EJF, together with the Scottish Chamber of Commerce, BritishAmerican Business; and the US Chamber Institute of Legal Reform called for an in-depth consultation on new class action legislation

In May 2021, a group of business and legal bodies representing Scotland, Europe and the US have warned about the possible introduction of US-style ‘opt-out’ class action lawsuits in Scottish courts. In particular, the Scottish Chambers of Commerce; the European Justice Forum; the BritishAmerican Business; and the US Chamber Institute of Legal Reform jointly wrote to the Scottish Civil Justice Council (SCJC) and Scottish Government in order to bring to their attention the concerns on the potential economic impact of adopting ‘opt-out’ legislation and have called for further consultation on the matter.

EJF, together with the signatories have called for a cautious approach to avoid the introduction of new rules that would create a ‘litigation culture’ in Scotland which could damage the economy while enriching litigation funders and law firms. That is why EJF and the other parties have requested the SCJC to run a full public consultation prior to introducing any ‘opt-out’ mechanism to make sure that the new legislation is properly balanced. The issue was also taken up by the media (see here).

The joint letter underlines the risks of introducing ‘opt-out’ class action lawsuits and explains the potential threat that the opt-out mechanism could pose to businesses and other organisations which can arise from the likes of data breach, product liability, and employee claims. To avoid this, a wider public consultation seems to be reasonable and a sensible course of action. According to SCJC feedback, at this time there are no proposals to take forward work to consider an ‘opt-out’ regime for group proceedings.