New Study Reveals 120% Increase in European Class Action Filings

21st Jun 2021

The number of class actions filed in Europe increased by over 120% between 2018 and 2020, reports British law firm CMS in the first edition of their European Class Action Report.

The report shows that “no sector is immune from class actions.”  The greatest number of claims were filed against the financial products and professional services sector; however, other sectors are also seeing a dramatic increase in claims.

Claims against the technology sector grew by 1400% between 2017 and 2020. The claims included data protection class actions (11 times the number of claims in 2020 compared to 2016) and also consumer and competition class actions.

The consumer products and life sciences sector experienced a 275% increase in claims from 2018 to 2020, including product liability, data protection and competition class actions.

Several factors are contributing to this troubling increase in claims, including the increasing availability of U.S.-style opt-out mechanisms, the expansion of claimants’ law firms, including U.S. and other foreign firms opening offices in Europe, and the use of third party litigation funding.

“Claimant law firms and funders both see class actions as attractive opportunities. Funders provide capital not only to bring claims per se, but they also facilitate claims that push the boundaries to further develop class action procedures and allow subsequent claims to be brought,” reports CMS.

This rise in class actions predates the EU’s Directive on Representative Actions, which the 27 Member States are currently in the process of transposing into their national laws. The Directive establishes the EU’s first ever system of cross-border class actions. Unless national governments include safeguards against abuse and opportunistic claims, it is likely these troubling trends will accelerate.