It would seem the first of the big competition class actions for 2022 is out the door. Last week, Facebook was accused of unfairly compensating its users for handing over their data: according to a claim filed in the UK’s Competition Appeals Tribunal, Facebook’s market domination means people’s data is unfairly priced. And now, it could be due to owe up to £2.3bn in compensation to 44 million users, if the opt-out class action is successful.
The case appears to be confirmation of the end-of-year speculation in the legal industry that 2022 would be a busy year This comes after the recent Lloyd v Google decision that appeared to slam the door on 19.6 representative actions for personal data.
It was reported in the Financial Times that Sarah Williams, a Partner in the Competition practice at Linklaters, said that 2021 “really opened the door to cases based on creative theories of harm.” Now it is expected that there will be a marked focus from funders and potential claimants on the Competition courts, as a new avenue to bring major, opt-out group claims.
It’s not just the law that is developing – or that could have serious implications for law firms and their clients. In class actions, the public and public opinion plays a critical role.
Portland recently published its annual report on Class Actions. Our polling data revealed that 71% of the UK public would join a class action if they were directly affected by wrongdoing, and 69% would join against their own employer. Polling also revealed that the majority of the public would be comfortable being automatically included in an opt-out claim.
More than a companies’ reputation is at stake when facing these types of claims. Managing the communications when embroiled in a legal dispute, particularly those of the magnitude of a class action, can be commercially critical. It is therefore crucial to appoint communications advisors who properly understand the legal and commercial landscape.
Three top tips from Portland:
- Claimant and defendant firms alike should seek to build a detailed understanding of potential class members to maximise the likelihood of persuading them to join – or not join – a claim.
- Defendant firms should advise what steps can be taken by their clients to demonstrate to customers, employees, shareholders or consumers that they are taking alleged wrongdoing seriously, potentially reducing the risk of follow-on litigation.
- General Counsels should always consider not just the legal exposure to class actions, but the significant reputational and commercial challenges that could potentially follow.