitors, litigation funders and Costs Lawyers alike.

Scrutiny by Costs Lawyers to Assist the PCR

At the CPO stage, several cases before the CAT have called for the Proposed Class Representative (PCR) to be assisted by costs specialists, usually Costs Lawyers, to provide independent advice on legal fees and funding arrangements, and to assist in reviewing and approving the proposed costs.

This approach was adopted in Bulk Mail Claim Ltd v International Distribution Services plc [2025] CAT 19 at [22] and was reflected in the joint judgment in Robert Hammond v Amazon.com, Inc. & Others and Professor Andreas Stephan v Amazon.com Inc. & Others  [2025] CAT 42; 24/07/2025, where the Tribunal stated:

"However, we think it is important that the PCR, independently, should be in a position to subject claims for costs to proper scrutiny." [45]

Whilst this was the position in Hammond & Stephan and Bulk Mail, the instruction of independent costs specialists has not yet become standard practice across all collective proceedings. Tellingly, however, in Hammond & Stephan the CAT observed that such an approach should become standard in collective proceedings.

Reflecting that trend, the consultation seeks views on whether a more formalised approach to independent costs scrutiny should be adopted, and it seems likely, depending on the responses to the Consultation that this scrutiny may be enshrined in any update to the CAT Practice Directions.  

Litigation funding

The consultation on litigation funding also contains several noteworthy observations. Most significantly, there is considerable discussion regarding the role of litigation funding and the clarifications required either to secure certification or to resist it. This issue has been particularly important in cases where claims failed to obtain certification due to concerns about the adequacy or structure of funding arrangements.

Another challenge identified in the consultation is the anecdotal evidence arising from the Call for Evidence (CfE), which suggests that claims now need an estimated value of £500 million or more in order to attract third-party funding. Against this background, the consultation also considers the continuing uncertainty caused by PACCAR. Notably, it asks stakeholders whether permitting Damages-Based Agreements (the issue at the centre of PACCAR) would increase the availability of, and competition in, claim financing, and whether sufficient safeguards exist to prevent speculative litigation.

The existing legal framework already provides significant protection against speculative litigation. From a costs perspective alone, and as noted throughout the consultation, proceedings before the CAT frequently involve legal costs running into tens of millions of pounds. The CAT has an inherent jurisdiction to award costs at any stage of the proceedings, applying the traditional English rule that costs generally follow the event and the unsuccessful party pays. Given the substantial sums involved, it is unlikely that a litigation funder would risk investing in a highly speculative claim. Equally, it is improbable that a Class Representative, who may in some circumstances be exposed to personal liability, would choose to pursue a speculative claim against well-resourced defendants.

Budgeting

Budgeting is another topic addressed in the consultation, particularly the role that litigation budgets play in claims before the CAT. The key proposed change is to require both parties to file litigation budgets in advance of hearings following certification. Currently, it is generally only the Class Representative who is required to file a litigation budget.

This has led to concerns that there is not a level playing field, as one party has clear visibility of the Class Representative’s resources available to pursue the claim. In turn, this creates the possibility that a Class Representative could be “spent out” of the case through sustained litigation. To address this concern, the consultation recommends the introduction of clear costs sanctions.

Conclusion

From a costs perspective, the proposals discussed above appear sensible, particularly the potential resolution of the long-running uncertainty surrounding DBAs. A link to the consultation is provided below. The closing date for responses is 15 September 2026.

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