Global Class Actions

The 2024 legal landscape in Germany marks a shift with the introduction of actions for investor claims related to crypto assets under the MiCA Regulation. This expansion allows for claims concerning misleading or omitted information in crypto whitepapers, broadening the scope of financial market litigation.

Efforts to streamline legal procedures are evident, with measures such as shortened deadlines and an enhanced role for the Higher Regional Court (Oberlandesgericht) in Capital Markets Model Case Proceedings. This court now has greater autonomy in determining the objectives of class action proceedings, potentially leading to more efficient case management.

A notable procedural change is the shift to an opt-in mechanism for suspending related proceedings, replacing the previous automatic suspension. This will enable a large number of parallel individual actions with double evidentiary hearings in all instances, which will massively increase the requirements for the orderly handling of mass proceedings and require robust legal strategies and possibly increased legal resources. In addition, the disclosure obligations will be tightened in line with “pre-trial discovery” in such matters.  

Finally, the relationship between class actions by consumer associations and in Capital Markets Model Case Proceedings has been clarified. These types of actions do not exclude each other when relating to the same subject matter.

Looking ahead, the digital transformation of legal processes will require companies to adapt to electronic documentation and communication. The use of electronic process tools and sharing with clients will be required to handle the complex proceedings. Investing in digital infrastructure and training for document disclosure will be essential for compliance and efficiency. Revisiting data management and confidentiality protocols will be vital to protect sensitive information.

At some point in 2025 or beyond we may see cases with an aggregate of Capital Market Model Case proceedings and consumer class action.

Since financial institutions have been in the focus of consumer class actions in Germany since their first implementation in 2018, we expect that consumer associations will continue to make use of the existing option to bring motions for declaratory judgments on consumer law infringements but will also make use of the now available option to bring motions for redress on behalf of consumers. Various cases were brought against banks regarding terms and conditions concerning interest rates, before the direct motion for redress was available to the plaintiffs.

In 2024, Italy witnessed a significant surge in representative actions targeting the financial sector. This trend can be largely attributed to the growing activism of consumer associations, which have embraced the European-inspired legal framework on representative action (more accessible and less cumbersome compared to the national class action system introduced in Italy in 2019).

Based on available data, 34 class and representative actions have been filed in 2024 (16 more than in 2023). Half of these cases affect the financial sector, and the majority were representative actions launched by consumer associations in areas related to consumer credit and surety guarantees. As to consumer credit, several representative actions were filed in response to financial companies failing to reimburse or reduce "upfront" costs to users in case of early repayment of the loans, seeking both an injunction and compensatory relief. As to surety guarantees, the number of actions increased following the interim measure obtained by a consumer association from the Court of First Instance of Turin (temporarily upholding the alleged abusive nature of certain terms and conditions of surety guarantees model agreements), which triggered similar actions against other banks (especially with business in the Turin area).  

As to class actions filed in the financial sector in 2024, the available data show an interest in:

1.  The fintech sector, where users sued a cryptocurrency exchange platform for damages caused by alleged platform malfunctions.

2.  Digital payment institutions, accused of unfair commercial practices for false advertising, promising fees not outlined in their general terms and conditions.

3.  Security measures, with claims against companies that failed to implement adequate authentication measures to protect credit card transactions and safeguard users.

Most of these cases are still pending, except those reported as “terminated” on the Ministry of Justice‘s website and that have been probably settled. One class action has been dismissed on lack of jurisdiction and is currently at the appeal stage, while no class or representative action has been so far upheld on the merits. 

Early 2025 indicators suggest that the trends of recent years will not continue in the immediate future, with a constant increase of class actions, and especially of representative actions, in the finance industry sector. The activism of consumer associations seems to lead toward targeting financial institutions for unfair contractual terms and misleading commercial practices with specific respect to surety guarantees and costs associated with consumer credit. Although more traditional banking and payment services are currently affected by collective redress campaigns, financial and insurance services are far from safe. Security class actions may be the new frontier, and the involvement of companies’ directors cannot be excluded (as also testified by one pending class action). In addition:

a)  The acceleration we are experiencing in recent years in terms of technological development will certainly also impact the landscape of class actions, with a possible increase in claims for damages for data breaches and platform blackouts (a few class actions already exist in the specific finance sector) and possible cases of so-called AI- or tech-washing (i.e., a communication strategy aimed at the overstatement or misrepresentation of the AI or tech tools governing processes and/or services offered by a certain company). 

b)  The risk of ESG and labor class actions, also in the financial sector, should not be underestimated. Although ESG is still underrated in Italy and labor litigation tends to unfit the homogeneity required by collective redress mechanisms, class and representative actions of this kind have been already brought across other industry sectors, and we cannot exclude that the finance industry may be involved in the future (especially if major disruptive events occur). 

Considering this scenario and the wide scope of application of the new laws on class and representative actions, for companies that may be targeted by such actions, preparation is essential, yet not simple. 

First, companies should put their best efforts into monitoring and ensuring the company's compliance with regulations and standards protecting investors, data privacy, and any area of the company's operations that is structurally more prone to lead to collective litigation.

Second, recent experience shows that there is seriality even in class actions: representative bodies often proceed methodically, identifying a sensitive issue in a certain market area and targeting the companies operating in that market one after another. Maintaining a high level of vigilance and knowledge of the class action landscape, even with the help of external consultants, to be engaged preferably before it is too late, certainly helps to anticipate the emergence of collective litigation.

Third, it is common (and in some cases even required by law) that before initiating a class action, a dialogue between the parties is established (especially in the case of representative actions). A careful assessment of costs and benefits often allows for the prevention or amicable resolution of disputes, avoiding the significant costs of a collective proceeding (not only in terms of passive claims but also of attorney fees, court expenses publication of the judgment - often ordered by courts - in national newspapers or expensive campaigns of individual communication to users/customers).

Fourth, although discovery is not possible in Italy, collective redress mechanisms allow a wider disclosure of documents for which companies should prepare in advance of the litigation. 

2024 saw a number of key developments in the UK class action landscape for financial institutions, which continue to shape this evolving risk area for the industry.

Competition class actions remain a prominent risk for financial institutions, particularly with the Competition Appeal Tribunal (CAT) having the only opt-out regime in the UK. In 2024, one of the most high-profile and longest-running such claims, brought by consumer campaigner Walter Merricks against a major credit card provider on behalf of 44 million UK consumers, reached an approved settlement. This claim was brought on an opt-out basis and originally sought damages totaling over £14 billion. After a number of preliminary rulings by the Court narrowed the scope of the claim, the parties agreed to settle for £200m.   

More generally, the resolution of this case highlighted the relationship between UK claimants and their litigation funders, with Mr. Merricks’ funders are challenging the settlement on the basis it did not represent a just and reasonable outcome. While expressing a view that the sum was ‘disappointing’, the CAT approved the settlement despite the funder’s objections. This illustrates the tension that can exist between claimants and their funders around the control of litigation, which in this case seems to have resulted in a lower payout by the financial institution than the funder would have accepted.

2024 also witnessed the English Court's increasing flexibility in the management of multi-claimant actions. Several new Group Litigation Orders (GLOs) were approved in claims relating to diesel emissions, some of which involve claims against finance companies. However, the novel "Pan-NOx" structure that the Court has instigated, involving the common case management of 13 separate GLOs and a series of focused trials, means that the financing aspects of the claims are unlikely to be considered for some time. No other GLOs relating to financial services were made in 2024.  

On the contrary, the Court rejected an application for a GLO in respect of claims against a number of financial institutions relating to Payment Protection Insurance policies that were sold on a commission basis. The Court was not persuaded that the procedural ‘super-structure’ of a GLO would deliver any cost savings, and was unattracted by the claimants’ argument that consumers with low-value claims would lose access to justice. This reflects a maturing of the English Court’s ability and readiness to case manage ‘omnibus claims', that is, single claim forms naming a large number of claimants, outside the formal GLO framework.  

This ‘omnibus claim’ approach was recently considered and endorsed in the context of eight claims brought by (in aggregate) several thousand borrowers against motor finance lenders. Whilst such claims can be viable, they cannot operate on an ‘opt in’/‘opt out’ basis and contain no mechanism to deal with ‘tag along’ claims where claimants have no obligation to contribute to a funder’s costs.  

Finally, claims by shareholders against issuers of listed securities for misleading, false or delayed statements or omissions under ss.90/90A Financial Services and Markets Act 2000 may be impacted by the 2024 judgment in the action against Glencore, which ruled that a company generally could, contrary to long-standing practice, assert privilege as against its own shareholder. That would likely make the pursuit of such claims more challenging for claimants. While this decision may otherwise have gone on appeal, the issue of shareholder privilege was heard by the Privy Council in another case in March 2025, with judgment now awaited, and in the meantime, uncertainty remains.

We expect many of these trends to continue through 2025.

The litigation funding market, which is a key component of the viability of class actions against financial institutions, particularly by consumers, faces various uncertainties heading into this year. Draft legislation to confirm the enforceability of common third-party funding arrangements fell away before it could be brought into force when the 2024 general election was called. The new government has said it will now await the outcome of a review undertaken by the Civil Justice Council into litigation funding more generally, which is expected to report in summer 2025, so that it can take "a more comprehensive view". It is anticipated that this may lead to more formal regulation of the litigation funding sector, which has to date been largely self-regulating. 

A Supreme Court decision on lender commission arrangements in the motor finance sector is one to watch out for in 2025, after a Court of Appeal decision in late 2024 drove a significant volume of complaints and threatened claims. Firms will want to consider carefully arrangements that may be characterised as commission payments in light of the awaited judgment and emerging complaint patterns. There also remains an ongoing FCA review that may lead to remediation activity — and potentially to further challenge. 

The risk of ESG-related class actions also looms large for financial institutions, particularly with ever-evolving EU and UK disclosure requirements and the FCA's recent Anti-Greenwashing Rule. With sustainability and good corporate behaviour remaining high on the political and legal agenda, added to consumer and investor expectations, the greenwashing risk is real and one that could be ripe for multi-claimant actions against firms.

Outside formal litigation, the UK Financial Ombudsman Service (FOS) has seen significant and increasing volumes of representative-driven complaints against financial services firms. The UK government is conducting a review of how ‘mass redress’ events are dealt with, and FOS has already introduced a revised funding model that imposes fees on represented complainants. This will be closely watched, and claimant firms (and their funders) will be considering whether litigation might become relatively more attractive if there are further changes to how FOS operates. That may give rise to further pursuit of group actions in the consumer finance arena, where low-value individual claims can be uneconomic for representatives.

As the UK class action landscape continues to mature, 2025 is likely to be a year of further change.

There were no significant class action rulings in 2024 for financial institutions in particular, but plenty of action. 

In Cantero v. Bank of America, the Supreme Court unanimously held that the question of whether the National Bank Act (NBA) — the statute under which U.S. national banks are chartered, as opposed to their state and non-chartered counterparts — preempts state law was not affected by the Dodd-Frank Act of 2010, and continues to require a “nuanced, comparative analysis” of how the state law affects the bank’s activities. In declining to broaden the scope of preemption, the Supreme Court effectively maintained the current applicability of state-law claims — often pursued in a putative class action setting — and thus ensured national banks would have to continue to fight those cases.

In a major securities class action involving a financial institution, the Second Circuit reconsidered and reversed its own prior precedent concerning claims involving auditor opinions, holding this year that standardized language in auditor opinions may be material to investors. The decision, while important across sectors, creates additional risk around audit disclosures commonly used for and by financial institutions.

2024 also continued to see a trend of class actions challenging the enforceability of arbitration agreements, largely within the context of employment disputes with employees and claims from retail banking consumers, ranging across products such as mortgage and credit card services. Mandatory arbitration clauses remained a robust defense against class actions, with motions to compel arbitration prevailing at a high rate of success across the federal courts.

With the growing issue of data privacy in an ever-technological world, financial institutions have been targeted in data breach putative class actions stemming from their presence and provision of services online.

Finally, the growing trend of ESG-related and “greenwashing” claims against companies, largely in the class-action space, affected financial institutions, whose profile and disclosures make them a potentially attractive target. 

Amidst this shifting landscape, we can expect to see a continued increase in data privacy class actions, based on the meteoric rise in data-breach suits filed by plaintiffs in 2024. In the absence of a federal statute that would regulate data privacy uniformly across the United States, eight states are poised to enact data privacy laws in 2025, and we expect putative class actions utilizing these laws to be pursued with vigor. 

The Supreme Court is scheduled to hear the issue of class certification for Rule 23(b)(3) damages classes that include class members without an injury. The Court’s ruling in Davis will greatly affect the potential exposure to damages faced by financial institutions, depending on the extent to which the Court allows for certified classes to include uninjured class members.

The issue of expert evidence admissibility at the class certification stage is also anticipated to develop further this year. Currently, some circuits require a Daubert analysis of admissibility before involvement within class certification proceedings, whereas others proceed on a limited, or otherwise flexible, analysis. 

We also expect applications of the Supreme Court’s landmark ruling in Loper Bright Enterprises v. Raimondo, which overruled the longstanding Chevron framework of affording deference to reasonable federal agency interpretations of ambiguous statutory provisions. This is likely to afford defendant financial institutions a broader range of strategies to rebut unfavorable statutory interpretations by regulatory bodies and attempts by plaintiffs to leverage such interpretations.

Finally, in addition to the growth in “greenwashing” claims, we anticipate an increase in “AI washing claims” (that is, claims that a company’s statements regarding its artificial intelligence programs were false or misleading in some way) in 2025, including against financial institutions