Opt-out claims now dominate European class actions, CMS report reveals

As class action claims across Europe hit new record high

•  New peak: 133 class action claims were filed across Europe in 2023, the highest number to date. 2023 saw “opt-out” class actions outnumber “opt-in” class actions for the first time in Europe.
• UK at risk forefront: The UK remains the highest-risk jurisdiction for class actions in Europe, with the total claimed value of class actions in the UK – opt-in and opt-out – in the region of EUR 145bn and competition class actions involving over 540 million class members by the end of 2023.
• Portugal surpasses Netherlands: Portugal’s class action claims, amounting to EUR 45.85bn, surpassed those in the Netherlands (EUR 35.33bn) in 2023. In Portugal, actions seeking monetary payment increased six-fold compared to 2022.

According to global law firm CMS's 2024 European Class Action Report, 2023 marked another year of sustained and significant growth in European class actions. The 133 claims filed represent a 10% increase from 2022 and a staggering 93% increase since 2019.

Kenny Henderson, Partner at CMS, says: “The surge in class action claims across Europe reflects an increasingly complex legal landscape. It is extraordinary that competition class actions encompassing more than 540 million class members have been brought in the UK, with most of the growth in just the last three years. This translates to more than 8.1 actions for each person in the UK. The numbers are so other-worldly because these people are brought into these opt-out U.S. class actions without being asked and usually without their knowledge. Equally astronomical are the sums involved. In the period 2018-2023, EUR 145bn of damages were sought – a level of damages that continues to increase year on year.”

The CMS report also reveals the deep spread of claims across Europe. While England and Wales remained the highest-risk European jurisdiction, accounting for 29% of all claims, Portugal (23%) and the Netherlands (18%) closely followed. Germany (8%), Poland (6%) and Italy (4%) were also more active in 2023. This is a stark contrast to 2020 when 63% of claims were filed in England and Wales. The implementation of the Representative Action Directive (RAD) in 2023, aimed at facilitating collective redress for mass consumer claims, has been a pivotal development, taking effect in Portugal, Netherlands and most EU states.

Dr. Zsolt Okányi, CMS’s Global Head Dispute Resolution, comments: “While the UK continues to lead in terms of risk, the rapid rise in claims in Portugal and the Netherlands signals a broader trend. The increased availability of litigation funding and advancements in technology have facilitated the pursuit of mass claims and made it easier for claimants to organise and file actions. The implementation of RAD is also proving significant, providing a mechanism for collective redress and empowering consumers and public bodies across Europe to take action against more corporations.”

 Additional insights from the CMS Report:

• Opt-out claims growing: Opt-out claims represented 54% of all claims in Europe  in 2023, while the total claimed value of opt-out claims in the UK, the Netherlands and Portugal has increased eight-fold between 2020 and 2023. Interestingly, in England and Wales, opt-out claims, while still strong, slowed in 2023, influenced largely by the UK Supreme Court decision in the “PACCAR” case.
• Diverse trends in types of claims: While product liability, consumer law and personal injury took the lion’s share (32%) of claims across Europe, COVID-19 related litigation, particularly business interruption and insurance claims in England,  is on the rise. With the first of these claims through the gates, they are likely to become a permanent feature of the European group litigation landscape for years to come.
• Claims by defendant industry sector: 2023 saw the largest number of claims yet against tech companies and other consumer-facing sectors, as well as (mostly Dutch) claims against governments and governmental bodies. While the number of claims in the financial products and professional services sectors has fallen compared to 2022, it was still the second-highest ever recorded. This demonstrates a consistent growth trend in group litigation across all significant defendant sectors – no one can be said to be safe.
• Emerging class action risks: With a 400% increase in the number of non-Governmental Organisations (NGOs) operating at an international scale, corporations are encountering NGOs on an increasingly frequent basis. This, as well as changes set out in the new EU Product Liability Directive (PLD), are emerging as new risks that could materially increase litigation and class action claims. The strong availability of litigation funding across key hotspots in Europe is also having a profound impact.

“As our report shows, no sector is immune from activity,” says Kenny Henderson. “As these actions become more international, companies across all sectors must be prepared for heightened risk. This dynamic environment requires proactive legal strategies and robust risk management to navigate the increasing complexities that group litigation brings.”