ACL welcomes decision to make expert costs advice a condition of approving collective actions
The ACL has welcomed a declaration by the Competition Appeal Tribunal (CAT) that people bringing collective actions should always instruct costs specialists to assist them with scrutinising their lawyers’ fees.
This should become the “standard approach”, it said, given that class representatives are not usually in a position to do this effectively themselves.
The CAT gave the guidance as it made instructing independent costs specialists a condition of its approval of two collective actions worth almost £4bn against Amazon.
The three-person panel – chaired by Mr Justice Roth – said it was satisfied by the arrangements put in place by Professor Andreas Stephan to instruct independent lawyers at a costs firm to provide him with monthly oversight reports “and where appropriate, identify any queries arising from the invoices, and provide commentary to assist Mr Stephan in determining whether further clarification and/or adjustment should be sought”.
Robert Hammond similarly committed to having a costs professional review future interim invoices and apply “the level of scrutiny that a corporate client would apply when receiving invoices from a solicitor as to the reasonableness of the rates and time taken to which the interim invoices relate”.
Professor Stephan is bringing an opt-out claim valued at £2.7bn that Amazon has abused its dominant position for the supply of e-commerce marketplace services to third-party sellers. Mr Hammond’s £1bn claim alleges that Amazon manipulated how it presents available products through the ‘Buy Box’ (on the right side of the product detail page) in such a way as to suppress competition.
As the claims overlap, the CAT heard their applications for collective proceedings orders – giving the green light for the cases to proceed – together and approved both.
The CAT assessed the proposed class representatives’ funding arrangements as part of this. In Professor Stephan’s case, it noted that the litigation funding agreement provided that he would “review” invoices in respect of his solicitors’ fees and that, at the reasonable request of the funder, would seek to have them assessed. The funder is providing backing of up to £33m.
“We recognise that these provisions provide some protection against unreasonable fees,” it said. “However, we think it is important that [Professor Stephan], independently, should be in a position to subject claims for costs to proper scrutiny. The funder’s interests are not identical to those of the class because, if the action results in recovery for the class, the funder’s expenditure on costs will be reimbursed out of the sum recovered, potentially at the expense of the class.
“It is no disrespect to Professor Stephan to say that for litigation of this scale we do not think he is in a position effectively to review and challenge bills for legal costs without assistance. That is a common situation for class representatives.
“Reflecting this position, in Bulk Mail Claim Ltd v International Distribution Services PLC [2025] CAT 19 at [22], the Tribunal recently observed that measures may need to be put in place to ensure that the [prospective class representative] gets costs specialist advice on legal fees to provide assistance in approving any costs arrangements and fees. As in that case, we indicated that we would wish for Professor Stephan to be assisted by a costs specialist, and we consider that should become the standard approach in collective proceedings.”
The CAT said it was similarly “concerned that there should be effective control of costs” in Mr Hammond’s case, where the litigation budget is £20m.
ACL chair David Bailey-Vella said: “This decision reflects the increasingly pivotal role of costs professionals – and particularly Costs Lawyers, as independent and regulated experts – at every stage of the litigation process.
“Class representatives are understandably heavily reliant on their lawyers in cases as big and complex as these, but with so much money on the line, the tribunal recognised the importance of them having independent advice to ensure that their costs – which ultimately come out of the class’s damages in the event of success – are rigorously policed. Costs Lawyers are the people to do this.”