BIS cites the perceived inadequacy of the current regime to produce a substantial body of competition claims in the High Court or the Competition Appeal Tribunal (CAT). Between 2005 and 2008, BIS states that only 41 competition cases came to judgment in the UK, and only 43 out-of-court settlements took place in competition claims between 2000 and 2005. BIS's impact assessment estimates that the total benefit to the UK economy of introducing an effective private actions regime could be £66.1 million, plus an average of £26.2 million of redress each year to businesses and consumers.

It is against this background that BIS has proposed its four headline reforms.

BIS proposes that the CAT should be the major venue for competition actions in the UK.

The CAT is seen as a successful, specialist tribunal with active case management and cross-disciplinary expertise. As well as hearing cases involving competition or economic regulatory issues, it also has the power to hear "follow-on" actions for damages where a competition law infringement has been found by a UK or EU authority.

BIS considers that the CAT has unfulfilled potential. It proposes that the CAT should hear standalone competition claims (where no infringement finding has been made), including by taking referrals from the High Court of claims, or the competition aspects of a claim. The CAT would also receive broader powers to grant injunctions, as well as damages, recognising that, in many instances, the most important thing for a business affected by anti-competitive behaviour is simply for that behaviour to stop.

BIS proposes to introduce a fast-track CAT procedure for small and medium-sized enterprises cases to be dealt with more quickly and cheaply. This could include a cap on recoverable costs up to a maximum of £25,000, and potentially also a proportionate cap on recoverable damages.

Another procedural innovation would be a rebuttable presumption in cartel cases that the cartel activity had increased prices by 20%; this is intended to remove some of the burden from the claimants in proving their loss.

While the government says it does not favour new forms of general collective action, BIS proposes a new form of domestic collective action specifically for competition claims.

BIS considers that current collective action mechanisms are inadequate at delivering fair redress for consumers and businesses. In particular, since current forms require individual claimants to opt in to the litigation, they have proved ineffective at bringing together large bodies of claimants to pursue claims where individual losses are limited. The classic example of this was in relation to the Office of Fair Trading's (OFT) finding in 2008 of price fixing among supermarkets and dairy producers where individual losses were so small it was said that a million claimants would need to opt in to make the litigation viable (www.practicallaw.com/6-380-5154).

Against this background, BIS proposes a new opt-out collective action that permits a representative claimant to bring a claim for damages in the CAT on behalf of all persons and entities within the same class (other than those who explicitly opt out), subject to certification by the CAT. The class could include businesses as well as consumers, and claims could be brought on a standalone or a follow-on basis.

The representative claimant could include an individual or company representing others in the same position, or a representative body such as a trade association or consumer group. Law firms and litigation funders are not to be permitted to act as a representative claimant. Nor are law firms to be permitted to act on a contingency fee basis on such claims, since this feature is seen as driving some of the concerns about the US class action system. In contrast to the US, BIS proposes that the "loser pays" costs rule should be maintained for collective actions to provide a check on unmeritorious claims.

Consistent with the government's wider position to promote alternative dispute resolution (ADR), BIS proposes that litigants should be "strongly encouraged" to consider mediation or other ADR, and that the CAT should introduce a pre-action protocol to promote good practice among prospective litigants. The use of Calderbank offers in the CAT would also be revisited, perhaps to bring them into line with Part 36 offers in the High Court.

More dramatically, the OFT (and, from 2014, its successor body, the Competition and Markets Authority) would have the power to order an undertaking guilty of an infringement to implement a compensation scheme for victims. This could include sanctioning a voluntary proposal by the undertaking. Individuals or entities that drew money from this scheme would thereby settle their claims against the undertaking, although it is by no means clear that this would deter potential collective actions from being brought in addition.

BIS is keen that any increase in private claims should not undermine public enforcement: in particular, the incentives to enforcement created by the whistleblower and leniency regimes. BIS proposes that documents created for the purposes of seeking leniency from a competition authority should not be discloseable in court or CAT proceedings, and that undertakings granted full immunity as whistleblowers should also be protected from joint and several liability for harm caused by the cartel, and instead only be liable for harm they cause directly.

It is unclear how BIS envisages that legislation passed in the UK would offer any protection from contrary approaches taken in other countries' courts.