CAT refuses permission to appeal its second certification judgment in opt-out collective proceedings and deals with other consequential matters
On 27 September 2021, the Competition Appeal Tribunal (CAT) delivered its second certification judgment in opt-out collective proceedings and the first in a standalone opt-out claim, in Le Patourel v BT Group Plc and British Telecommunications Plc  CAT 30. In a separate short ruling handed down on 25 October 2021 the CAT dealt with important consequential matters arising out of its certification judgment, including permission to appeal and costs).
Mr Le Patourel (a telecoms consultant who previously worked at Ofcom) brought a standalone claim (not based on a regulatory decision) on behalf of approximately 2.3 million BT customers against BT, alleging that BT abused its dominant position in two telecomms markets by imposing unfair prices. BT then brought a cross-application seeking summary judgment/strike-out of the claim. In its judgment dated 27 September, the CAT authorised Mr Le Patourel to act as the class representative and dismissed BT’s cross application, finding that the claim has a real prospect of success.
A hearing then took place on 19 October to deal with consequential matters, including costs and permission to appeal and the CAT handed down a short ruling on 25 October. A CPO order was also made by the CAT setting out directions for the next steps in the proceedings.
The key issues dealt with by the CAT are BT’s applications for permission to appeal and for a stay of the next steps of the CPO, and costs.
Permission to appeal
BT applied for permission to appeal the CAT’s certification judgment, which was unanimously refused by the CAT. BT’s application was based on 3 grounds:
- that there was an error of law on the basis of the CAT misdirecting itself as to rule 79(3) of the CAT Rules, the rule about determining whether collective proceedings should be opt-in or opt-out. The CAT considered that there was no error in law, rather a disagreement with its decision that the opt-out basis was more appropriate than the opt-in.
- that there was an error in law in postulating that a method of distributing damages could be by payment to each class member by means of an account credit (if necessary, through a claims administrator instructed by Mr Le Patourel). The CAT noted that this was in the context of dealing with a jurisdiction point raised by BT (para 117 of the certification judgment) in which no decision was made and that it was not necessary to decide the issue at this stage.
- that there was an error of law in the CAT’s reference to merits. The CAT noted that it had gone into detail on merits because of the cross-applications for strike out/summary judgment. Having found that the claim had a real prospect of success, the CAT was entitled to say that the claim would have had to be very weak for the merits to have any further impact on the opt-in/out decision.
BT will now need to apply for permission to appeal directly to the Court of Appeal. The CAT considered that these matters should be progressed to trial as swiftly as possible. Bearing in mind the demographic, in particular the elderly portion of the class, the CAT requested that any decision on permission to appeal be expedited by the Court of Appeal.
Application for a stay
BT also applied for a stay of next steps of the CPO until: (i) the Court of Appeal hearing of its application for permission to appeal; and (ii) if that application is successful, until the appeal itself is decided. The CAT rejected point (ii) on the basis that this would be a matter for the Court of Appeal if that Court were to grant permission to appeal. In respect of point (i), the CAT considered that the relevant question was whether there was a risk of injustice if no stay was granted.
In considering the future directions, the CAT made a distinction between the service of the Defence (and subsequently the Reply) and the notification to the class. In respect of the service of the Defence, the CAT considered that there was no injustice to BT in serving its Defence and therefore set a service date of 3 December. In respect of the notification to the class, the CAT acknowledged that the notification could be issued now, and it did not need to make any reference to an appeal. However, it also recognised that there could be a level of complexity in relation to the class, if class members are asked to consider the question of opt-out by April 2022, with the potential for the position to change in future if the Court of Appeal were to grant BT permission. In light of this, and bearing in mind the demographic of the class, the CAT preferred to make this process as clean as possible and, as such, directed a stay of the notice until the Court of Appeal has decided on BT’s permission application.
Mr Le Patourel sought his costs in relation to: (i) BT’s unsuccessful strike-out/summary judgment application; and (ii) BT’s unsuccessful opposition to the CPO application incurred from 30 April 2021 (the date on which BT served its Response to the CPO application) onwards. The parties agreed that costs relating to the amendments to the Claim Form would be costs in the case. BT agreed to pay Mr Le Patourel’s costs relating to (i), and there was no dispute that Mr Le Patourel’s costs up until 30 April should be costs in the case. The remaining area of dispute was in relation to the costs of the CPO application incurred from 30 April onwards.
The CAT considered that some costs would have been incurred post 30 April in any event, and it made a 20% reduction to the costs that Mr Le Patourel is entitled to at this stage to account for that. As such, it ordered BT to pay 80% of Mr Le Patourel’s costs incurred from 30 April onwards, with the balance of the 20% being costs in the case. In its assessment, the CAT took as a comparator BT’s own costs figure (around £300K) and added £200K to account for BT’s costs for preparing its Response (prior to 30 April) which brought the total figure for BT’s costs to £500K. The CAT noted that this figure would not be an appropriate starting point for comparison, as there were additional expenses that BT did not incur (but Mr Le Patourel did) such as further expert evidence and legal fees (in relation to the expert evidence). The CAT assessed the starting point for comparison to be £642K. It then awarded Mr Le Patourel an interim payment on account of costs at 70% of that figure, which was £450K for his costs from 30 April 2021 onwards.
The CAT’s consequentials ruling demonstrates the CAT’s willingness to progress collective claims speedily, perhaps conscious of the long wait it has taken for the UK opt-out regime to get off the ground as a result of Merricks. In particular, the CAT’s robust approach to BT’s applications for permission to appeal the certification judgment and for a stay of the proceedings with the CAT pushing back on a stay of all procedural next steps (save for notification) pending the Court of Appeal’s decision on BT’s permission to appeal application, is a further indication of the quickening pace of the opt-out collective proceedings regime. It is also a signal to defendants that it will not be an easy route to stalling those claims in the CAT. Finally, the CAT’s ruling gives a helpful insight into how the CAT deals with costs in CPO applications.
The CAT’s consequentials ruling.
For an analysis of the CAT’s certification judgment, please see our team’s take.