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Labour looks at making class actions easier for consumers

Labour says proposals being considered as it announces policy review headed by former chief of National Consumer Council

Labour is examining proposals that would enable consumers to band together and seek redress from a firm they believed had cheated them through a class action, Chuka Umunna, the shadow business secretary, said on Friday.

Umunna said he was seriously considering the proposal as he announced a consumer policy review which will be headed by Ed Mayo, the former chief executive of the National Consumer Council.

Labour believes creating a class action framework would make it easier for those affected by issues such as the PIP breast implant scandal to fight for compensation. Class action lawsuits are common in the US and Australia, but in the UK the legal framework is different and opportunities for collective redress are more limited.

Ed Miliband recently said he wanted Labour to be “champions of the consumer”, and the consumer policy review will look at ways of “putting consumers in the driving seat and ensuring markets work fairly for businesses and consumers alike”.

Mayo, who will hold hearings around the country, will consider in particular high-profile cases involving complaints of consumers being ripped off, including payment protection insurance (PPI) mis-selling, hidden fees for pensions and credit cards, and energy price hikes.

“We need to change the rules of the game to stop business and consumers getting a raw deal,” Umunna said. “Labour’s consumer investigation will look into ways that we can empower consumers, back responsible business, underpin fair markets and end the rip-off culture which too often has faced consumers.”

Mayo said: “The best businesses take the high road and live up to their promises for consumers, but in tough times, many more are doing the opposite – with poor service, new charges and lock-in contracts designed to cut people’s choice.

“The investigation will hold evidence hearings involving key stakeholders across the business and consumer landscape with the aim of looking at the best ways of getting rid of this consumer con culture and to reward the companies who put their customers first.”

Last month Miliband used a newspaper article to set out his determination to attack what he described as Britain’s “rip-off consumer culture”. He says defending consumer interests is part of his strategy of championing “the squeezed middle”.

In particular he identified six areas where consumers were being unfairly treated: fees for savers that are not transparent; parking charges at stations, which in some areas have risen sharply; airline charges not disclosed up front; excessive bank charges; charges for consumer helplines; and energy charges. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds