How Scotland could become the UK's 'class action capital'

2025 marked five years since the introduction of “group proceedings”, known in some jurisdictions as “class actions”, in Scotland.

The Scottish Civil Justice Council (SCJC), the statutory body responsible for drafting and reviewing civil court procedure rules in Scotland, is now considering the introduction of “opt-out” group proceedings.

If introduced, this would mean any person or entity in Scotland harmed by the action or conduct complained of in a court action will automatically form part of the group making the claim, unless they remove themselves from the group.

Supporters of opt-out proceedings say they tip the scales of justice in favour of claimants as the opt-in model often involves campaigns, publicity and outreach to find and register those who wish to be involved (Picture: stock.adobe.com)

The move to introduce a general right to opt-out group proceedings could create a divergence between Scotland and England, where the rights to an opt-out action are limited.

This may make Scotland a more attractive jurisdiction for those wishing to bring claims and could – unless and until England changes its own rules – make Scotland the “class action capital” of the UK.

While change is not likely to take place immediately, it appears to be a question of when, not if, an opt-out procedure will be introduced in Scotland.

The possible introduction of an opt-out procedure has elicited strong views.

Dentons new logo

Supporters of opt out point to increased access to justice, as the opt-in model often involves campaigns, publicity and outreach from those leading the group to find and register those who wish to be involved.

There are various reasons why someone may decide not to opt in, including concerns about cost, a feeling litigation is “not worth it”, a failure to reach everyone who may be eligible and psychological and cultural barriers.

Opt out tends to facilitate legal redress for vulnerable members of society who would not typically be aware of or take the steps to join opt-in proceedings.

An opt-out procedure also allows for actions in situations where each individual may have suffered only a small loss but which collectively amount to large sums.

On the other side of the argument, concerns about opt out include the potential for large payouts to funders and the legal system, with a only small fraction reaching those who have suffered harm.

Those representing business interests in Scotland are also wary. The existence of an opt-out procedure significantly increases litigation risks for businesses, particularly for data breach, product liability, consumer protection and climate-related claims, or those with a large customer base or workforce.

It also brings with it a risk that speculative actions may be brought claiming large amounts of damages even where there is no realistic prospect of recovering such damages, but where the size of the claims and the heavy costs of defending the action, and the potential for reputational damage, may be used as a threat to induce settlement.

Issues businesses will want the SCJC to consider are likely to include the scope of opt out and whether it should always be available, or whether some types of claim are unsuitable for an opt-out procedure.

Another issue to resolve is how opt-out procedures should be conducted and the role of courts in approving any settlement agreement. Distribution of funds also needs to be considered, as does management of litigation funding.

Finding the right balance between achieving redress for consumers, limiting the burden on business and protecting against speculative claims is essential to ensure the interests of justice are served and that Scottish businesses can operate with certainty under a new civil regime.

Fiona MacGregor is counsel in Dentons’ Glasgow office