BT Group plc v Le Patourel

The Court of Appeal dismissed BT's challenge to the Competition Appeal Tribunal's Collective Proceedings Order certifying a class claim under the Competition Act 1998 and ordering that it proceed on an opt-out basis. The court held that the legislation and Rules afford the Tribunal a broad, open-textured discretion when choosing between opt-in and opt-out certification (Rule 79(3) and s.47B CA 1998) and that there is no statutory presumption favouring opt-in proceedings. The Tribunal was entitled to take into account the practical likelihood that large numbers of identifiable customers would not convert into opt-in litigants, the consequences for third-party funding and access to justice, and demographic and convertibility considerations. The court also held that the Tribunal has sufficient case-management powers to permit distribution of an aggregate award by an account credit (subject to appropriate orders), and that the merits beyond the established summary threshold did not require a different result.

Background and procedural posture. The Competition Appeal Tribunal had certified a claim seeking aggregate damages under section 18 CA 1998 for alleged abuse of dominance by BT in the standalone landline market, relying in part on provisional findings made by Ofcom. The CAT ordered the collective proceedings to proceed on an opt-out basis and that, if successful, remedy would be by way of aggregate damages. BT appealed to the Court of Appeal under s.49(1)(a) CA 1998 on points of law arising from the Tribunal's certification and opt-in/opt-out decision.

Nature of the claim and relief sought. The proposed class comprised circa 2.3 million voice-only and split-purchase customers seeking aggregated damages of about £589m. The representative sought a Collective Proceedings Order (CPO), certification of common issues, aggregate damages and an opt-out regime.

Issues before the Court. The Court identified three central legal issues: (i) the correct legal approach and criteria for choosing between opt-in and opt-out collective proceedings (Rule 79(3)); (ii) whether the CAT may direct distribution of aggregate damages by means such as an account credit; and (iii) the role the merits (strength of the claim) should play in the opt-in/opt-out choice.

Court’s reasoning on each issue.

• Opt-in versus opt-out discretion. The court held that the statute and Rules are neutral and confer a wide discretion on the CAT to take into account all matters it thinks fit. The President's Guide does not create a legal presumption favouring opt-in; the Guide is provisional and intended to be developed by experience. The CAT was entitled to consider convertibility (how readily identifiable/contactable persons will be turned into litigants), funding consequences and the likely take-up of opt-in proceedings in reaching a pragmatic decision.
• Account credit and distribution powers. The court held that, once the Tribunal has awarded aggregate damages and directed payment to the representative or an authorised third party (s.47C CA 1998 and Rule 93), the Tribunal’s broad case-management powers permit practical methods of distribution. In appropriate circumstances the Tribunal may order distribution by account credit (or by instructing a claims administrator or by directing the defendant) to maximise consumer redress; this is consistent with the statutory purpose and the Tribunal’s powers to manage distribution.
• Role of merits. The court affirmed that the CAT must apply the established summary threshold (real prospect of success, not fanciful). Beyond that threshold the Tribunal need not require a higher test of merits to order opt-out; paragraph [124] of the CAT judgment was treated as inapposite and not determinative. The CAT acted within its margin of judgment in the way it treated the merits for the opt-in/opt-out decision.

Result and wider observations. The Court of Appeal dismissed the appeal. The court emphasised the Tribunal’s broad multifactorial balancing task, its case-management remit and the central statutory objective of facilitating access to justice for mass consumer claims. The judgment also suggested that some aspects of the Guide may be revisited as the Tribunal gains experience.

Appeal dismissed. The Court of Appeal held that (i) the Competition Appeal Tribunal has a broad, open-textured discretion under Rule 79(3) and section 47B CA 1998 to choose between opt-in and opt-out procedures and there is no statutory presumption in favour of opt-in; (ii) the Tribunal may, in appropriate circumstances and as an exercise of its case‑management powers, order distribution of aggregate damages by means such as an account credit (or by instructing a claims administrator or directing the defendant) to secure effective compensation; and (iii) once the summary threshold for a real prospect of success is met, the merits do not automatically require a prefatory higher test before ordering opt-out. The CAT’s factual and evaluative conclusions on convertibility, funding and proportionality fell within its margin of judgment and were lawful.

Appeal from the Competition Appeal Tribunal (Judgment and Collective Proceedings Order dated 27 September 2021) (see [2021] CAT 30). The present determination is the Court of Appeal's judgment in BT Group Plc & Anor. v Justin le Patourel [2022] EWCA Civ 593.