Press & Policy

*This blog is based on a speech delivered by SCC Chief Executive Charandeep Singh BEM at an event held by the law firm CMS on 11th June on class actions in Scotland.

Businesses across Scotland are operating in a challenging environment. Our latest business survey shows members continue to report weak confidence, rising costs and ongoing uncertainty.

Many are making difficult decisions about investment, recruitment and expansion as they navigate a period of sustained economic pressure.

When businesses assess where to invest, they do not look at one factor in isolation. They consider infrastructure, skills availability, taxation, regulation, operating costs and the broader risk landscape. Legal frameworks form part of that picture too.

It is in this context that Scotland’s debate over collective legal actions has become increasingly significant for businesses.

From SCC’s perspective, the central question is whether any reform strengthens Scotland’s competitiveness or creates additional uncertainty for businesses already facing difficult economic conditions.

The Scottish Civil Justice Council is considering implementing an opt-out system for group proceedings, a move that would make collective claims simpler to pursue and could significantly increase litigation risk for businesses operating in Scotland.

Supporters of opt-out proceedings argue that they can improve access to justice by making it easier for individuals to pursue claims that might otherwise be too costly or complex to bring. They also contend that stronger collective redress mechanisms can help promote accountability and public confidence in markets.

Businesses are concerned that opt-out class actions could have significant implications for their exposure to litigation. These lawsuits are likely to result in much bigger claimant groups and consequently higher-value claims by automatically including those who have claims unless they explicitly opt out.

Recent analysis by the Fraser of Allander Institute suggests the economic impact associated with mass litigation in Scotland could be between £119 million and £347 million annually. While estimates inevitably vary, the findings highlight why changes to the litigation environment are attracting attention from businesses as well as lawyers.

The key test is whether the reform supports confidence, competitiveness, and growth, or adds another layer of uncertainty at a time when many businesses are already operating with very little margin for error.

For businesses, confidence will depend on whether appropriate safeguards are built into the system. For consumers, success will depend on whether the focus remains on securing fair outcomes rather than litigation for its own sake. And for policymakers, the challenge is ensuring reforms support both accountability and economic growth.

Finding the right balance between achieving redress for consumers, limiting the burden on business and protecting against speculative claims is essential to ensure businesses can operate with certainty.

It’s also important for competitiveness. A different system in Scotland compared to England and Wales has the potential to impact the attractiveness of Scotland as a prospect for investment.

If it is going to be introduced, businesses need confidence that weak claims can be filtered out at an early stage. Consumers need to know that the focus is on redress, rather than litigation for its own sake.

We believe that every major decision affecting the economy should be assessed not only on its stated objectives, but also its impact on competitiveness.

That means considering whether policy strengthens confidence, encourages investment and helps make Scotland a more attractive place to do business.

This is the challenge that Scotland must meet.